WASHINGTON (Reuters) - AT&T Corp. (T), the biggest U.S. long-distance carrier, said on Wednesday it would stop competing for local and long-distance residential customers in seven states after a court threw out regulations giving it cheap access to the dominant local telephone networks.
The company said it would no longer offer the services, as a bundle or individually, to new customers in Ohio, Missouri, Washington, Tennessee, Louisiana, Arkansas and New Hampshire, where almost 38 million Americans live.
"The ability to bundle local and long-distance services has become an essential aspect of competition in the long-distance market," said AT&T spokeswoman Claudia Jones. "AT&T and other competitors will not be able to effectively compete in the residential long-distance market without a viable local product."
She declined to detail how many customers the company had in those states but said the decision will not affect existing customers.
Nationwide, AT&T has about 4.3 million customers who subscribe to a bundled package of local and long-distance services and about 30 million long-distance customers.
A federal appeals court earlier this year eliminated rules that required the four dominant U.S. local telephone carriers, known as the Baby Bells, to lease access to competitors at government-set rates.
The Bells, Verizon Communications (VZ), SBC Communications Inc. (SBC), BellSouth Corp. (BLS) and Qwest Communications International Inc._(Q), had argued that the prices for access were below their costs.
The competitors, like AT&T and MCI Inc. (MCIA), have countered that they need those prices to compete. Since the Bells own most lines into U.S. homes, the rivals typically lease access to serve customers.
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