Lawyers in Mr. Armstrong's ear

Suppose you made a New Year's resolution to get in shape and you kept it for the first month - working out and eating better - until you caught a cold on February 1.

Would you get back on the treadmill after you recover? Or would you give up hope and let yourself go for the rest of the year?

That's the decision facing AT&T Chairman and CEO Mike Armstrong following a recent court ruling that seems to undermine the Telecommunications Act of 1996.

A federal district court judge in Wichita Falls, Texas, ruled that the regional Bell operating companies don't have to prove afterall that they've met a strict local competitive check-list before entering the long-distance business.

"Well!" said the lawyers at AT&T. "This means comprehensive telecom competition is impossible! We're going to appeal this baby, and the industry's going to be gridlocked for months or years!"

Are you listening to your lawyers, Mr. Armstrong? Since they say the telecom act's all fouled up now, should you give up your evident desire to slim down the company and finally build or buy local broadband facilities? Or should you turn a deaf ear to your legal eagles and get right back on your shape-up program?

AT&T lawyers always say they're upset by legal setbacks, but they never really seem to be. Often, they seem relieved to be able to point to another excuse not to attack the local market and to be juiced up for yet another courtroom battle. The company's legal vice president, Mark Rosenblum, frequently likes to talk about what legal milestones to look for "over the next few months," as if that's all the industry cares about.

Last week, Rosenblum calmly told reporters and analysts that an appeals court ruling on the Wichita Falls case could take four to seven months, and a Supreme Court appeal could carry over until 1999.

But while AT&T lawyers waltz through "the next few months" thinking that the industry breathlessly awaits the next move by a telecom comisar, the real, demand-driven world of WANs could race right by them.

"Over the next few months," competitive local exchange carriers probably will once again double the number of buildings wired for alternative networks.

"Over the next few months," more municipalities and electric utilities will go into the telecom business for themselves.

And "over the next few months," the new national networks from Williams, IXC and Qwest will continue their buildouts and service introductions.

All of this will take place whether the Wichita Falls ruling is upheld, overturned, stayed, delayed or read backwards by Jerry Seinfeld on his last show.

In the midst of the legal chaos, Armstrong last week said AT&T still is slimming down, looking at acquisitions and prepping a new overall architecture for circuit - and packet-switched traffic. Is it possible Mr. Armstrong secretly believes that the current telecom legal fog makes it more important for AT&T to accelerate its broadband and local-market efforts before time runs out for bandwidth-starved users? That really would be new thinking in Basking Ridge.