AT&T joins FTS 2001 vendors

The Defense Information Systems Agency has added AT&T to its list of potential telecommunications services providers under FTS 2001, according to a letter from DISA's director, Lt. Gen. Harry Raduege, to the General Services Administration.

AT&T Government Solutions joins Sprint and WorldCom Inc. as a provider of long-distance voice and data services to defense agencies. Sprint won the original FTS 2001 contract in 1998, with WorldCom following in 1999. The two were initially the only long-distance vendors approved under that contract.

"A similar letter went out to civilian agencies a few months ago. This completes the picture," said Jim McGann, a spokesman for AT&T. "Now we can sell into defense as well. Obviously, we will take full advantage of it."

AT&T was able to join the other vendors because it had won several Metropolitan Area Acquisition (MAA) contracts under FTS 2001. The contracts, for local telecommunications services, allow winning vendors to "cross over" and bid on other FTS 2001 services.

The initial contract awards guaranteed Sprint and WorldCom revenues of $750 million each, a guarantee that newcomers don't get, said information technology and telecom consultant Warren Suss. However, GSA intended to keep the field competitive from the beginning, he added.

"The government was clear about their crossover strategy from Day One," Suss said. "All of the vendors understood that the government's plan was to follow the initial awards with additional competition."

AT&T, which was left out of the initial FTS 2001 contract, struck back by bidding aggressively for MAAs, he said.

However, the company's presence doesn't necessarily mean that Sprint or WorldCom will lose much business, especially existing business, he added.

"There are enormous first-mover advantages," Suss said. "Most agencies are very reluctant to make changes to their carriers, especially on the data side, because of the risks of interruptions of service.

"Even though the door has been opened now to AT&T, the incumbents have a significant advantage."

WorldCom is not worried about the added competition, said spokeswoman Natasha Haubold. "We're seeing a lot of our government customers looking to get solutions from a variety of providers. That's of value to WorldCom as well," she said. "They're looking for additional diversity and redundancy."

Sprint officials declined to comment.