Ma Bell to drop federal fees

Agencies that want telecommunications services from AT&T Government Solutions through its FTS 2001 contract won't have to pay activation fees through the end of 2004.

AT&T said it would waive the fees for services covered by the General Services Administration's FTS 2001 contract. The move shows how competitive the market for federal communications services has become.

"It's an effort to get agencies to consider moving traffic to us," AT&T spokesman Jim McGann said. "Secondarily, it dispels the notion that transition fees are a costly barrier to moving traffic from one carrier to another."

AT&T's fee waiver applies only to FTS 2001 services. Although the company was not one of the original winners of the telecom vehicle, AT&T has added services to it through a "crossover" provision that was built into the contract.

McGann said he could not say how much agencies would save. "The dollar savings for customers varies greatly depending on what we're providing," he said. "If it's a large, complicated network, these fees could amount to thousands in savings for the agency, and a good lure to get them to transition to us."

Traditional telecom carriers are feeling squeezed by competition, said Scott Wharton, vice president of marketing for BroadSoft Inc., a Gaithersburg, Md., company that sells Internet telephony products. AT&T brushes up against rivals Verizon Federal, MCI and Sprint at every turn.

Meanwhile, providers of Internet phone systems such as Avaya Inc., Nortel Networks Ltd. and Cisco Systems Inc. are nudging customers away from older telecommunications technology.

"They see it as an opportunity to kick the carriers in the teeth," Wharton said.