By trying to play Gulliver, giant AT&T appears not to swift

You'd think AT&T Corp. would be feeling good. After all, it's streamlining itself,
the blizzard of '96 is history, and it's not too soon to look for good things to happen
this spring.

But the folks at AT&T are in a protest snit. They want the General Accounting
Office to stop the nonsense of the Defense Information Systems Agency's plan to award
about a dozen contracts for the continental U.S portion of the next-generation Defense
Information Systems Network.

AT&T would prefer that the government award the whole DISN-Conus network, as it's
called, to one company--not break it into pieces and spread around the procurement
dollars. By AT&T's reckoning, an integrated approach would save DISA at least $100

Those bucks are nothing to sneer at, but AT&T has sung this same song before the
Interagency Management Council. The council functions as a board of directors for the
General Services Administration's telecommunications procurements.

For the same reasons AT&T doesn't like DISN, it also dislikes GSA's post-FTS 2000
program, which also calls for awarding several contracts, instead of two, for the existing
governmentwide long-distance network.

I'm not saying that either DISN or post-FTS 2000 represents the best procurement
strategy. But what AT&T is suggesting makes no sense.

The telecommunications giant may no longer be what was before its first divestiture in
1984, but it's still Gulliver to Sprint Corp., MCI Communications Corp. and the other
Lilliputians. AT&T, you may recall, upped its stake to 76 percent in the recent price
shootout for the current FTS 2000 program--not on the basis of quality, but because it
greatly underbid Sprint on price.

That's how AT&T operates. It prefers to seize a single mammoth procurement, where
its size is put to advantage, rather than compete for nibbles. Usually AT&T wins those
mammoth situations. It doesn't like sharing FTS 2000 with Sprint any more than it wants to
share DISN.

DISN will succeed the Defense Commercial Telecommunications Network (DCTN), which now
is worth about $1 billion a year to AT&T. DCTN prices are assumed to be higher than
FTS 2000 prices, and you didn't hear AT&T making a fuss when DISA sole-source extended
by 15 months the 10-year DCTN contract that would have expired the end of this month.

With delays now expected in the DISN procurement, chances are good that DCTN will need
yet another sole-source extension come mid-1997.

On the other hand, AT&T is scared stiff that GSA, which seems on track for putting
the post-FTS 2000 contracts in place by mid-1997, might start moving traffic to that new
and probably more economical network before the current program expires at the end of

AT&T's arguments about DISN are unconvincing. Going with a single contractor might
make some sense, but it also would lock DISN into that contractor's technology timetable.

Recall that WilTel Inc. was the first provider with commercial frame relay service, but
because it wasn't part of the FTS 2000 program, the government couldn't buy WilTel's
service. Likewise, Sprint and not AT&T was the first to come out with commercial ATM
service. Why would DISN want to restrict its future access to such new offerings?

AT&T's protest to GAO said a single-vendor approach minimizes downtime. As I
recall, it was an AT&T equipment problem that shut down New York City's airports in
1991, disrupting 1,300 flights. These things happen.

AT&T's protest also raised a valid security bugaboo. But since DISA is buying the
network, let's let DISA do its own worrying about security.

I'd like to see even more vendors participate in DISN and post-FTS 2000 than either
DISA or GSA plans. After all, there are several hundred long-distance companies, and
surely more than a few are capable of providing services.

It's time to open the door to competition, not seal it.

Sam Masud is GCN's senior editor for communications.

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