AT&T READIES CALIF. PLAY

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AT&T is taking its juggernaut to California, where it's preparing to offer local service and may tap Ameritech Corp. for some assistance along the way.

"In this age of convergence, we're going to start seeing some very curious alliances," said Jeffrey Kagan, president of Atlanta-based Kagan Telecommunications Associates. "Companies who are partners on one day can be competitors on the very next day-like Ameritech and AT&T."

California's local service telephone market will open to competition Jan. 1. The state's Public Utilities Commission is considering applications from 66 companies, including AT&T, Pacific Bell, MCI Metro Access Transmission, Viacom Communications and other cable operators, to offer facilities-based service, resale service or both.

Although Ameritech has not filed to offer local service in California, it would be possible for the Baby Bell to piggyback on AT&T's license.

"A benefit of an Ameritech/AT&T alliance would be to share the risk of offering a new product in a new market," said Mr. Kagan.

Both Ameritech and AT&T spokesmen refused comment on any future alliance.

"AT&T hasn't made its local play yet. But when they do, any partner will have to bring a lot to the table with them," said Ken Zita, partner at New York-based consultancy Network Dynamics. "But in this day of alliances and ventures, anything could happen."

Interestingly, Foote, Cone & Belding, San Francisco, appears poised to re-enter the advertising melee that will result from AT&T's entry into the California market. FCB, which had the Pacific Bell account for 23 years, resigned it in 1994 after the agency's New York office picked up some AT&T business.

Since then, FCB has done work on AT&T's Internet access service product, although it has not been awarded that business. At the same time, the San Francisco office has hired a new executive creative director with front line experience in the telecom wars. Exec VP Paul Wolfe's previous experience was on MCI at Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, where he developed the "Gramercy Press" campaign.

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