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Undiscovered Value in AT&T

"Is this the beginning of the end?" (News: Analysis & Commentary, July 23), and the ensuing commentary on AT&T by Peter Elstrom, "How the turnaround CEO failed to deliver," were breathlessly gloomy and naive. Hey guys, all that happened is that another company woke up to the value we're creating in part of our business.

There's plenty of undiscovered value in the rest of AT&T, too. BusinessWeek asserts that, without broadband, AT&T would be "right back where it was a decade ago." In the past three years, under Mike Armstrong, we have invested $46 billion in our core communications businesses. We have transformed our network, with more high-capacity fiber to more places, carrying more data at higher speeds, than any other carrier. The purchase of Teleport Communications gave us local business lines in 80 cities; the purchase of the IBM Global Network extended our IP network to 850 cities in 59 countries; the purchase of Northpoint's digital subscriber loop (DSL) assets gives us a presence in over 1,900 central offices from which we can offer new data and voices services.

Far from "too small to survive on its own," our "telephone business" had revenue of nearly $47 billion and cash flow of more than $10 billion over the last 12 months. While it's true that long-distance voice revenue is in decline across the industry, on the business side, about half of our revenue will come from nonvoice services this year. On the consumer side, we have industry-leading operating margins--more than 30%--that give us the flexibility to invest in new growth areas like DSL.

BusinessWeek's stories also lacked perspective on the value Mike Armstrong has created for AT&T's shareowners. It's true that our stock is about 40% off its 52-week high, but WorldCom's is down 71%, and others even more. When Armstrong got here, AT&T's total market cap was $68 billion. Today, including the value of the wireless business we recently spun off to AT&T shareowners, it stands at $112 billion, a 65% increase and counting.

Richard J. Martin

Executive Vice-President


Basking Ridge, N.J. Your publication stands almost alone in drawing the correct picture of what is known about global warming and what isn't. I must quibble with your policy conclusions, however. "What to do about global warming" (Editorials, June 25) states that, despite the uncertainties, "it would be prudent to begin curbing CO2 emissions." That is not clear. The world is a risky place, and wealth reduces vulnerability to risk. Natural disasters are far deadlier in developing countries than in developed countries, for instance. Rather than embarking on wealth-destroying energy-suppression policies in a foolish attempt to stabilize an inherently unstable climate, we should encourage resiliency-engendering economic growth throughout the world.

Paul Georgia

Environmental Policy Analysis

Competitive Enterprise Institute

Washington "Microsoft: Now, privacy concerns" (Editorials, July 2) and "A window into your personal life" (Legal Affairs, July 2) omitted certain critical facts about what steps Microsoft Corp. is taking to ensure consumers' privacy in upcoming .Net services.

Microsoft plays the role of facilitator but is not privy to all the information that consumers provide to partners such as eBay, UPS, Ticketmaster, or J. Crew. To protect individual information further, all .Net partners will be held to strict privacy requirements by contract.

For the .Net information that consumers choose to give to Microsoft, we have a strict "opt-in" policy, so that consumers control the information stored and who can access it. We communicate exactly how data stored with us will be treated.

Contrary to BusinessWeek's claim, current law does restrict a company's ability to reverse a commitment made in a privacy statement.

Richard Purcell

Director of Corporate Privacy

Microsoft Corp.

Redmond, Wash.

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