TELEPHONES: Long-Distance Family Feud

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The Baby Bells are growing up and threatening to get into a lot of mischief. At least that is the view of their old Ma. Since the seven regional phone companies were spun off from AT&T three years ago, they have been allowed to diversify into real estate leasing and publishing, among other ventures. Now they might get the go-ahead to compete in many businesses with their former parent. The Justice Department has recommended that U.S. District Judge Harold Greene, the overseer of the Bell breakup, remove nearly all restrictions on regional phone companies, permitting the Baby Bells to sell electronic- information services, manufacture telephone equipment and provide long- distance service if it is outside their area of local monopoly.

AT&T staunchly opposes the recommendation. It agreed to the breakup with the understanding that its offspring would stay out of the manufacturing and long- distance businesses and feels the Justice Department is trying to tear up the original deal.