AT&T

(ATT)

announced plans Wednesday to cut long-distance rates for its customers in Texas, in an attempt to "compete vigorously" against

SBC Communications

(SBC)

, the local-phone giant that received

Federal Communications Commission

approval last month to offer its own long-distance service in the state.

AT&T did not immediately give details of the rate cuts, but noted that it would offer new calling plans aimed at lowering long-distance costs for specific types of callers.

AT&T's rhetorical challenge comes less than two weeks after the FCC approved SBC's bid to compete in long-distance markets in Texas. SBC, the nation's largest regional telephone company, had previously been barred from offering long-distance service under laws that spawned from the 1984 breakup of AT&T's phone monopoly into regional Baby Bell phone companies.

But, helped by a softening of the 1984 restrictions in the

Telecommunications Act of 1996

, San Antonio-based SBC became the second local telephone company to offer long-distance service in its home state after its reached an agreement to open a majority of its local phone lines to local service competitors.

Verizon

(VZ) - Get Report

communications, formed from the recent merger of

GTE

and

Bell Atlantic

, became the first Baby Bell to offer long-distance service last December.

SBC's long-distance service, introduced in late June, offers several calling plans, including a basic 24-hour, 9-cent-a-minute plan with no monthly fee.

AT&T, based in Basking Ridge, N.J., contends that it already gives Texas customers better deals than SBC, and that its new calling plans will result in even more savings. Currently, AT&T offers many customers long distance calls at a rate of 7 cents a minute.

AT&T also contends that SBC is actually denying customers the benefits of competition by limiting its own long distance service to areas where SBC still has a local phone monopoly, and by making it available only available to existing SBC local customers. SBC denied those allegations, saying that all of Texas is now open to local service competition, so it no longer holds any local monopolies.

"The public record speaks for itself," said Saralee Boteler, a spokesperson for SBC. "The

Texas Public Utilities Commission

, the Federal Communications Commission and the

Department of Justice

have clearly ruled that we irrevocably opened the local phone market to competition when it ruled that SBC could compete in the Texas long-distance market last month."

An AT&T spokesperson was unavailable for comment.