AT&T; Outage Disrupts Service, Markets in N.Y.

NEW YORK — A severed AT&T; phone line crippled long-distance calls today in the New York area, halting trading at some financial markets and delaying hundreds of airline flights in the Northeast.

The problem was traced by the computers that run American Telephone & Telegraph Co.’s phone network to an underground fiber-optic phone line in Newark. A crew yanking out an old cable accidentally severed the fiber-optic line next to it, AT&T; said.

Beginning at 6:30 a.m. PST, the majority of calls into and out of the metropolitan area were met with a recorded message saying all circuits were busy, AT&T; said. The problem also disrupted some overseas calls, the company said.

Spokeswoman Marilyn Reznick said 60% of calls into and out of New York City were still blocked as of midafternoon.

The problem disrupted the flow of information to Federal Aviation Administration facilities in the New York, Washington and Boston areas, affecting hundreds of flights at airports from Washington to Boston, not just flights destined for New York.

By midafternoon, the delays at New York’s airports were reduced to 15 minutes or less. FAA spokesman Duncan Pardue said that the FAA is a priority customer of AT&T; and that its lines were restored before those of other customers.

The problem also disrupted trading at several of the major financial markets based in New York.

The New York Mercantile Exchange, the world’s largest energy futures market, was closed at 10:28 a.m. because of the phone problems. Traders could not make long-distance phone calls, and the exchange was unable to transmit pricing information around the country, a spokeswoman said.

The trading halt came just as some of the biggest news in the five-month-old Persian Gulf standoff broke: face-to-face diplomacy between Iraq and the United States, which sent oil prices tumbling in the London market. But New York petroleum brokers couldn’t trade on the news.

A year ago, on Jan. 15, 1990, AT&T; long-distance service was disrupted across the country for about nine hours. That outage, which reduced the company’s capacity by 50%, was blamed on a computer software flaw.