AT&T has to peer with Level 3 or else AT&T will lose their status as a teir 1 network making them useless.
It sounds like you guys are on the wrong end of the deal with AT&T. I would imagine you have no less than a DS3 with them, and you TOS should be that of a bussiness class. With is about the same as ours as our (even though I'm with an ISP, both fall under Data Services) In your TOS if you specify a probelm (with proof) on their network or their routing which includes peering, they have to correct this problem or give a reasonable explaining to why it's not an issue.
When we had trouble with AT&T and they were takign their sweet bellybutton time, we could go to their west coast director and he would kick some butts for us. Lately AT&T only problem with us is they have been slow as hell. It shoudl take +2 months to order a OC3, Still waiting on a Gig link for over 4 month, and they still can't quote us on a peer to peer transport. But I think it's cuase they are still trying to work out their ADSL2 idea with doesn't look so hot, cuase it's not good enough to compete for what they want it to do.
If AT&T can't do this for you, maybe you guys should switch over to an ISP that is multihomed and aceepts comunities strings (decent ones,) but you would have to switch over to BGP and get your own AS #, you wont have to get your own IP block, but it would help. It's not that hard to get a /24 from ARIN. When I need a /17 I just ask for a /18. Seems to be easier to request higher an need and get what you actualy want, then to request what is needed and justify it.