The Number You Have Reached….

Mar 6, 2006 2:41pm

Follow the logic of this: SBC, one of the last of the Baby Bells, buys AT&T, the shrinking long-distance behemoth, and a million articles get written about how "the phone company"–the only one of generations past–is gone, eaten, in effect, by one of its own children.

But SBC takes on AT&T’s name–and now it’s buying BellSouth, one of the other Baby Bells that were spun off when AT&T was broken up by court order in 1984.  The only two remaining Baby Bells (after 1984 there were supposed to be seven) are Qwest and Verizon.

How does this affect you and me?  For now, not very much…unless you’re one of the ten-thousand employees of the newly-expanded company whose jobs will be eliminated over the next three years.  (Yes, this does have to go through regulatory approval, but it’s hard to picture federal agencies quashing the deal.)

In the longer run, though, you can see telecommunications companies trying to fight the march of technology.  Already, in many ways, the price of communications has dropped to zero.  A phone company’s competition is not conventional phone companies; it’s Internet Service Providers…and cell-phone networks…and cable networks.  They’re all so intertwined that it’s hard to say, in a phrase, what today’s version of AT&T actually does–are they a phone company, or an ISP, or something vaguely labeled as "telecom"?

And there are so many players in the game that the original giants, deprived in an earlier era of their monopolies, decide the best defense is to go back to being giant.  SBC/AT&T (or whatever they are) were already the largest phone company in the country, and they’ll control Cingular Wireless (which bought AT&T wireless a couple of years ago), the largest cell-phone company in the country.  The new giant will have 71 million local-phone customers, 54 million cell-phone customers, and 10 million broadband web subscribers.

Is there a danger of a monopoly?  No, because even eBay (what do they have to do with phone calls?) is playing with web-based telecom.

But the managers of the new behemoth devoutly hope that you’ll keep paying for your communications services, perhaps because you’ll have a few less places to go for a better deal.  Give them time: Qwest and Verizon will doubtless be looking for mergers of their own.

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus