2.02.2005 | End of the line

The buyout of AT&T by SBC this week is symbolic on many levels, but most importantly it marks the end of an era in telecommunications. AT&T traces its history to Alexander Graham Bell, the inventor of the telephone, and it was once the invincible monopoly the government broke up in 1984 in the name of increasing competition in long-distance telephone service.

Now here's the irony of the SBC-AT&T deal: SBC, once known as Southwestern Bell, was one of the "baby bells" created by the breakup of the old Bell monopoly AT&T had in 1984. So in essence SBC is buying its former parent. Now the AT&T SBC is buying isn't the same one that existed in 1984: in 2000 AT&T announced it was reorganizing into four separate companies: consumer, business, wireless, and broadband. The broadband division has since been purchased by Comcast, and the wireless division is now owned by Cingular -- notably enough, Cingular is a joint venture between SBC and Bell South.

So the AT&T SBC is buying is mainly its business division, followed by its consumer division. But the consumer division is what consumers should be most concerned about. In 1996, the Telecommunications Act passed by Congress was only supposed to allow local phone service providers like SBC to provide long-distance service if they provided similar competition at the local level. Last year an FCC ruling ended this requirement, which forced AT&T to leave the local phone market and may have spelled its ultimate doom as a phone service provider. (In fact, AT&T was involved in a media war with SBC over this very FCC ruling -- see http://www.voicesforchoices.org)

Now the other bell companies will be pressured to buy a former long-distance competitor, leading to fewer consumer choices. This will leave most Americans with only two choices for phone service: a former baby bell or the only local cable company. Hardly the competition envisioned by the 1996 act.

One can only hope that local phone competition will someday be resurrected to give consumers the best choices in service, with or without AT&T in the business.



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