On Tuesday, March 7, 2006 at 4:14:57 PM UTC-5, Garrison Hilliard wrote:

Ma Bell gets her family back together
BARRIE MCKENNA

Globe and Mail Update

WASHINGTON — Okay, let's get this straight. There once was a Ma Bell. She was
huge and she owned everything that had anything to do with telecommunications --
from making black rotary phones to selling local service.

Uncle Sam didn't like that. So he split up Ma Bell, creating a family of Baby Bell orphans. You might know them today as Verizon, SBC, Qwest and BellSouth.

AT&T remained the jewel. It had the legendary engineering savvy and a keen eye
for the next big thing in technology.

But two decades after the breakup, Ma was growing old and tired. So SBC (formerly known as Southwest Bell) bought its own mother and they moved in together.

Now SBC, which recently stole its mother's name, is also taking in one of its sisters. AT&T, based in San Antonio, Tex., has struck a deal to buy BellSouth for $67-billion (U.S.) in stock.The family tree is starting to look pretty weird. Borrowing the title of that old Paul Simon song, Democratic congressman
Ed Markey of Massachusetts has already dubbed the merger a "mother and child reunion."

That suggests something joyous is going on here. That's not true for all telecom
customers. At the time of AT&T's breakup in 1984, there were seven Baby Bells.
This deal would leave just three.

This is full circle, a reunion, if you like. But it's driven by pure economics.
The natural inclination of big companies is to grow ever-larger, becoming as monopolistic as antitrust regulators will allow.

And with the pro-business Bush administration having remade the face of the Justice Department and the Federal Communications Commission, the players know
now is the moment to get some of these big mergers approved.

But just what market is AT&T and its siblings trying to control? It isn't so much about phone services, such as wireless, local or long distance. It's about
access to the Internet, which is rapidly becoming the common platform for many
of these services.

Verizon and AT&T will control two-thirds of all local phone connections. AT&T and BellSouth would become a telecom giant with $130-billion a year in sales and
70 million local phone customers in 22 states. AT&T will also own 100 per cent
of wireless provider Cingular -- the largest cellphone company in the United States. AT&T and BellSouth now jointly own it.

AT&T chief executive officer Edward Whitacre said the deal would speed up the public's adoption of next-generation technology, integrating both wireless and
traditional wired networks.

"Together we can do it faster than each company could alone," he said.

Maybe so. The local phone providers envisage a day when they'll be able to offer
movies, music, TV and long distance -- all via the Internet.

In a status quo environment, the phone companies are little more than providers
of an increasingly cheap commodity -- broadband access. DSL service, which once
cost $40 to $50 a month, is now selling for less than $20. Customers can buy broadband from multiple sources, including cable companies.

The danger of doing nothing is problematic for the likes of AT&T and Verizon. They can stand idly by and watch others hijack their lines to make money, such
as Apple with its iTunes service or Vonage with its Internet long-distance.

So local phone service is the only monopoly card they have to deal. And they are
using it as leverage.

Verizon, for example, now requires customers to take local phone service if they
want its DSL. That is apparently aimed at dissuading users from taking a cheap
DSL deal and then signing up for one of the over-the-Internet phone offerings,
such as Skype or Vonage.

That's just the start. It doesn't take much imagination to see what other services are coming down the broadband pipe. The phone companies want to bypass
the cable company monopolies to offer TV. On-demand movies are already available, but the service is clunky and slow. But as broadband expands, that too will change. Long distance service is already a reality.

And eventually, much of this will go wireless.

AT&T and Verizon are adopting the strategy that if they're really big, customers
won't be able to get around them to do all these wonderful things.

And Mr. Whitacre apparently believes that AT&T, not Vonage or Apple, will be the
one to make money off this plethora of services.

And to do that, the company figures it must be really big -- bigger than Ma Bell
herself.

bmckenna@globeandmail.com

http://www.theglobeandmail.com/servlet/story/RTGAM.20060307.gtibworld07/BNStory/Technology/home

AT&T To Buy Time Warner And Bring Crappy Cell Coverage To Westeros


Telecom giant AT&T announced that it would buy Time Warner Inc for $85 billion (~ the GDP of Ukraine) to create one of the largest telecom and media companies in the world. AT&T would take over all of Time Warner, including HBO, CNN and Warner Bros. The
move is the latest in a series of consolidations and mega-deals: Comcast now owns NBC, Verizon owns Yahoo! and AOL, which includes Tech Crunch and Huffington Post. The deal wasn’t exactly welcomed with open arms, stoking fears of a rising media
oligopoly. It even brought Donald Trump and Hillary Clinton together, with Trump saying he would block the deal and both Clinton and Kaine expressing concerns about it.


Timeline: How AT&T Reinvented Itself Over Time

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