New AT&T Acquires BellSouth 406
spune writes "Only months after SBC's acquisition of AT&T last November, the newly rechristened telecom has announced that it plans to buy fellow Baby Bell BellSouth Inc, of Atlanta, Georgia for $67 billion. This action by AT&T will consolidate more than half of the original Bell System into a single entity, leaving only Verizon and Qwest as remaining Bell family competitors. Analysts predict this deal will be approved by the FCC with only minor restrictions on the new company, which will serve residences and businesses from California to Florida."
They're trying to get it done quick. (Score:1, Insightful)
So what was the point (Score:5, Insightful)
She's back (Score:5, Insightful)
Re:So what was the point (Score:5, Insightful)
Re:Headline should read... (Score:5, Insightful)
Tense is generally used to indicate a timeframe relative to the present when something happened, is happening, or will happen.
Notice how in the article, they state that AT&T is planning on acquiring Bellsouth. If you read further, you'll notice other sources say the FCC approval process could easily take around a year.
Because, if this is going to happen, it will be happening in about a year, saying "AT&T acquires Bellsouth" creates a tense error, and if you want to really get technical, yes, it is a fairly big deal especially if you consider how significant the error is.
Re:They're trying to get it done quick. (Score:5, Insightful)
Re:They're trying to get it done quick. (Score:5, Insightful)
It does bother me quite a bit that they will have near total control of the DSL market.
Re:Wait a minute (Score:3, Insightful)
When did we EVER have competition? Except in the biggest markets, people have never had any choice for their local telco.
The only difference between now, and when it was a monopoly, is that they go by a different name in different areas. They're still just matching each other's prices, terms, etc.
The whole idea of a telco is antiquated. Now, at least we're seeing competition to the telcos via cable and wireless providers.
It probably was just a waste to break AT&T up. What good things can you list, that have come out of it?
Re:Problem with that logic... (Score:5, Insightful)
Basically, there are massive density economies in delivering cellular service (e.g. it's better to use a higher percentage of the capacity of one expensive tower vs. having four separate expensive towers running at lower utilization rates), and as such, there are efficiency gains that can come out of such mergers. We're more likely to see continuing consolidation in national cellular markets with a much bigger space for international competition. The companies want to move forward with consolidation, and the anti-trust authorities aren't really standing in their way.
In the US, the anti-trust people really only care about post-merger consumer prices (rather than the increased profitability of the merged entity). The degree of substitutable goods and the nature of price competition in cellular markets seems to keep downward pressure on rates. This is why they are letting all this go through.
As for VOIP (and the greater economy), you only need two firms to get good competitive results from these types of goods. Landline phones and VOIP are essentially homogenous products, and as such, it's perfectly logical to assume that people will go with the firm that offers them the best price/quality ratio. Outside of collusion, odds are good that you will see competition putting downward pressure on prices in landline telephony even if both landlines and VOIP are delivered by monopolies.
Re:This can't be good for the consumer. (Score:2, Insightful)
Re:Inevitable. (Score:3, Insightful)
Judge Green (Score:4, Insightful)
Re:I say GOOD (Score:3, Insightful)
You must be a young'en. Let me tell you about how it was back in the day. Ma Bell used to charge a monthly rental fee for each and every phone in your house. Not each line into your house, each phone hooked up that that one line. Want another phone in another room for convenience? You have to pay for it. Each and every month. You weren't allowed to buy your own phone, you were forced to rent theirs.
Ma Bell coming back is NOT a good thing for consumers.
Predictably enough... (Score:2, Insightful)
In other news, the zombie of Harold Greene has been reported roaming about the countryside vandalizing telephone booths, muttering something about 'Humpty Dumpty' and a monolith somewhere...
Re:This can't be good for the consumer. (Score:4, Insightful)
Less competition = less push for innovation, higher prices, and every reason Bell was broken up in the first place.
No, it was broken up because of an antitrust suit brought by MCI. The sad part was that AT&T was one of the most innovative companies in the world. Witness the transistor - a Bell Labs product. If anything, the monopoly hurt them because they were not (because of regulations) allowed to take advantage of their innovations outside of the telephone market.
What they did have was something that's been dropped - service. You needed a phone installed, it was done, and done quickly. Have a problem? Fixed. Need to talk to someone about an issue? There was someone on the end of the line. Compare that today's "advantages". Need a phone installed? Wait a week or two. Got a problem with your line? Maybe they'll get around to fixing it in the next month. Have a problem with your bill, or need to talk to someone about an issue with your phone service? Welcome to the support hell of pushing buttons, listening to recorded messages, pushing more buttons, and maybe at the end of it you'll get to talk to someone who may speak English. (sarcasm) Oh yeah, we're so much better off!(/sarcasm)
Re:Problem with that logic... (Score:3, Insightful)
Re:Inevitable. (Score:2, Insightful)
Innovation happens because some shmoe "entrepreneur" smells a profit. If "entry costs" are high, it will require something extra to enter that market. Usually, this is done through innovation rather than trying to beat the established player at their own game.
Wired vs. wireless is a good example of this. Yet still, local governments have extended their monopoly grants to cell phone providers to prevent that very innovation. So is cable TV, which can provide telephone service as easily as it can provide IP, but is almost everywhere itself granted local monopoly status.
I can assure you that the "high cost of entry" myth has been well thrashed since before the time of Adam Smith. After all, without the East India Company, who would risk sending a ship to the other side of the world for something like tea?
Re:Problem with that logic... (Score:5, Insightful)
Not to mention AT&T would then have control of the bigger half of cellular customers in America (Cingular/AT&T Wireless). The last step would be their re-acquisition of Verizon (which would be epic at this point, as Verizon just acquired MCI, which was one of the companies AT&T flagged as a "competitor" in their earlier anti-trust proceedings).
So as a consumer, I can see this leading down a very dark road for consumers.
scary (Score:1, Insightful)
Re:They're trying to get it done quick. (Score:2, Insightful)
If Republicans keep the White House even after AT&T returns to a scale similar to its mid-1980s monopoly, there is no chance that either AT&T or Microsoft will see either monopoly status "revisited". In fact, they will redefine American monopoly law together. Legitimizing it, reversing a century of government representing the people defending ourselves from monopoly market predators.
Probably even more important than the White House, the Republican Congress is responsible for oversight of telecom and corporate takeovers. Which means AT&T has to get back on monopoly track before Democrats possibly retake the House, Senate or both this November.
Re:Inevitable. (Score:3, Insightful)
Re:Inevitable. (Score:2, Insightful)
Roads are a natural monopoly. How can you have more than one road in the same place? Sewers. Are you honestly telling me multiple companies are all going to lay sewage pipes so that you can choose which one to hook your toilets up to? These examples are indisputable proof of the existence of natural monopolies, but arguably many other things, even those you mention, are also natural monopolies.
The free market is okay for some things, but it simply isn't the most efficient way of getting some things done. Do you think it would be more efficient for dozens of companies to all run electrical and telephone wires to your home so you can choose which one to buy? Would free market fire companies really protect the community efficiently? If you don't buy fire protection, your home burns, endangering others homes as well. Anything more efficiently run as a monopoly is a natural monopoly.
I can tell from your sig that you are a Libertarian, and Libertarian dogma says that anything and everything can be most efficiently decided by the free market. Back here in the real world, real people have noticed that it simply doesn't work that way and moved on to other ideas.
Have you noticed that there are no Libertarian nations or states anywhere in the world? Every other political philosophy has managed something. Even if it turns into a trainwreck, at least they put their principles into practice. Since Libertarians never actually put what they preach into practice, they can always claim that they have the perfect ideology. If only everyone else would just listen to them and do things their way...
Comment removed (Score:5, Insightful)
Breakup was along the wrong lines. (Score:5, Insightful)
It's time for another breakup, and this time it should go as follows: the RBOC's (soon to be the One Big BOC) maintain the physical cable plant, and they maintain the central offices basically as colocation facilities. Then, you have carriers (none of which are allowed to be RBOC's [or the imminent One Big BOC]) as colocation customers in those central offices. They lease customer loops from the BOC/LEC/whatever and then they provide "telecom services" over those loops. We don't care what the services are -- dial tone, DSL, whatever. No distinction between voice and data, between local and long distance, whatever, because as we know, it's all the same crap now.
THAT is the perfect way to keep the government-granted monopoly working efficiently for consumers. The monopoly must extend only as far as it needs to, and no further.
Re:This deal might just bring down SBC! (Score:3, Insightful)
The part that you left out, additionally, is that this lack of talent is exactly what the public wanted.
We want 6 cents per minute? 5? 3? 2? People aren't free - and you know full well how much a *competent* lineman or switchman costs. Given the promise of an automated "smart" system that is run by monkeys, or a legacy labor-intensive, skill-based system that requires "experience" (e.g. TIME)... Cheap, Fast, Correct: Guess which two we (the customers) picked.
In short, we're getting exactly what we were willing to pay for (external forces aside, such as MCI cooking their books, thereby causing market reactions to a fictional situation, etc).
Yes? No? Maybe?
Re:Whining about it won't accomplish anything... (Score:2, Insightful)
I like your thinking.
Re:They're trying to get it done quick. (Score:1, Insightful)
Re:They're trying to get it done quick. (Score:4, Insightful)
Not even close. The biggest thing is competition in the local phone market. Now the copper-loop provider competes in more and more markets with the cable provider, and is starting to compete with the power provider. Soon new providers may be offering Wireless Local Loop. AT&T also is far from having a monopoly on long-fiber: gas companies, power companies - even Google - have that stuff. It is this type of inter-modal competition that means it makes sense to merge. You have to bulk-up to compete. Not merging would be suicide.
At the end of the day, it is very likely the consumer will buy all of their communications products (voice, video, data, and mobile) from a single provider, and competition will be in the bundle. If providers don't offer all four, buying from them will make about as much sense is a buying from a car maker that sold the entire car minus the wheels and seats.
It is in fact de-regulation and intense competition that make this move necessary.
Re:They're trying to get it done quick. (Score:5, Insightful)
Bush was warned about Katrina's risk of flooding New Orleans, went on vacation instead, and resurfaced long enough to lie about no one anticipating the levees would fail.
He was warned about Global Warming, and instead has his administration gagging NASA scientists while presiding over the biggest increases in Greenhouse emissions ever. Now the ice is melting even faster than the scientists predicted.
Bush took office with Microsoft ruled a monopoly, and his Justice Department let them continue unabated. The years since have seen continuing abuses, but only foreign courts are doing anything about it, because Bush won't do anything to protect the market. A market that has remained unsafe for new competitors during his stewardship.
Bush was warned that Iraq would collapse into civil war, and now acts like its just a nasty surprise - while he isn't denying it's happening. He got a daily intelligence brief titled "Bin Laden Determined to Strike in US", after repeated warnings from Clinton's outgoing team and Clarke, the counterterrorism administrator who stayed on. Then he acted surprised when his deprioritization collected the 9/11/2001 planebombings. He was warned before N. Korea got the bomb, before Iran got the bomb, that cutting taxes on the rich would keep the regular economy moribund, that screwing with the Mideast would keep oil prices sky-high.
So maybe you know something about Bush and the Superbowl that we haven't heard yet. Anonymous Cheney, is that you? Shouldn't you be at target practice, or something?
Re:They're trying to get it done quick. (Score:3, Insightful)
Re:Inevitable. (Score:1, Insightful)
If you promise "better service", the incumbent has plenty of time to improve their services.
Clearly that would be a real tragedy for the consumers.
Comment removed (Score:4, Insightful)
Southwestern Bell, AT&T, and BellSouth (Score:3, Insightful)
I took a chance with SBC local phone service two years ago. I tacked on DSL for convenience, but soon regretted it. Every encounter with SBC has resulted in pain and grief. There were numerous misbillings. As soon as I had the chance to switch, I cancelled my service. I will never ever go back to them. I had the same experience with old AT&T. In fact, I currently do not use a land line. If I were to get one, I would use one of the cable companies.
I don't know how these companies can make or sustain profits when they treat their customers like they treated me. There must be some financial shenanigans occurring behind scenes. You can't run a successful business by pissing off your customers.
That's bull (was: Re:Inevitable.) (Score:2, Insightful)
Bull. Water service, for example, is a natural monopoly because of the ridiculous inefficiency associated with RUNNING COMPETING PIPELINES to EVERY HOUSE. A natural monopoly results whenever there is such an economy of scale that only one provider can efficiently provide the product or service. With new techonologies, these types of products and services are becoming less common, but they still exist.
'Only government is able to grant monopoly status'
Bull. If there is a natural monopoly in an area, the free market will cause there to be only a single provider. Even if there isn't a natural monopoly, given large enough startup costs, the first provider in a market can sometimes maintain his initial monopoly through predatory pricing or the threat of it. This is harder to do when it is illegal, like it is in the U.S.
You made some goods points in your post, but the last two paragraphs are just nonsense. I can understand where you're coming from, though, because I used to think the same way. When I was 10.
Re:This can't be good for the consumer. (Score:3, Insightful)
This does not mean that "the New AT&T" will do us any good. Without SOME sort of regulation, we're done for. ALSO, you all forget that Verizon *IS* the other "BIG" comprtitior --> GTE. And YES, they are "fated" to merge. Eliminating ALL "big" phone companies, and getting back to one. But we NEED them to be REGULATED. SERVICE was ALL the old AT&T cared about. It was 1,2, & 3 of the top five things they worked toward. We also have to let them make money off their inventions. The old rules did not allow that.
The key to all of this is creating regulation that REWARDS innovation. Bell labs did the transistor, the first work on disk drives, the LASER (independently, but later than Gordon Gould), TELSTAR, and on and on. Without the proper fiscal incentives, innovation will "not be worth it", from THEIR point of view.
Without innovation, we ALL lose, BIG-TIME.
I think this can be a good thing, if we do it right. I also think it is inevitable. The ONE thing we have to LOSE if the 1980's mentality. Greed is NOT good. If we have a single Bell system, and pay the CEO $100 MILLION a year, we are done for. [By modern scales the CEO of the largest company in the world is worth $100 Mil. We cannot have that kind of thinking.]
Re:They're trying to get it done quick. (Score:3, Insightful)
Because the USA of yesterday that broke up Ma Bell was a democracy, and the USA of today that is letting it remerge like a T-1000 is a plutocracy.
Nationalisation (Score:3, Insightful)
There are onlt a few such services. Electricity, water, sewage, air, and landline telecommunications. You cannot allow the free market anywhere near these services. If you do, service will degrade, people will suffer and your economy, and indeed society, will slowly but surely fall behind.
Broadband penetration in the US is pitiful in comparision to other OECD countries. There are electricty blackouts in major US cities. People in metropolitian areas are being told to boil their water. This is what happens when you privatise public services. You get the dregs of the profits running them.
Somethings are just too important to leave to the likes of Gordon Gecko.
Re:Well (Score:3, Insightful)
That said, the environment is considerably different now, and just as AMTRAK has a monopoly on passenger rail but hemmorages money, I'm not sure that a phone monopoly is worth all that much today.