* SBC’s planned buy of AT&T raises two important questions
Last week, SBC announced its intention to buy AT&T. Today, we’d like to weigh in on two subjects that will surely face close scrutiny from agencies that will have to approve the acquisition.
First, no doubt someone will dust off the Modification of Final Judgment (MFJ) that broke up the Bell system some 20 years ago. In the MFJ, Judge Green wanted to make sure consumers and businesses had competitive choices for telephony and information services. We believe that two decades of open competition combined with technologies like the Internet, broadband access, and voice over IP have made for a competitive environment that industry consolidation can’t undo. As we’ve stated before, the cheap voice “genie” is out of the bottle (at least in North America) and the genie can’t be put back in.
Second, regulators should ask if business customers would be better served. We believe that if the combined companies bring their best attributes to the mix, the business customers can be better served. AT&T’s very strong suite of managed data services and its upgraded core network capabilities (including MPLS) are clearly bringing value to the business market. SBC brings leadership in broadband access, an insightful strategy that includes wireless services in the business mix, and sound financial management.
Of course, there are some negatives – not the least of which is the projected loss of at least 12,000 more jobs if the acquisition is completed. (In the spirit of fair reporting, we should point out that Larry has family members on both the AT&T and SBC payrolls.)
Bottom line: Technology advances and industry consolidation will continue, and customers will continue to get the better, faster cheaper services they demand.
