SBC and AT&T Boards Vote to Go Ahead

telstar writes "As a follow-up to earlier coverage regarding the possible acquisition of AT&T by SBC, MSNBC is reporting that boards from both companies met to vote today and that the acquisition will go forward at a price of 16 billion dollars. Both companies are currently keeping the deal quiet."

Comments

Let's not slide back. Or should we?

[caferace]

Of course, a lot of this is going to rest on the combination making it past US gummint Antitrust hurdles.

I don't see this happening anytime soon. My SP asked me today why we ever broke up "Ma Bell" in the first place. I half-joked we'd still be dialing like this: (making circular motion) if we hadn't...

Re:Let's not slide back. Or should we?

[tinrobot]

I think you confuse the current government with those in the past who actually cared about creating competition.

George Bush's FTC will approve the merger. Guaranteed.

Re:Let's not slide back. Or should we?

[fm6]

Hurdles? The current administration loves mergers.

You know, the Bell System breakup wasn't entirely involuntary. They could have continued to drag out procedings until they became irrelevent -- the usual procedure when the antitrust people go after a company that size. (And at the time, AT&T was the biggest company in human history.) But management wanted to get out of the local phone business. As long as AT&T remain a public utility, there were a lot of businesses they couldn't enter: computers, telecom hardware, wireless communication. They had tons of technology that they had invented (remember where Unix came from; not to mention solid state electronics, satellite communications...) but couldn't profit from directly. They were sure that if they were allowed to compete in an open market, they'd own the world.

Didn't happen, of course. It take more than good technology to be the leading player. It takes basic business skills, skills AT&T's management lost when then were a legal monopoly.

Re:Let's not slide back. Or should we?

[jdreed1024]

I don't see this happening anytime soon. My SP asked me today why we ever broke up "Ma Bell" in the first place. I half-joked we'd still be dialing like this: (making circular motion) if we hadn't...

Well, Ma Bell was certainly being as bad, if not worse, than Microsoft. Forcing operating companies to purchase equipment from a subsidiary (Western Electric), routinely undercutting competitors such as MCI, and most importantly in this day and age of companies deciding what users can and can't do, doing everything to prevent users from using non-Bell equipment on their phone lines, despite an FCC ruling that the consumers had a right to do that.

On the other hand, perhaps all these consolidations of the Baby Bells are trying to tell us something - maybe that's just the way the market works. Certainly it would make life easier for consumers to not have to switch phone companies every 5 years. I've gone from New England Telephone to NYNEX to Bell Atlantic, and finally Verizon. And it's been barely 20 years since AT&T broke up. OTOH, service has suffered - I used be able to make a call from a pay phone for a dime in Massachusetts, even 7 years ago. Now it's 50 cents minimum charge, and you're lucky if you can even find a phone booth, let alone one that's run by Verizon and not one of these 10-10-whatever companies. Is that because the big companies don't care? Or is that because of cell phones become more commonplace? Who knows. But I bet in 5-10 years we'll be right back where we started, and someone will have been laughing all the way to the bank.

Re:Let's not slide back. Or should we?

[Anonymous Coward]

George Bush's FTC will approve the merger. Guaranteed.

I'm no fan of Bush, but it's not like this is a Republican thing. My phone company changed names 3 times under Clinton (New England Telephone->NYNEX->BellAtlantic->Verizon. (Well, Verizon was in mid-2000, so that's Bush, but the foundations of the merger were well underway by inauguration day.

We need to stop pretending that one party is pro-big-business and the other isn't. Politics is all about money, and only big companies can give the politicans the money they want.

The only difference between Republicans and Democrats is that one shits on your face while telling you you'll get a tax refund, and the other shits on your face while telling you it's the only way to save the environment.

Re:Let's not slide back. Or should we?

[bfizzle]

Did anyone ever stop and think that maybe it is beneficial for these companies to merge?

It is very possible there is benefits tied to economies of scale for large companies. It is one thing when these large companies put up barriers of entries to their markets or when the government does it for them, but if these companies get this big naturally, good for them.

It's retarded how many /.er claim to be Libertarians but the second you start talking real economics they turn into protectionists. Bah I'm sorry to tell you but the Libertarian party doesn't see anything wrong with one company providing phone sevice to you as long as there is no barriers to entry for other competing firms.

Re:Let's not slide back. Or should we?

[gcaseye6677]

I don't think this will make any difference to the end user. It's not like AT&T ever presented a low cost alternative to anything. With VOIP and cell phones, SBC can never have the type of monopoly that AT&T once had.

Re:Let's not slide back. Or should we?

[drmerope]

"Having said that, when I lived in Houston (GTE then Verizon when I was there) I was always mildly amused to see that I had to pay a few cents extra for the privilege of having touch-tone dialing. Yes, touch tone dialing was an additional cost paid service."

The reason for this was regulatory. When the exchanges are upgraded to support services like Touch Tone or Caller-ID, every line supports those services--the capital cost is already sunk.

However, the tariff regulations did not permit the teleco to simply active said service and charge the extra cent per customer unformly--even though the capability was already there.

This was done because their was a congressional mandate to keep the cost of basic POTS service low--and infact often below operational costs. Thus, the oddity of being charged for touch-tone service. It was a little congressional welfare tax snuck into your telephone bill to keep the minimum cost low.

Both companies are keeping the deal quiet?

[RasputinAXP]

This is the loudest quiet deal I've ever heard.

Re:Both companies are keeping the deal quiet?

[squiggleslash]

Quite. Especially as it's featured fairly prominantly on SBC's home page.

Define "quiet"

[physicsphairy]

" Both companies are currently keeping the deal quiet."

Yes, that's quite evident from its being posted on Slashdot, of all places.

Don't worry guys, I'm sure nobody will read it! Probably not even the second or third time they post it!

Re:Define "quiet"

[Suburbanpride]

IIRC, Didn't all the SBC folks deny this last week when it first popped into the news? I find It strange that they would completly deny it if it was already to the point where they wer voting on it.

Re:Define "quiet"

[phalse phace]

Of course nobody will read it. This is /. afterall.

In other news...

[game kid]

Bill Gates responds "16 billion? If they need the dough they know where to find me."

First this, then the world

[Bite-lover]

Does it just rub me wrong that all these major companies are merging? If this trend really continues we could easily find ourselves with no choice on communcations period.

Re:First this, then the world

[game kid]

SBC was one of the "Baby Bells" spun off from AT&T in 1984 for that same reason (because of AT&T's Bell System monopoly). I hope we do not revert to having one massive Bell conglomerate.

Re:First this, then the world

[Pyrion]

Yup. I just switched phone carriers from the local telephone monopoly to the local cable monopoly.

Great for shareholders

[Anonymous Coward]

bad for the consumer,
question is where exactly are all these consolidations heading ? what happens when there are only 2 giant companies in the whole world ? (see the recent p&g merger) do we wipe them out and start capitalism all over again or maybe we will evolve a better economic model

either way less choice is bad for the consumer

Re:Great for shareholders

[the_2nd_coming]

the next economic model after capitalism will only take hold when capitalism can no longer support the population... however I do not think it will be communism like Marx says... i think that it will be corpratism.... no competition and one monolithic source of production.

if you look at the trends of economic development over the centuries, a slow and even evolution takes place... right now capitalism is being transformed into something else. people will no longer have property but will purchase all their needs from a central body, no, not the government like Marx said, but the corporation... a large monolithic corporation acts just like a communist government. it is responsible for all the welfare of the people who it serves and it serves the people because they all work for it. the government may get supplanted by the corporation at some point.

it sounds bad, but this form of economic system can either be good or bad. it will depend on the implementation... however, new economic transitions (real ones based on natural societal pressures) tend not to fall apart because they take so long to transition from one state to another, giving the society time to accept and learn how to support the system.

ANTI-Trust?

[gambit3]

It's one thing to say that the boeards give the go-ahead (it was expected), but this deal should REALLY get close Anti-Trust inspection.

THAT's the go-ahead I'm really curious about.

Good or bad for consumers?

[Suburbanpride]

MY two years with SBC DSl were the worst two years of my life, always down, always slow, laggy on CS. I was glad when my contract was up.

I heard ATT wireless sucked untill it was sold to cingular. If this merger goes through, I wouldn't mind it so much if it meant consumers were going to get better service, but whats the chance of that?

My guess is that this will end up with a lot of layoffs and not much benefit to anyone except for a few large shareholders.

I feel a great disturbance in the POTS. . .

[Limburgher]

...as if thousands of people all dialed 911 at once. . . and got a busy signal.

Re:I feel a great disturbance in the POTS. . .

[UTPinky]

911 does have other meanings... In the US, 911 is the phone number to call in the event of an emergency (ie, need the police, the fire dept, an ambulence, etc), and has been for over 35 years...

http://www.911dispatch.com/911_file/history/911his tory.html

oh, and by the way... its a star wars (Obi-Wan Kenobi, episode IV) reference, not a matrix reference.

Wasn't AT&T broken up for a reason?

[Anonymous Coward]

If I remeber correctly didn't we shatter Ma Bell into the baby bells once upon a time? It's like the liquid termenator in T2. It would seem they are all sucking themselves back togeather again.

History in the making

[Yonkeltron]

Grep through your fortune files for references to AT&T.....it's amazing how many jabs are all too true now.

This is truly the end of an era.

Great

[Bionic_Baboon]

Now were gonna have "Ma SBC"

Bell Labs

[jaymzter]

Any word on what this means for Bell Labs? Does SBC have an equivalent, or experience managing an organization like that? It would be a shame to see a legacy like that come to an end, sold or be spun off.

Re:Bell Labs

[Suburbanpride]

My uncle was a pure researcher in the laser wing at bell labs from 1975-2001. Between 1996-2001 when lucent took over, his department went from over 250 people, to 100, to 50 and then to none. Lucent was interested in only keeping its stock price high (it didn't work) and not investing into research that might not be profitible until along time down the road.

Without an investment in research, american industry would be no where. and if everyone keeps cutting their R&d, I think the the Asian companies will put every american one out of business.

My uncle is currently working with a Japanese company, along with AMD to develop a ~50nm silicon etching process that may be profitible by 2010. Right now its a big money hole, but in 5 years, it could be the next big thing.

There is no creativity or risk taking going on at bell labs anymore.

The purpose of purposelessness

[Anonymous Coward]

We are going to have to take a serious look at antitrust law in the United States. It seems like we don't ever enforce in a real way. We make moves to enforce it, we convict people, and then we stop short of solving the problem. There's one big instance of this I'm not going to mention to prevent dragging in a flamewar. But the instance here... we broke up a telephone monopoly, yet appear to have not in any way constricted either its horizontal or vertical monopoly power. SBC retains a monopoly in all the areas it does business in and has done so unbroken since the Ma Bell breakup-- Birch is nothing-- and now it's rejoining after a short break with Ma Bell. We do have successful competing long distance providers now but this may not last too much longer in Texas. Surely this breakup could have been done in a more intelligent way?

Uh... dude

[Anonymous Coward]

Welcome to 1996

In February 1996, the soon-to-be-spun-off systems and technology unit of AT&T [includes Bell Labs] renamed itself Lucent Technologies and launched its separation with an initial public offering of stock issued in April 1996. The spin-off was completed in September 1996 when AT&T distributed its shares of Lucent to AT&T shareholders.

too many acronyms!

[Karma Sucks]

Would it kill the submitter to explain what SBC, AT&T and MSNBC *mean*?

So many technical terms so little time...

Re:too many acronyms!

[nmb3000]

Would it kill the submitter to explain what SBC, AT&T and MSNBC *mean*?

SBC: Some Bastard Child of
AT&T: A former Totalitarian Telephone company which
MSNBC: May eventually Sire New Bastard Children.

It's all about that circle of life crap. You know, like the way black widow babies eat their mothers. The corporate paradigm in a nutshell!

As a former Sprint Employee

[malus]

I can say that SBC is completely out of their minds for buying AT&T, a company which has been losing money, in the billions, for years. ... Perhaps SBC has a way to turn this around? I don't know, but I don't think so. I think the stock holders are going to be in for a rude, rude surprise.

As for Sprint? Hah. I would say in 6 to 8 months, you'll see Verizon buying them, assuming the Nextel deal goes through. If it doesn't? Sprint'll abandon it's wireline divisions, hurrah, and sell to the Germans.

Please.

[mcc]

I am tired of my internet access options coming down to "would you rather pay money to the local cable monopoly? or the local dsl monopoly?". I exclusively use a cell phone and I don't watch television. I don't particularly want to do business with either of these companies. If there were some third way to get Internet, I wouldn't have to.

P2P wireless isn't terribly realistic given the scaling issues involved, I don't think, but I would LOVE a commercial WiMax provider if it became a viable option.

Wait A Minute!

[vjmurphy]

I thought the mother was supposed to eat its young, not vice-versa!

WTF is SBC Thinking & Any Linux Impact?

[vinn]

Having worked in the telco industry for about 4.5 years, I can attest that every dealing I've had with AT&T is truly an awful experience. Whereas SBC seems pretty decent. Having read about SBC's business practices, they seem smarter than this. Is this the inverse of the Qwest/USWest merger? (Another truly awful deal that I imagine Qwest regrets). Here we have the baby Bell buying the long haul carrier. Now, in this case I think it will work better than Qwest/USWest because SBC won't be inheriting a local loop cable plant. Now, everyone start counting how many times they hear the phrase, "consumers will benefit because.."

(..because we'll give the megacorporation more cash to brainwash us with.)

Anyway, what I was really wondering is what impact, if any, this might have on Linux. If I recall correctly, SBC has used Linux heavily for multiple installations. And I heard AT&T is known for having a pretty strong Unix heritage too as well as being known for developing some hardware that uses it. I wonder if there's a chance we'll see anything benefit Linux. Anyone know if SBC has ever released stuff back to the community?

Oh, and congratulations to all the workers who got to read on Slashdot about the new company they'll end up working for.

Indeed. Sure helps for cell phones.

[TheLittleJetson]

I sure like being able to use my Cingular phone on AT&T networks. It's like, all the sudden, my phone doesn't suck anymore!

The 1984 Telephone Companies-- Where They Are Now

[SEE]

With the breakup of AT&T in 1984, the telephone market largely looked like the following:

Long Distance:
AT&T
MCI
Sprint
Qwest

Local Telephone:
Nynex (Baby Bell)
Bell Atlantic (Baby Bell)
BellSouth (Baby Bell)
Ameritech (Baby Bell)
Southwestern Bell (Baby Bell)
U.S. West (Baby Bell)
Pacbell (Baby Bell)
GTE (independent local carrier)

I mean, there were other minor players, but those were the biggies.

Today, if this merger goes through, these players are now parts of:

SBC (AT&T, Southwestern Bell, Pacbell, and Ameritech)
Verizon (Nynex, Bell Atlantic, and GTE)
Qwest (Qwest, U.S. West)
WorldCom (MCI)
Sprint (Sprint)
BellSouth (BellSouth)