Verizon To Acquire MCI For $6.7 Billion

An anonymous reader submits "Even after a last minute offer from Qwest Communications, MCI board members accepted a less lucrative offer from Verizon to be bought for $6.7 billion in cash, stock and dividends. The acquisition comes after Nextel Communications and Sprint Corp. partnered up in a $35 billion deal and SBC Communications Inc. and AT&T Corp. announced a $16 billion merger plan. So, what's next for the telecom industry?"

Comments

Merger Madness

[dsginter]

Sprint to aquire Nextel, SBC to Aquire AT&T, Verizon to aquire MCI.

Take a freakin' breather already. All in the name of screwing the consumer over, I'd bet.

Re:Merger Madness

[Austin Milbarge]

and half of these companies' products still don't work 50% of the time. I call this the "Gates Epidemic"; Companies that make fortunes off of products that only have to work sometimes.

Re:Merger Madness

[SelectionShort]

Next up is SBCATTMCISprintelizon!! Then Microsoft Buys that. and calls it Microsoft. Duh. Willy G

Re:Merger Madness

[Anonymous Coward]

All in the name of screwing the consumer over, I'd bet.

Welcome to America!

Re:Merger Madness

[lucabrasi999]

I call this the "Gates Epidemic"; Companies that make fortunes off of products that only have to work sometimes.

Geez, must we always bash Micro$oft? Oh, wait, this is Slashdot. Nevermind.

Re:Merger Madness

[Anonymous Coward]

Believe it or not, these deals don't go down just to screw the consumer over. They go down to make the shareholders money. The consumers get screwed as a byproduct. But don't be deluded in thinking that these execs sit around all day thinking who they can acquire to screw the consumer.

Re:Merger Madness

[cyngus]

Take a freakin' breather already.

It's called capitalism, and there's no time for that. Say what you will about capitalism, but it is almost the sole reason that the standard of living has risen so much in many countries over the last three centuries or so. This wave on consolidation has long been predicted, and its probably a good thing. Otherwise the telecom industry would end up fragmented and mostly bankrupty, much like today's airline industry.

All in the name of screwing the consumer over, I'd bet.

All in the name of surviving is more like it. These acquisitions should produce one or more of two things.
1) Lower costs for the companies involved, resulting in higher profits and better returns for the companies owners (largely public shareholders).
2) Lower costs or better services for their customers.
It is likely to be a combination of the two. This assumes, of course, that Verizon does the merger well, and that they did their due diligence to make sure this was a good idea in the first place. At the end of the day, remember that you can choose not to be a customer of any company, except, perhaps, those that are monopolies.

Re:Merger Madness

[krgallagher]

"All in the name of screwing the consumer over, I'd bet."

Actually it is more likely in the name of reducing staffing. When I used to work for a telco I remember complaints about cutomers that we would like to give to our competition. At three cents a minute, people who do not make many long distance calls are actually a losing proposition for carriers. It costs more to send them a bill than they make off the account.

Re:Merger Madness

[skubeedooo]

Not necessarily. Often the shareholders don't like the idea and the shareprice drops - especially for the acquirer.

Sometimes it _is_ due to the CEO or board wanting to expand their empire.

Re:Merger Madness

[Anonymous Coward]

It's called capitalism, and there's no time for that. Say what you will about capitalism, but it is almost the sole reason that the standard of living has risen so much in many countries over the last three centuries or so.

A rise standard of living always comes with a price. And that price makes it not worth it. What good is standard of living when we are just a bunch of money-grubbing product-buyers who are empty inside?

You can chase the dollar all you want, but it'll get you nowhere.

Re:Merger Madness

[nightsweat]

Of course, there's that little thing called the Industrial Revolution that also helped...

Re:Merger Madness

[diamondsw]

Yes, M&A worked out so very well for HP/Compaq and AOL/Time Warner. We've certainly seen increased value and efficiency there.

Given MCI's state, I'll agree this is probably a good thing, but please remember that unfettered capitalism is also the source of a lot of evil. Capitalism is ultimately powered by greed (of one form or another), which has led to labor abuses, environmental destruction, and wholesale fraud as we've seen in the last few years.

Capitalism works best because it seems to work with the inherent human drive to succeed and improve (whereas while Communism is a wonderful theory, it does not appear to match basic human impulses). Just like the human nature that drives it, capitalism can have a very dark side that should not be ignored just because of its successes.

Re:Merger Madness

[AndroidCat]

Otherwise the telecom industry would end up fragmented and mostly bankrupty, much like today's airline industry.

One of the reasons that MCI/Worldcom ended up mostly bankrupt was the wave of aquisitions that they indulged in. They'd use the paper value of each aquisition to buy the next one. (With a little criminal accounting along the way.) The savings by operating in volume never materialized and they chopped technical staff to the bone, affecting service.

Re:Merger Madness

[Anonymous Coward]

Say what you will about capitalism, but it is almost the sole reason that the standard of living has risen so much in many countries over the last three centuries or so.

OK. I'd say this:

Capitalism is not the sole reason that the standard of living has risen so much in many countries over the last three centuries or so.

You say I haven't justified my statement? Why bother? You haven't justified yours. You have the burden of proof. You have failed to meet it.

Re:Merger Madness

[maverick41]

I liked MCI Long Distance so much, I bought the company!!

Re:Merger Madness

[cyngus]

The Industrial Revolution and modern capitalism are intimately related. Without a more or less capitalist system the Industrial Revolution would not have happened or at the very least its effects would have been far less profound. Without the Industrial Revolution capitalism's power would not have been fulled revealed. Capitalism is ideally suited to mass production and industries that require large initial investment such as those that require factories.

Re:Merger Madness

[cyngus]

One of the reasons that MCI/Worldcom ended up mostly bankrupt was the wave of aquisitions that they indulged in.

Its a fair amount more complex than that. I would say that poor judgement in making the acquisitions, not the act of acquiring itself, was the problem. Further the pace of acquisition was too fast for one company. Finally, partially because of the previous reason, adequate integration of the acquired assets didn't happen, resulting in cost savings not being realized. The consolidation we're looking at now is going industry wide, not just at a company or two and I think is proceeding at a reasonable pace.

Re:Merger Madness

[AviLazar]

With the exception of not liking a particular feature, a phone feeling flimsy (StarTac) and a phone having a crippled feature (v710 bluetooth) I have never had a phone work only half the time, or 75%, or even only 90% of the time. All of my phones, and I have had a phone since 1995, have worked 95% or better...since 2000 I can say they have worked 99% of the time. Downtime only being if I 1)lose battary power (my fault), 2) have the phone lost/stolen 3) go into a dead zone(rare but it happens).

So you have had some pretty bad luck or you are just trying to make a point without being valid...can you back your case up with some studies?

I have typically had the Nokia brand phones (about 5), Star Tac, Sony Ericcson T616, and the Moto V710.

Re:Merger Madness

[M_Hulot]

It's called capitalism, and there's no time for that. This wave on consolidation has long been predicted, and its probably a good thing. In economics, as in most everything, we need to look at the evidence before having opinions. Time and time again economic studies show that mergers help neither the customers or the shareholders. http://www.globalchange.com/mergers.htm

Re:Merger Madness

[AmberBlackCat]

This could be a good thing for some people. If all the companies keep gobbling each other up and finally Sprint is the only remaining company, my free PCS to PCS calling will result in me being able to call anybody and never run out of anytime minutes again.

Re:Merger Madness

[Moofie]

Is it Microsoft bashing to make an observation about how Microsoft does business? Are there Microsoft software programs that work All The Time?

Re:Merger Madness

[Grishnakh]

All in the name of surviving is more like it. These acquisitions should produce one or more of two things.
1) Lower costs for the companies involved, resulting in higher profits and better returns for the companies owners (largely public shareholders).
2) Lower costs or better services for their customers.

This sounds great in theory, but I for one have never seen it in practice. How's HP/Compaq doing these days?

This wave on consolidation has long been predicted, and its probably a good thing. Otherwise the telecom industry would end up fragmented and mostly bankrupty, much like today's airline industry.

What's wrong with bankruptcy? If crappy companies like MCI can't hack it, let them go under. Their investors will be screwed, but that's their problem. They should have invested in a better company. Meanwhile, their superior competition can carry on, unburdended by MCI's debts, and take over the market.

Yes, a lot of airlines seem to be having problems these days. There's nothing wrong with that; the crappy ones, like United, deserve to go under. The good ones like Southwest can take over their customers (and buy out their planes at firesale prices).

From my POV, no one gains anything from a merger, except the investors and executives of the crappier of the two companies. We'd all be better off if they weren't allowed to merge, and the crappier company just died. The employees will get new jobs when the competitors gain marketshare and expand. The assets will be liquidated and be reused elsewhere (many times by the competitors). The executives will be out of a job, as they should be considering their poor performance, and the investors will have lost all their investments, which they deserve for poorly investing.

Re:Merger Madness

[Anonymous Coward]

Lower costs or better services for their customers

Apparently, you don't understand capitalism as much as you claim to. The concept of the "invisible hand" rests upon the existence of open competition. As cartel members start acquiring one another, this open competition vanishes, and the result is a controlled market (That is to say, lower quality and higher prices to consumers).

But don't take my word for it, listen to the founder of American capitalism, Adam Smith

Re:Merger Madness

[Anonymous Coward]

Yup... right... sure... but umm... why do Americans work more for less? Capitalism! Woo-freaking-hoo.

The best way capitalism works is if your on the "other end"

Re: Merger Madness

[PacketScan]

2) lower costs and better service? ARE YOU CRAZY , this is always promised yet never delivered. Then they blame inflation becuase the customer is not seeing the savings..
It's Bullcocky

Re:Merger Madness

[lgw]

You have to agree that the AOL/Time merger worked out splendidly for AOL. But boom-time mergers are much different that bust-time mergers.

For a given industry, the peak of the boom times will leave too many competitors for the survivors of the bust to make a profit. There has always been consolidation down to 2-3 players after the bust, just to get enough pricing power for the industry to rebuild itself. This is a good process, as it weeds out some of the most screwed up companies (not that totally screwed up companies don't survive, but the odds improve). This consolidation is both necessary and inevitable: the herd must be culled.

Re:Merger Madness

[Anonymous Coward]

Your lower costs/consumer benfit arguement is meaninless. I guess you are getting 8% interest on your savings account if you were an American Bank customer. American bank merged with Meridian, that merged with Core States, that merged with First Union, that merged with Wachovia. We can all see in our bank statements how all of those mergers reduced costs and significantly increased our returns.

The only thing that all of those mergers did was make the owners richer and reduced competition. You won't see $20 DSL accounts from Verizon after this merger either, even after the "lower costs."

Re:Merger Madness

[lgw]

The acquiring company gets customers, which is often the only purpose. The most painful way in which mergers fail is when the customers can't be converted to the acquirer's billing system (not to mention the most embarassing way). This happens far more often than you'd figure.

Tech company mergers are different than mature company mergers. For mature companies, don't underestimate the value of an established brand with an established customer base who would have to make an effort to change. Much easier than letting the failing company go under and then hoping to compete for those customers. Did you know most people either use the same brand of soap their entire lives, or switch only when they get married?

Re:Merger Madness

[Grishnakh]

Tech company mergers are different than mature company mergers. For mature companies, don't underestimate the value of an established brand with an established customer base who would have to make an effort to change.

But how many people are really loyal to MCI? Before cellphones became popular, I remember people changing LD carriers as soon as someone offered them a better deal, free service, etc. And after the accounting scandal, MCI doesn't seem like its name has much prestige left.

What about Compaq/HP? How many people really wanted to be Compaq customers? That seemed like a rather valueless brand.

Did you know most people either use the same brand of soap their entire lives, or switch only when they get married?

I've never heard that, but with all the designed soaps out there now, I wonder if it's still true. Personally, I buy whatever's cheapest. How hard is it to make soap?

Re:Merger Madness

[RzUpAnmsCwrds]

"This sounds great in theory, but I for one have never seen it in practice. How's HP/Compaq doing these days?"

Actually, quite well. Neither HP nor Compaq could really offer competition to Dell, but the "new" HP is now the #1/#2 computer manufactuer in the world. They are profitable and are turning out good revenue.

"If crappy companies like MCI can't hack it, let them go under."

Just because MCI can't hack it doesn't mean that they don't have ASSETS. That's the point of buying a company - Verizon gets MCI's extensive data network, their qualified network staff, their equipment.

"What's wrong with bankruptcy?"

Nothing, except that often the company is valuable enough to be purchased. Take Iridium, for example - even though they went under, the 70+ satellites they had launched had tremendous value.

"Yes, a lot of airlines seem to be having problems these days. There's nothing wrong with that; the crappy ones, like United, deserve to go under."

United has an entire fleet of aircraft, trained mechanics, trained pilots, flight attendents, airport space.

Repeat after me: ASSETS.

Those assets have value. It would be foolish to simply auction them off. It's far smarter for United to be purchased by a company that can manage those assets properly.

"no one gains anything from a merger"

Except the people who work for that company and the people who use that company's resources. When the alternative is shutting down for good and liquidating the assets, a merger is an excellent way to help the company stay afloat.

Small Business Example:

I run Bob's Mexican. We have a trianed staff and make the best tacos in town. Joe runs Joe's Mexican. He has the best burritos in town.

Joe's Mexican can't stay afloat. So, I buy his business and turn it into a 2nd Bob's Mexican location. Joe becomes manager of the 2nd Bob's Mexican. We get his burrito recipie, his location, and his staff -- trained and ready to go.

It's called "synergy" - the whole system can operate better than the sum of the parts. It's not just a BS marketing term, you know. It's what happens during mergers.

HP didn't have an attractive server line. Compaq didn't have an attractive workstation line.

Together, they have incorporated the best of both of their products to create some really compelling products.

Look at the HP XW4200 - it's a really well engineered, affordable, high performance workstation. Neither HP nor Compaq had a product like that pre-merger.

80 billion in revenue and 20 billion in profit isn't exactly "hurting".

Re:Merger Madness

[packeteer]

My phone (Cerizon VX6000) almost never works for me. Thats becuase service is very spotty where I live. You would think the answer would be "move to a city" well i already did. I live a mile away from downtown seattle. I live in an denseley populated neighborhood in seattle with no service through verizon. None of my neighbors have it either. I can only imagine what its like to live far away from a city where a company has no incentive to put up towers. As for me if i want to make a call i have to do it when im in downtown, there is only enough signal to send a txt msg before the line cuts out.

Re:Merger Madness

[timeOday]

These acquisitions should produce one or more of two things.

1) Lower costs for the companies involved, resulting in higher profits and better returns for the companies owners (largely public shareholders).

2) Lower costs or better services for their customers.

It is likely to be a combination of the two.

Whatever. They say exactly the same thing when splitting off divisions into separate companies (the opposite of a merger), so who knows.

Re:Merger Madness

[Grishnakh]

Ok, so is there a difference between a "merger" and a "buyout"? What if the company that sucks has lots of assets you want, but their management sucks and you want to toss them out on their asses? Just because United has some nice planes and the infrastructure to go along doesn't mean you want you want the idiots in management who got that company into its present shape, or that you want all the other stuff: their scheduling system, etc.

Small Business Example:

I run Bob's Mexican. We have a trianed staff and make the best tacos in town. Joe runs Joe's Mexican. He has the best burritos in town.

Joe's Mexican can't stay afloat. So, I buy his business and turn it into a 2nd Bob's Mexican location. Joe becomes manager of the 2nd Bob's Mexican. We get his burrito recipie, his location, and his staff -- trained and ready to go.

The problem with this is that if Joe's Mexican couldn't stay afloat when Joe was running it, why would Bob want Joe to continue as a manager? Joe is obviously incompetent, and keeping him around in a high position is going to jeopardize Bob's business.

I agree that all these businesses definitely have assets that are very valuable. But it seems to me that, in merging with them, that the stronger companies are taking on whatever diseased elements that caused the companies to have problems in the first place.

Re:Merger Madness

[Anonymous Coward]

apparently, you should have returned the phone after the 30-day trial if it was so useless, no?

Re:Merger Madness

[Doc Ruby]

The annexation of half the world, the Americas, by Europeans, was a pretty big factor. That it was already highly (supremely) productive in the agricultural economy of the times was a huge windfall that we've been spending our way through for centuries since.

Re:Merger Madness

[xCepheus]

I think the important question is...

Can you reach out and touch me now?

Re:Merger Madness

[RzUpAnmsCwrds]

"Joe is obviously incompetent, and keeping him around in a high position is going to jeopardize Bob's business."

Not necessarily. The fact that Joe's business isn't competitive doesn't necessarily mean that Joe isn't a capable manager. Other issues may have plagued the location.

A more likely example would be a major chain purchasing a local business and converting it ton one of their stores.

"Ok, so is there a difference between a "merger" and a "buyout"? "

It's a fine line.

"doesn't mean you want you want the idiots in management who got that company into its present shape"

In many mergers, the management of one company is indeed fired or reassigned to a different role.

That's the idea of a merger: you don't necessarily want *everything* that the other company has, just the good stuff. In the HP/Compaq example, the new company dropped a lot of products - HP's crappy desktop PCs went away, as did their servers (also bad), handhelds (arguably bad), and a number of other things.

In the case of Verizon, Verizon will drop MCI and/or Verizon systems, choosing the best. If American Airlines, for example, were to purchase United, you can bet that one of their two booking systems would be dropped, and that a big part of American's fleet would be retired (AA operates a lot of old MD-80 planes).

The point is this: it's not necessarily either company's fault that they are not profitable. It may be that there are simply too many players in the market. If two players are driving each other out of business, or if they have lost their competitive edge, it may make sense for them to pool their resources and see if they can stay afloat.

There's also a more buyout-like situation, like with MCI. One company that is doing well decides to buy a company that is not doing well. In Verizon's case, they are buying a huge data network along with the skills and equipment to maintain that network. Not a bad proposition for $6.6 billion.

Re:Merger Madness

[Anonymous Coward]

Blame AT&T for abusing their monopoly during the mid-late 20th century, thus attracting the attention of the federal government, causing AT&T to be broken up.

This means one less company I hate being around. I hate MCI, and I hate Verizon. Now I can focus my hatred more easily. Go Verizon!

Re:Merger Madness

[Anonymous Coward]

Boy. I sure hope in this Capatalistic expanse I'm not one of the 7,000 laid off.

What will probably happen is that they will lay off people and then throw a hiring freeze on my group/department and we will be stuck at our head count. I won't be able to transfer to another group because my manager would list me as a critical resource. So every other week I get to go on call... working more overtime (for free) so they can make more $$$.

Sure I'll look for another job, but that will take about 2 years. Unless I want to take a serious pay cut.

Re:Merger Madness

[r0m3416]

A big fish devours a small fish only to be devoured by even bigger fish. It's all in game. ..Raja

Re:Merger Madness

[Anonymous Coward]

Yup... right... sure... but umm... why do Americans work more for less? Capitalism! Woo-freaking-hoo.

WRONG! The reason why Americans work more for less is because of of the unconstitutional programs that give handouts to the Worthless.

The constitution is about freedom, and the only way that one can truly be free is with pure Laissez-faire capitalism, which is a form of survival of the fittest. No one is free with the "survival of the worthless" socialism. Benjamin Franklin, one of our founding fathers once said, "He who is willing to give up a little liberty for the promise of security deserves neither Liberty nor Security." Which includes the unconstitutional USA PATRIOT Act and ALL social programs, including public education.

Are you afraid of being one of those that are worthless?

Re:Merger Madness

[packeteer]

30 day trial? First of all i got no 30 day trial. Instead I payed a deposit that would not be returned if i cancled my account before 24 months was over. I originally lived in a good service area but moved into this black hole of service.

Re:Merger Madness

[AviLazar]

wow i never heard of that policy before. I have heard, plenty of times (and as selling tactics), the policy of a 30 day free deactivation period. Since you are buying a product (the phone) you generally have 30 days to return the product if unsatisfied. While this is a state law, most states have adopted it...there might be a few states that got p0wn3d with this. Here is the question - did the sales person tell you about the cancellation fee or was it in official writing from the service provider? Now did you check the local commerce law? They might totally disagree with the contract - and if it's a dummy law that portion of the contract holds zero water.

one company too rule them all

[Anonymous Coward]

and in the darkness connect them

MCI...

[jxyama]

this is the same MCI that used to be "WorldCom" that went bust after accounting frauds, no?

i'm still pissed that corporate frauds go around, change their name, hide their past and go on business as usual...

Re:MCI...

[Quattro Vezina]

Actually, they've been MCI for a long time. They only merged with WorldCom in 1997. They were MCI before that, they were MCI WorldCom from 1997 to 2000, and after the fraud scandal, they became MCI again.

The only time they didn't have MCI in their name was between 2000 and the fraud scandal, which was a pretty short time. So, yeah, they're scum, but they're not really hiding. They're hiding a little, because the scandal is usually associated with WorldCom's name, but if they really wanted to hide their past, they'd come up with a completely new name.

Re:MCI...

[kjj]

You are right, and Verizon will assume something like 4 billion in MCI debt that they are still trying to pay off. Doesn't seem like a smart deal for Verizon.

Re:MCI...

[ugmoe]

http://www.virginiainstitute.org/viewpoint/2003_13 .html

These opponents play to people's sense of outrage at the corporate scandals that rocked the business world last year, as well as to the breathtaking extent of the $11 billion accounting fraud at WorldCom. Their main claim is that allowing MCI to exit bankruptcy would allow it to profit from its "ill-gotten gains." Both justice and deterrence, they argue, require that MCI be dismembered, if not put to death.

Such claims understandably strike an emotional chord with America's scandal-weary public. Yet those claims are wrong all the same. Simply put, MCI retains no "ill-gotten gains" from the accounting fraud. Whatever short-term advantage the company might have gained has already been lost, many times over. In his opinion on the recent litigation between the SEC and MCI, Federal district court judge Jed Rakoff placed the liquidation value of the company at less than $6 billion. This value pales in comparison with the $200 billion by which WorldCom's equity has plunged.

In the overall scheme of things, there can be little doubt but that MCI would be in stronger shape today had the fraud never occurred, than it will be if it is allowed to emerge from bankruptcy.

While MCI's liquidation would be good for its rivals, it would be bad for the consuming public. It would reduce the choices available to many consumers of telecom services, force 20 million MCI customers to find new suppliers, and leave more of the telecom market under the control of the still relatively monopolistic Baby Bell companies. Local phone competition, which has finally started to deliver major savings to consumers in recent years, would take an especially big hit. Also wrong are claims that the liquidation of MCI is a means to secure justice and promote deterrence against such misdeeds in the future. Justice is served by punishing responsible individuals. So is deterrence. Neither is served by wreaking punishment indiscriminately on such innocent people as workers, investors, creditors, and customers.

To penalize an entire corporation for the misdeeds of some of its officials is to spread the resulting loss among all participants in the corporation. If corporate misdeeds are punished at the individual level, deterrence works as it is supposed to work. But if those misdeeds are punished at the corporate level, the deterrence effect is weakened and the injustice compounded.

It would be different if all participants within WorldCom had agreed to engage in fraudulent practice. But this is clearly not what happened. A few crooked executives engaged in fraudulent activity, and the practice was halted and made public when other individuals within the company became aware of it. To punish MCI wholesale would be to punish those innocent individuals and not the guilty wrongdoers.

It is easy to see why the entrenched incumbents are so keen to bring about MCI's demise. The likes of AT&T and the Baby Bells would rather feed on WorldCom's carcass than see it rejuvenated and have to compete with it for business. The public good, however, would be far better served if MCI receives a second chance instead of an early grave

Re:MCI...

[k4_pacific]

Yeah, they made a bad name for themselves, so they changed it.

Re:MCI...

[AFCArchvile]

and the same MCI that is the number 1 spammer according to the Spamhaus charts. Spamhaus also put out this article charging that MCI profits from spam. Verizon's getting all that.

Re:MCI...

[whoever57]

They're hiding a little, because the scandal is usually associated with WorldCom's name,

That's because MCI was effectively taken over by Worldcom. Ebbers was the CEO of Worldcom before the "merger".

Re:MCI...

[oliana]

http://www.sec.gov/spotlight/worldcom.htm

Yeah, after MCI is forced to pay $500M in cash and 10M in stock to investers victims of the fraud, and various people got fired, banned from holding office in any publicliy traded company, fined, sued, and had to "repay" any "ill-gotten gain."

If that's business as usual, I don't want any part of it.

Re:MCI...

[lucabrasi999]

Verizon will assume something like 4 billion in MCI debt that they are still trying to pay off. Doesn't seem like a smart deal for Verizon.

Assuming that much debt is a problem. OTOH, Verizon gains millions (exact number?) of consumer customers and thousands of business customers. It also eliminates a competitor.

All in all, a very smart deal for Verizon. It's just very bad for those of us that live in Verizon's territory. Good thing that I have the choice of different carriers (for now).

Re:MCI...

[iabervon]

You'd rather they evaporated entirely, disabling one of the internet backbones, leaving 75 government agencies and much of the Fortune 1000 without phone and internet service, putting hundreds of thousands of people out of work, and completely destroying the investments of people taken in by the accounting fraud? Maybe the assets and obligations should go to some organization capable of managing them honestly?

This isn't really the same MCI that was involved in accounting fraud, because the individuals involved in the fraud aren't there any more. Even if they were, after being bought by Verizon, they wouldn't be in charge any more. The idea that a corporation is a legal entity with rights and responsibilities is a useful fiction in making the law function at all, but it doesn't actually make sense to talk about "the same MCI" from then to now.

Re:MCI...

[fm6]

Nevertheless, we're talking about the company that bought MCI, not MCI itself. They have the right to call themselve MCI if they choose, but it's also true that this is the company that used be called Worldcom.

Re:MCI...

[vandrad]

They were MCI before that, they were MCI WorldCom from 1997 to 2000, and after the fraud scandal, they became MCI again.

However, it's worth noting that in Internet connectivity terms, the great backbone that the pre-merger MCI built had to be spun off to Cable & Wireless for it to get federal clearance to merge with Worldcom, which had recently gobbled up UUNET.

The general consensus in the ISP biz was that post-merger Worldcom QoS was not as good as old MCI or old UUNET.

Re:MCI...

[TekMonkey]

My Dad started working for MCI in 1986, stayed when Worldcom bought MCI, stayed when Worldcom went down, and still works there today. If he gets layed off because Verizon decides to replace him with some asshat from their own company, I'll be pissed (and you will feel my wrath!).

Re:MCI...

[Bluesy21]

Umm Verizon is/was a Baby Bell company....New York Telephone --> NYNEX --> Bell Atlantic --> Verizon

Re:MCI...

[Anonymous Coward]

Damn, I'd call Verizon and warn them, but I bet I'd just get put on hold ...

Re:MCI...

[Breakfast Pants]

Worldcom bought MCI. They went bankrupt. After they went bankrupt their creditors own everything. So they didn't just "change their name" and get out of it. This is the creditors who got fucked on the original deal, struggling to spin MCI off as a new company and get away from the bad name of Worldcom. When a company goes bankrupt and then comes back, its not under the same ownership. Anyone who had stock in Worldcom when it went bankrupt lost it. It went to 0.

Re:MCI...

[Moofie]

"You'd rather they evaporated entirely, disabling one of the internet backbones, leaving 75 government agencies and much of the Fortune 1000 without phone and internet service, putting hundreds of thousands of people out of work, and completely destroying the investments of people taken in by the accounting fraud?"

Yep.

"Maybe the assets and obligations should go to some organization capable of managing them honestly?"

Oh, right...the HONEST phone company. Which one was that again?

"The idea that a corporation is a legal entity with rights and responsibilities is a useful fiction in making the law function at all, but it doesn't actually make sense to talk about "the same MCI" from then to now."

Brand marketing can be both a positive, and a negative, thing. Hoist by their own petard.

Re:MCI...

[Anonymous Coward]

Umm Verizon is/was a Baby Bell company....New York Telephone --> NYNEX --> Bell Atlantic --> Verizon

No shit, sherlock, that's the point of the article. Let me explain:

The article suggests that MCI as an independent company is a good thing. The article suggests that the baby bells would like to see MCI as an acquisition target to consolidate the industry.

Re:MCI...

[glaqua]

I think you have read this wrong. The telecom industry in very capital intensive (lots of expensive equipment, millions of dollars in cables alone, etc etc). Telecom companies by their very nature have to take on large amounts of debt in order finance all this capital.

so, along comes MCI, emerging from bankruptcy, retaining all the capital/equipment/etc/etc that they need to run a telecom company, but without any of the debt.

Do you think this would allow them to be more competitive in telecom than the companies that are already up to their eyeballs in debt?

Re:MCI...

[Grishnakh]

You'd rather they evaporated entirely, disabling one of the internet backbones, leaving 75 government agencies and much of the Fortune 1000 without phone and internet service, putting hundreds of thousands of people out of work, and completely destroying the investments of people taken in by the accounting fraud?

Don't be silly; no one is going to just leave all these customers and all that infrastructure going to waste. In a bankruptcy proceeding, it's perfectly easy and feasible to sell off whole portions of a business, and competitors are usually eager to buy these things up at such a bargain.

However, the people who invested in MCI should lose all their money. That's the risk you take by investing. If you want a safe investment, keep your money in the bank, buy a CD, buy into a mutual fund, etc. If you buy into a crappy company like MCI or SCO, you deserve to lose your money. This is the only way to get people to be more careful about who they give their money to. Giving people a way out just encourages more bad investing.

Re:MCI...

[Anonymous Coward]

That's business bitch

Re:MCI...

[Anonymous Coward]

MCI Emerged from bancrupty 4/20/04. So this is old news.

Re:MCI...

[waterlogged]

Mod Parent up.

Speaking as one of the old UUnet Regime, things got real bad after Worldbomb came in and screwed everything up. UUnet was the first and best ISP out there and is still refered to fondly by its fallen comrades. Just wondering if there were any other former UUnut's out there haunting this board. Sound OFF.

Re:MCI...

[vandrad]

Digex was also a kickass backbone before being absorbed by Worldcom.

Progress?

[Anonymous Coward]

I think as long as the American political scene remains the way it is, we will see more and more consolidation in telecom companies, as well as other industries. Good or bad, probably bad, but we'll just have to wait and see if anyone can deliver on promises of the teletainment networks of the future

Re:Progress?

[MindStalker]

This happend during the previous administration too. Its really a funny situation where free markets would have worked, if it wasn't for the pesky problem of much of every teclos assests exist because of government grants.

Re:Progress?

[ejdmoo]

It's probably good.

The good part about competition in such an industry is that it lowers prices. Prices on most of their services are basically as uninflated as they get. That said, now we can hope for things like better coverage (from the ATTWS/Cingular merger) or better services from consolidation. Of course these things take time. :-/

Re:Progress?

[Anonymous Coward]

You're a phone company executive, huh?

Whenever there's less competition, the service gets worse. There's no up-side here unless you just made a chunk of the $6 billion or have found a way to use the lack of competition to screw customers out of more than that $6 billion.

"Prices on most of their services are basically as uninflated as they get."

Which is why you have to buy blocks of time instead of just paying for what you use?

Re:Progress?

[lucabrasi999]

Whenever there's less competition, the service gets worse.

Verizon's service could get worse? Is that even possible?

Don't forget Canada too.

[DJStealth]

In Canada we had the following:

Telus purchased Clearnet
Rogers & Shaw swap regions so they each have cable monopoly in their region.
Rogers purchased Fido

Re:Don't forget Canada too.

[Anonymous Coward]

Guess what? Nobody cares.

Re:Don't forget Canada too.

[Anonymous Coward]

Don't you speak french in Canadia?

Re:Don't forget Canada too.

[Anonymous Coward]

Eh?

Who cares.

Re:Don't forget Canada too.

[Anonymous Coward]

Some people do, not everybody is american. By the way, you think that anyone cares that you don't care? (and yes, I know nobody cares that nobody cares that ...)

Re:Don't forget Canada too.

[Nik13]

And Bell bought out a good part of of Aliant telecom (a conglomerate of several telcos in the maritimes). Right after that my long distance plan went down in minutes and up in price, and it was already more expensive than Bell's plans. I guess we know what to expect out of such mergers - it means we're all gonna get VoIP instead :)

Re:Don't forget Canada too.

[myov]

Rogers and Shaw had monopolies before (my cable service is from Rogers no matter what) - Rogers basically controlled Toronto after buying Maclean Hunter (now Rogers Media/Rogers Etobicoke), and the old Graham Cable which was bought by Shaw (and is now the headend for Etobicoke). They swapped to get larger monopolies in Ontario/BC, since they can now set a price for a large chunk of the market.

IIRC, Bell and Telus had non-compete agreements in place (Like Rogers and Shaw, both are the phone monopoly in East-Central/Western Canada). Once Telus bought clearnet, things went out the window.

How long before FIdo is rolled into Rogers wireless? Rogers clients can roam on Fido, Fido clients have the option of Rogers coverage. (both are GSM)

I'm waiting for Bell to buy Shaw. Both Rogers and Bell seem to respond to each other (I'm sure buying Skydome was a response to the Bell center, both bought sports teams, tv stations, one changes internet limits, the other responds, etc). Rogers has wanted to get into phone service for years (VOIP will make it possible). Although Bell has expressvu and TV stations, Shaw has cable and radio stations (Corus, to match Rogers Broadcasting).

I know what's next...

[coolfrood]

... there won't ever be a monopolistic telecom company. There's no precedent for that.. oh wait, nevermind.

The second time around

[The Bungi]

Because the first one would have been a bit difficult given the way the books were being cooked at the time (of course MCI was called "WorldCom" back then, but hey, change thy name and stay shiny).

Interesting.

MCI common speaches

[Anonymous Coward]

> MCI USA direct. This is Mary speakin' to ya, how can I help ya ?

> MCI Steven, how can I help ya ?

> MCI we appreciate your business

Murders and Executions

[whackco]

I wonder who will benfit from this deal?

Somehow I doubt it will be the employee's...

[INSERT FUD]
The EMPLOYEES will collect the most benifits as in Unemployment...
on a less troll note, doesn't the FCC have to sanction these murders..ur... mergers? I wonder if they will allow all these to go through...

Re:Murders and Executions

[Anonymous Coward]

Uh, and why should a bunch of redundant employees benefit?

My hope would be that the consumer benefit; but I'm not holding my breaadth there either.

At least the employees could do something about it. If the employees don't like the deal, they're free to start their own telecom and compete with their former masters. If enough of them do it, and have a compelling story for their business plan why they could do better; it shouldn't be too hard to get the funding.

Or, if the better employees (those who wouldn't be layed off) felt altruistic, they could form a union and demand mucho benefits for the guys losing their jobs like the railroad workers did for the guys who used to sit in the back of the train when that job became obsolete.

What's next...

[1000101]

"So, what's next for the telecom industry?"

More crappy support and dropped calls?

Re:What's next...

[dcclark]

My parents live in a VERY rural area. The phone lines leading down the road and into their house are likely the first lines ever there. They are tremendously bad quality, both for voice and internet access. Repeated calls to the phone company have done nothing.

So, my question is, after all these mergers and changes and "improvements" ... will my parents be able to connect via dialup at speeds better than 24k? Will they be able to call people without ridiculous amounts of static? Might their cell phones actually have service in more than half the state? In other words, will they see any real benefit?

I'm not holding my breath.

Re:What's next...

[Anonymous Coward]

Verizon (in my area) has always provided top-notch service for my friends and I and their customer support has always proved useful in the end. My friends who use other carriers, Nextel, ATT Wireless, and Cingular, Always complain about bad billing, bad support, dropped calls and the like. Now Ill admit i do live in a rather populated area (Between Cleveland and Akron OH) and not Billy Bob's Mountain, NC but to each his own i guess.

Re:What's next...

[DAldredge]

Yes, they will get to pay more for the same level of service. If you parents have trouble doing this then they are commies who hate free enterprise and should more to Cuba. :)

Re:What's next...

[lateralus_1024]

More crappy support and dropped calls?
...plus increasing inexplainable taxes/fees/surcharges and 13-page statements.

I'll tell you what's next

[alexwcovington]

The hot new board game from Parker Brothers hits the shelves: Telecom MONOPOLY

Re:I'll tell you what's next

[EnronHaliburton2004]

The hot new board game from Parker Brothers hits the shelves: Telecom MONOPOLY

You'll receive a copy of the game next month, with a mandated $5.99 monthly fee. To opt-out, please send a written letter stating your request. We will handle your request in 60-90 days.

Re:I'll tell you what's next

[19thNervousBreakdown]

Fun for all ages, up to 1 player!

Re:I'll tell you what's next

[Anonymous Coward]

Don't be rediculous. The monthly fee is only $1.99. The other $10 a month is all surcharges and taxes that we have no control over.

Great

[Anonymous Coward]

* SBC owns AT&T
* Verizon owns MCI

After the baby bells were broken up, we had this very nice period where briefly, though you may not have had a choice of local phone providers, you had a real and serious choice of long-distance phone providers. Anyone else suspect this era is about to end? I think we're about to quickly go to the point where your regional local-phone monopoly quickly becomes a regional long-distance phone monopoly.

Who wants to take bets on how many SBC customers will be using MCI in five years, or how many Verizon customers will be using AT&T?

Re:Great

[Anonymous Coward]

As the previous (ugly) post said, what about Skype? And as long as there's a cell carrier choice, there's a long distance choice.

Re:Great

[spotteddog]

I'm currently in a Verizon service area. I have AT&T for local and long distance. I dropped Verizon when they couldn't get my phone working after almost a month of trying after I moved in. Verizon's customer service SUCKS.

The transfer to AT&T was painless. I know, Verizon owns the lines from the CO to my house. They seem to respond better to AT&T than me.

If I can't choose my wired phone service providers because there is only one left, I'll drop the wired phone completely.

Re:Great

[cyberformer]

Who wants to take bets on how many SBC customers will be using MCI in five years, or how many Verizon customers will be using AT&T?

At the rate we're going, all of them, because Verizon will also have taken over SBC (or vice-versa).

Re:Great

[Anonymous Coward]

Actually it's the voip providers that will eat their lunch, the telco's only solution:
- follow them with all you can eat low cost voip services
- lobby their local politicians to protect their turf

I bet they will go with option 2 first but will eventually have to compete like everyone else. And we all win.

But before someone else once again says it's the beauty of the capitalist system, i call bull.

The only reason we have this today is because of the internet and tcp/ip technology being public domain. This is the true engine of innovation here, and let's not forget it came straight out of government labs not some big co r&d dept.

Just my 2cents...

Re:Great

[HarvardAce]

I think we're about to quickly go to the point where your regional local-phone monopoly quickly becomes a regional long-distance phone monopoly.

Or you could do like I (and many others) do, and simply cancel the local land line. It was a psycological hurdle to overcome, as it can be a bit scary that you no longer have a "home phone."

However, it got to the point where all the outgoing calls we were making were "long distance" (because of cell phones with numbers from college area codes), and to do that we would all use our cell phones since we had long distance included in our cell plans. We couldn't justify the $30+ a month we were getting charged for only getting incoming calls and making the occasional local call to Domino's or the Chinese place down the street.

We've been land-line-less for 3 months now and I haven't missed it a bit...and now we no longer get telemarketers calling us as an added bonus.

Re:Great

[e1618978]

Submit a complaint with the FCC, and also with your state public service regulatory agency.

You will have the highest level of customer service after that kissing your butt trying to make everything right. I have done this 3 or 4 times myself, and anytime one of my friends has a problem they do it too - it always works, and works quickly. www.fcc.gov

Re:Great

[Brandybuck]

Blame it all on local governments insisting on local monopolies. It doesn't matter how liberal, conservative, progressive, socialist or libertarian the national government is, because all local governments are filled with petty tyrants.

What's next?

[Telastyn]

Crap.

Followed by the big names getting into IP telephony, and promptly turning that into crap.

Re:What's next?

[Raypeso]

ha ha! If I had mod points, I'd give them to you!

Re:What's next?

[Jedi Holocron]

Welcome to Planet Disney and thank you for dinning at Planet Holywood...

Re:what's next?

[Anonymous Coward]

Lucrative is in the eye of the beholder. I assume that the board felt that there were fiscal advantages to the offer.

Re:What's next?

[zvoid]

Or maybe just one company period.

It will be known as "Wal-Mart".

Re:What's next?

[jpmoney]

I can see it now:

"This call has been brought to you by *sponsor*. Enjoy *spondor*'s *product* today! Now back to your phone call"

*Ring*

"Hello..."

*Static*

NO_CARRIER

Re:What's next?

[jj_johny]

Cable is governed by franchises given out by the different governments. Each city, county gives out the franchise so that they can do their oversight duties. (And they can force a company to cover the complete area not just the lucrative parts of a jurisdiction. This is all do to the large cost of the infrastructure to wire every neighborhood. There will only be two company's competing - one "telephone" company and one "cable" company. And of course, you may also have other providers like satellite, cell phone for various services.

So in the end you will have two companies that are governed by various regulations not unwritten anything. Put your conspiracy away and use it for your political discussions.

Re:What's next?

[phutureboy]

After two more rounds of mergers, we'll have two companies left in each area. Each with strict but unwritten agreements not to compete in each others' areas. It's the same way Comcast/Time Warner do business in the Cable TV industry right now, anyways.

The cable TV industry is the way it is because it's illegal for two companies to operate in the same geographic area. Each cable operator is granted a "franchise" by the local government, allowing it to be the sole cable provider in that area.

Re:What's Next?

[SEE]

Four RBOCs left, actually. BellSouth, SBC, Verizon, and Qwest.

Perhaps the most logical combo left is Qwest, BellSouth, and Sprint. That would have local coverage in the West and Southeast, with long distance and nationwide cell coverage; it would also be a lot more acceptable to regulators than a purchase of any of the components by SBC or Verizon.

Frightening

[KinkifyTheNation]

I grew up as a child seeing AT&T and MCI all over the place, I always thought they were just the only two telecom companies. It's almost heartbreaking to see all these childhood symbols and companies being sold off or destroyed, even if they really didn't have much impact on my life otherwise.

Re:Frightening

[Anonymous Coward]

I assume you're being sarcastic and very funny. It sounds a bit like blacks in the south missing the old slavery system going away.

The only thing I find frightening in your post is that you thought there were only 2 telecom companies. That would indeed be an oppressive world to live in.

Re:Frightening

[Anonymous Coward]

it's sad that "childhood symbols" are drummed into your head by large oligopolous companies. I hate to think for how many kids M$ is a "childhood symbol"

Re:Frightening

[Jpunkroman]

I agree, how can there be no more telemarketer calls (and even further no more parodies of) "Hi, would you like to change your long distance service to MCI?"

Re:Frightening

[Unkle]

That's kinda what I've been thinking, with the addition of Sprint (who is the only one still going strong--they acquired Nextel, not the other way around, IIRC).

Next thing you know, some little upstart company that wasn't around 20 years ago is going to buy IBM.

Re:Frightening

[KinkifyTheNation]

This was back when I still believed in Santa Clause, so I wasn't exactly concerned about what kind of long distance plan I had.

Better Verizon than Qwest....

[Qwijib0]

From what I've seen out of qwest here in the west, verizon is a better company. Lesser of two evils I suppose.

Re:Better Verizon than Qwest....

[Anonymous Coward]

From what I've seen out of qeast here in the east, verizon is a better company. Lesser of two evils I suppose.

In other news...

[chipster]

"Cingular, Verizon, and Qwest merge...It's Ma Bell all over again"

Re:In other news...

[Waffle Iron]

Cingular, Verizon, and Qwest merge

The three were about to merge, but their plans were thwarted when it was discovered that the world's supply of stupid committee-selected synthetic corporate names has finally been exhausted, so there would be no way to refer to the new conglomerate.

Re:In other news...

[Anonymous Coward]

Cingular, Verizon, and Qwest merge

They could call it QVC!

Re:In other news...

[j1bb3rj4bb3r]

Bah... the name is QwiVeringLargesse.

Re:In other news...

[Anonymous Coward]

Ah hell, have QVC buy them all and be done with it.

The cycle will be complete

[Anonymous Coward]

All the Baby Bells will reunite in another monstrous single entity, that will become so bad thet the government would have to intervene and break it up again.
Unless the new MamaBell will take over the government faster ....

Spam...

[Anonymous Coward]

Let's just hope Verizon can clean up MCI's abuse department. Right now MCI is one of the world's worst when it comes to host spammed domains.

Pink contracts, greedy salesmen and general turn-a-blind-eye abound over there...

What's next?

[Moryath]

After two more rounds of mergers, we'll have two companies left in each area. Each with strict but unwritten agreements not to compete in each others' areas. It's the same way Comcast/Time Warner do business in the Cable TV industry right now, anyways.

I predict

[beegle]

...that eventually, all of the US telecom companies will merge back into one. That single, surviving company will be known as "The Bell System" or, colloquially as "Ma Bell".

You heard it here first.

Question

[KoriaDesevis]

Verizon is what used to be GTE and Bell Atlantic. With MCI in the fold, does this allow them to be a national phone company that can be a local carrier coast to coast, like Bell used to be in the 70's? I am suspecting not, but it's worth asking.

I know MCI is not a local phone company (at least they weren't when I had them as my long distance carrier), but that would make Verizon huge (even more so than they are now).

Re:Question

[Tenebrious1]

I know MCI is not a local phone company (at least they weren't when I had them as my long distance carrier), but that would make Verizon huge (even more so than they are now).

MCI is more than just a "phone" company... they own a major chunk of the internet backbone. Nobody pays $6.7B for a midsized phone company. I wonder if Verizon really cares about the long distance phone company aspect? What they are after are the massive pipes over which they can now send data at less cost, and now charge others to do the same.

Re:Question

[DaFork]

Verizon has a wireless and local.
MCI has long distance and business data (T1, OC3's, DSL, POPs).

MCI has local service now (The Neighborhood) that is implemented by leasing the local lines from the local carriers (like Verizon and SBC). The line costs are becoming very expensive (partially due to expiring regulation that limits the wholesale prices of these lines). It was already predicted that companies like MCI that lease local lines to provide a "choice" in local service will be forced to abandon it due to rising costs.

This merger does not affect Verizon's local markets (MCI has either none or very few). What it does do is allow Verizon to package plans that include local, long distance, and wireless to consumers. This merger also allows Verizon's small business and corporate customers to package MCI's data services like Internet access, managed WAN/LAN, and VPNs with their phone services.

Re:Question

[KoriaDesevis]

they own a major chunk of the internet backbone.

I had forgotten about this aspect of MCI... I forgot they essentially picked up UUNET a while back. Thanks for the reminder.

Re:Question

[rkhalloran]

>>Verizon is what used to be GTE and Bell Atlantic

No, it's what used to be Nynex (New England + NY) & Bell Atlantic (Mid-Atlantic). They may have picked up some of the GTE service areas in that region, but it's basically the merger of those two RBOCs.

Lessee, seven RBOCS down to four: Nynex + Bell Atlantic -> Verizon (plus MCI), SWBell + PacBell + Ameritech + SNET -> SBC (plus AT&T), USWest + Qwest -> Qwest, Bellsouth stands alone. They're the only one of the Seven Sisters that hasn't picked up an LD carrier at this point; who's left? Sprint/Nextel?

Re:Question

[KoriaDesevis]

I have a brother who used to work for Nynex... I am somewhat sure that Bell Atlantic ate up Nynex and essentially absorbed it completely before merging with GTE. The name change occurred when the Bell Atlantic/GTE merger took place.

Re:Question

[monkeydo]

You seem to be confused. When the RBOC's were broken up, PacBell was part of Pacific Telesis (along with Nevada Bell), and SNET was independant. Verizon does indeed own GTE. Accurate information here.

Re:Question

[Dun Malg]

I have a brother who used to work for Nynex... I am somewhat sure that Bell Atlantic ate up Nynex and essentially absorbed it completely before merging with GTE. The name change occurred when the Bell Atlantic/GTE merger took place.

You are correct. Bell Atlantic and NYNEX merged in 1997. The combined company dropped the NYNEX name entirely and just called itself Bell Atlantic (who can blame 'em; I always thought "Nynex" sounded like the name of a poisonous spider). GTE and Bell Atlantic merged in 2000 to become Verizon.

Re:Question

[hawaiian717]

What it does do is allow Verizon to package plans that include local, long distance, and wireless to consumers.

They already do. It's called Verizon Freedom, and includes unlimited long distance telephone, with the option to add DSL and DirecTV service. It's pretty similar to The Neighborhood. No doubt they'd be happy to include your Verizon Wireless service on your bill too.

What's next?

[cavemanf16]

What's next?!? The same thing we do every night, Pinky. try to Take OVer THE WORLD!

Re:Capitalism at its finest

[MindStalker]

Chuck Schwab? The Chuck Schwab? Geez Chuck, get a clue stick! :)

ok, now that you all have a dance partner...

[Anonymous Coward]

it's time for the telecom ho-down.... ... er wait... don't we need 4 couples for a square dance?

Oh good...

[TOWebstress]

More people get subjected to that stuff that Verizon refers to as "customer service."

Attn: MCI customers, carve out a few hours to sit on hold should you require assistance. Then expect the run-around. Repeat ad nauseum.

Re:Oh good...

[Sporkinum]

What, Like MCI/UUNET has/had good customer service? I feel ashamed that I worked for 7 years for those thieves. My only wish is that my friends that still work for them manage to land on their feet after the inevitable bloodletting.

BTW, When I had my throat slit 2 years ago, I know several systems lost the only people that knew how they worked. When they broke, there was no one around that knew what to do.

The good news is that I have a much better job now working for a non-profit. Make a little less money, but the work is much more rewarding.

Breakin' up is hard on you

[Tackhead]

I beg of you, don't say goodbye!
Don't wanna use no MCI!
Reach out and touch some other fool,
'Cause breakin' up is hard on you!

They say that breakin' up was hard to do,
When Carly put the screws to you,
Spun off Lucent and then,
Includin' breakin' up she also buggered HPQ and then...

AT&T gave back the phone!
And now we'll lease, no more to own,
Reach out and touch some other fool,
'Cause breakin' up was hard on you.

(With apologies to the original 1984 Breakin' up is hard on you parody from the American Comedy Network.)

Re:Breakin' up is hard on you

[Anonymous Coward]

Anyone got an MP3 of the original? link is dead.

The deal is goin' down, shoobee-doo-down-down!
The rates are goin' up, uppee-up-up-up!

Why this matters for SPAM...

[jaylee7877]

MCI is currently the largest ISP allowing (and some consider supporting) spammers to use their bandwidth. Verizon is currently one of the most aggressive anti-spam ISPs. Some have argued they've gone to far blocking legit messages often but most of their users are happy about the spam control. How these two will mesh may be a very interesting chapter in the war on Spam.

Re:Why this matters for SPAM...

[steve6534]

Verizon does not own level 3 - Level 3 is it's own publicly traded company (LVLT)

Re:Why this matters for SPAM...

[corblix]

MCI is currently the largest ISP allowing (and some consider supporting) spammers to use their bandwidth.

This is just part of MCI's ongoing plan of treating people badly.

• They were serious spammers even before there was such a thing as spam (phone spam).
• Their phone sales people bullied, pressured, and sometimes (I have records of this) flat-out lied.
• Their customer service people were rude and unhelpful.
• Their executives lied over and over and over and over.

Never, never, NEVER do business with MCI. Not for phone service, not for internet service, not for calling cards. Never.

And if Verizon buys MCI, then watch them carefully. Are they going to keep MCI liars and criminals around? Are they going to continue unethical MCI policies? If they do, then Verizon has effectively become MCI, and they should be avoided like the plague.

It Lives!! It Lives!!! IT LIVESSSS!!!

[visionsofmcskill]

Pac bell aquires SBC who aquires ATT who aquires cingular who aquires Sprint who aquires nextel who aquires Verizon who aquires MCI who aquires vonage.

Bell labs quires pac bell.

Ma Bell rises like the phoenix from the ashes to dominion all feeble earthly communications

Skynet is brought online.

Anti-Monopoly Trust Busters Break up Ma Bell into baby bells

Lather
Wash
Rinse
Repeat

Mua ha ha ha hh ah aha ha a ha ha aha hha ha ah

Re:It Lives!! It Lives!!! IT LIVESSSS!!!

[big-giant-head]

I believe SBC already owns Pac Bell ????

Re:It Lives!! It Lives!!! IT LIVESSSS!!!

[mmkkbb]

ATT who aquires cingular

AT&T wireless was a separate business unit from the AT&T purchased by SBC.

Re:It Lives!! It Lives!!! IT LIVESSSS!!!

[gerbache]

They also co-own Cingular with Bellsouth. Before long it'll all just be one big company again, anyway, so I guess it doesn't really make any sense trying to figure them all out anymore.

McGowan is spinning

[fragzilla]

To review....MCI broke up the bell monopoly. Later, MCI is "bought" by Worldcon during the internet bubble. Verizon (spawned from the Bell breakup) now buys MCI. The circle is complete and McGowan is spinning in his grave.

The End Of Telcos

[WombatControl]

If that happens, the telcos will have screwed themselves.

Why bother with a high-price telco with crappy services when you can get Vonage or Skype or any number of IP-based carriers that will be able to provide the same service cheaper and faster than traditional telcos.

You tend to see consolidation in dying industries - POTS is becoming a dying industry. Once VOIP starts really hitting the mainstream, that line of revenue will only continue to dry up.

Right now the money is in cellular service (where there's usually at least one local/regional company competing with the big boys - or at least there has been in my experience), and in VOIP. Either the telcos adapt or die.

As we've learned from both the dinosaurs and AOL/TimeWarner, sometimes being big and complex isn't a good thing from an evolutionary standpoint.

Re:The End Of Telcos

[Anonymous Coward]

Why bother with a high-price telco with crappy services when you can get Vonage or Skype or any number of IP-based carriers that will be able to provide the same service cheaper and faster than traditional telcos.

Yeah, and who are you going to be getting that Internet service from to use your VoIP service? Oh yeah. That's right. Verizon.

Okay, no problem, I'll just go get a cell phone instead. Except, oh wait a minute, I live in a hole in the Sprint network, so, the only serious cell phone provider in my area is Verizon.

Hooray for the depth of choice offered by capitalism!

Re:The End Of Telcos

[Anonymous Coward]

Yeah, and who are you going to be getting that Internet service from to use your VoIP service?

Comcast, Charter, TimeWarner, etc, etc. There are other providers of Internet service besides the local phone companies.

Re:The End Of Telcos

[Anonymous Coward]

Ah, no. Generally there's one other provider. Since local phone companies and local cable companies generally enjoy a natural monopoly-- only one group can actually own the wires going into your house-- this means you've got at most either a local DSL provider, or a local cable provider.

So if you want internet high-speed enough to use VoIP, you're going to have to buy from one of these two.

Except let's say you happen to live in an area where either DSL isn't offered, or cable isn't of acceptable quality. Many areas fall into one or more of these categories. You now have one choice.

If that one choice is Verizon, you are now screwed. Soon you will have no viable options either in your local phone service, or your long-distance phone service, or your internet service provider. You'll still have a choice of getting television service through Verizon IPTV or Satellite, of course! Enjoy that while you can.

Re:The End Of Telcos

[TheGax]

Where I live... Verizon for DSL or FIOS Brighthouse for cable internet DirecWay (sucky satellite) Not quite the "one or the other" from the first paragraph.

Re:The End Of Telcos

[Anonymous Coward]

Then consider yourself lucky. We don't all get such luxuries.

Re:The End Of Telcos

[gid]

I live in a hole in the Sprint network

Yeah, you and half the country. Cingular has been working great for me here, no more randomly dropped calls.

Re:The End Of Telcos

[Anonymous Coward]

With the consolidation of power into regional monopolies, these guys can shut down Vonage and Skype.

Re:The End Of Telcos

[Anonymous Coward]

Say, how do Vonage and Skype get those bits to my house?

Re:The End Of Telcos

[Shadow99_1]

Actually if you read another article on slashdot a bit later than this one you'd see they simply block competing VOIP services from using their networks. Then they offer their own VOIP... Inf act I wouldn't be suprised if VOIP is used between their own facilities in some way to reduce costs of using conventional POTS equipment (actually I'd swear I've already heard about that starting awhile ago). At that point offering their own VOIP service is the simplist of things for them to do.

And each of those merged companies provides cellular, so they won't be hurting due to cellular service replacing POTS for alot of people... In fact they make more off of celular than PTS atm and so focus much mroe energy on it...

Why?

[rewt66]

Why would a board approve a purchase for less money than a competing offer?

Under-the-table payments to board members is the only plausible reason that comes to mind. Are there other explanations?

Whatever the explanation is, I have a hard time seeing how "increasing shareholder value" comes in to it...

Re:Why?

[fragzilla]

Uhh...could be MCI got burned in a similar scenario a few years ago. MCI was going to merge with BT. Then Worldcon showed up with their carpet bag and a larger offer. BT was pushed away and the rest is bankruptcy history. Verizon & MCI is a much better mix than MCI & Qwest.

Re:Why?

[Locke2005]

Maybe because Verizon agreed to cleanup the mess left behind by the massive fraud perpetrated by MCI when it was named WorldCom? Taking on that liability and handing each MCI exec a "get out of jail free" card is worth far more than stock shares...

Re:Why?

[geoffrobinson]

One company is more stable than the other. They may be concerned about the long-term and the best interest of their shares in the newly-formed company.

Re:Why?

[Tenebrious1]

Why would a board approve a purchase for less money than a competing offer? Under-the-table payments to board members is the only plausible reason that comes to mind. Are there other explanations? Whatever the explanation is, I have a hard time seeing how "increasing shareholder value" comes in to it...

One of the things they look at is their own security; is the new company going to purge the board and replace them? Another is what they plan to do with the company; are they going to gut it and sell off the parts, making your options worthless? There's a lot more to a deal than just stock price. Maybe the board just doesn't like the attitude of the higher bidder. Money isn't *always* everything.

Re:Why?

[winkydink]

Qwest is on shaky financial ground. Verizon is not. In a mostly stock deal, one needs to think about future value, especially if one is a large, institutional investor.

Re:Why?

[DaFork]

There is another reason.

MCI's largest cost is line cost (the cost of leasing lines from other carriers) and Verizon needs a data network. After the merger, MCI does not have to pay line costs to Verizon anymore and Verizon gets a data network. It's a win-win for both companies.

Re:Why?

[thpr]

The board is responsible for adding value for their shareholders, not the acquirer's shareholders. Because the transaction is going to be done in stock, some consideration needs to be made of the partner, and the existing valuation of that company's stock (and the future survival of the combined company)

Qwest - a company that already has more than $14B of debt, yet zero free cash flow, a financial loss, decreasing revenue, negative book value, and negative return on assets, is not as stable of a partner as Verizon ($9B of free cash flow and net income of $7B last year, even though it carries more debt).

Re:Why?

[odin53]

Why would a board approve a purchase for less money than a competing offer?

Depends on several things. You're alluding to "Revlon duties", which are imposed by Delaware law and require the board of a company that's on the auction block to get the highest possible short-term shareholder value in the sale.

For one, it depends on the governing law and the structure of the deal. Revlon duties are part of Delaware corporate law; many states have "constituency" laws that affirmatively do not impose Revlon-type duties on the board (requiring a board to look at *non-shareholder* interests as well as shareholder interests in reviewing a merger deal).

Also, not all mergers will trigger Revlon duties; e.g., an all stock merger of equals between widely owned public companies would probably not trigger Revlon. With those kinds of mergers, boards are free to and should look at the long-term value (strategic or otherwise) of a merger, as well as its short-term impact. This could include the acquirer's growth prospects, stability, etc. (Dunno what the MCI/Qwest deal is; I know, RTFA...)

Also, if there are Revlon duties, shareholder value isn't *necessarily* all about the amount of money involved, though you have the right intuition that the amount of money is the dominant factor. It's pretty risky for board with Revlon duties to take a deal when there are competing higher dollar value offers, but other significant short-term factors could justify taking the smaller deal.

Re:Why?

[Moofie]

Which would be just fine, if there were some way to safeguard the interests of the customers.

But there's not, so this is bad.

Re:Why?

[shakuni]

This is a silly statement isnt it ? VZ doesnt have to pay for data services but that also means that the combined entity will lose that revenue. Similarly MCI doesnt have to pay line charges but the combined entity will lose that revenue. When you take taxes into account things might change a little bit. But then this post doesnt talk about tax benefits gained from merger. Tax laws are too complex and orthogonal to most slashdotters including me.

good ol' Ma bell

[Anonymous Coward]

The borg is coming back together. And we all know Bush surely won't do anything to stop it. One can only hope they can't screw us too bad in the next 3 years, and then maybe we get an administration change who will do something. Although, both parties are so easily purchased I doubt anything will change.

Re:Capitalism at its finest

[ChuckSchwab]

Sorry, forgot I was using that username for that post.

MCI aka WORLDCON

[Ars-Fartsica]

and no, that is not a typo

Re:MCI aka WORLDCON

[Daedala]

Worldcon is trademarked by the World Science Fiction Society. They were really not thrilled with the "Worldcon" headlines. The Worldcon Mark Protection Committee is going to get you!

Attention mods

[rewt66]

Who modded this OT? It is, in fact, directly on-topic, and funny to boot.

And no, I am not the original poster...

Re:Attention mods

[gammygator]

I think some folks either don't have a sense of humor and/or consider any attempt at humor off topic. Or, god forbid, we have Slashdotters who don't know about Tolkien.

Re:Attention mods

[alamandrax]

This Tolkein you speak of... is it edible?

And... oh yeah! Down with conglomerates!

Re:Attention mods

[Anonymous Coward]

I think some folks either don't have a sense of humor and/or consider any attempt at humor off topic. Or, god forbid, we have Slashdotters who don't know about Tolkien.

Or who do not consider it funny merely to say "one X to rule them all and in the darkness Y them" for every given noun X and verb Y.

I can see it now...

[Cutting_Crew]

In the Making/Happening: Sprint buying out Nextel SBC buying out AT&T Verizon to aquire MCI Cingular buys our At&t Wireless in other news: Comcast buys out Cox Cable, Cable One and RoadRunner, while AOL files bankruptcy. DirectTV and Dish Network Merge while ESPN seeks to buy out the merge. BellSouth closes shop and Verizon and Nextel Merge. EA sweeps the floor with Ubisoft and buys out Sony and Nintendo. EA & Microsoft go head to head in court over rights and patents. Lawyers get rich. Customers get screwed.

Re:I can see it now...

[Bake]

And in the end it'll all be bought out by Pizza Hut (or Taco Bell, depending on the version).

Re:I can see it now...

[Cutting_Crew]

what could pizza hut or taco bell offer for the people working for EA or M$? maybe a free fast food line to feed their bodies after they have worked 15 hour days?? maybe then Walmart can buy out pizza hut and taco bell as part of the merger -- then walmart can have a pizza hut, taco bell and Mickey D's all in one.

Can the spammers on MCI

[AnalogDiehard]

So, what's next for the telecom industry?

How about we give the spammers the boot?

What's Next

[stalky14]

They merge twice more, call themselves AT&T and we start all over again.

Marx may have been wrong about communism, but he seems to have been dead-on about capitalism.

...Sean.

Next step

[srhuston]

Well, now that a few of them have merged, they'll probably stabilize for a little while, and then start buying each other up again. Pretty soon, we'll be down to one company providing phone service.

Hey, wasn't there talk of TV over phone too? Maybe once all the companies merge, they could call themselves... American Telephone and Television? Or just AT&T for short. That has a nice ring to it. Ring! That's it, they can use a bell as their company logo! People can buy stock in it, and refer to "My Bell" phone company.

Re:Next step

[JoeGTN1]

Ma Bell, by the way... My Yahoo and My Excite and My this and My that have gotten to your brain.

Next

[Deinesh]

>>So, what's next for the telecom industry?
The electric utilities start selling broadband over electric lines. Joe sixpack discovers voip. Media company's start bypassing the cable networks and sell thieir products directly to the customer over broadband (The rest of us use bittorent :D ).

The telecom industry dies off.

Ultimately, it comes down this:
Q. How many wires do you ABSOLUTELY need running to your house?
A. For most people it is one - electricity.

Re:Next

[anakin876]

wouldn't that be two wires??

What's next?

[grasshoppa]

So, what's next for the telecom industry?

Panic. Followed by voip regulations by "our" "elected" representatives, which effectively will make more and more of us law breakers.

Re:Capitalism at its finest

[goldspider]

I think it's time to abolish corporations too, while we're at it.

Why stop there? While we're at it, I think it's time we abolish this whole ownership society thing. The whole concept of private property is offensive. Why should we allow individuals to believe they are better than anyone else, and have things that others don't?

There are needy people out there that are being trampled by greedy, heartless bigots who are unwilling to sacrifice their own luxury for the collective good.

It's time for government to force these corporations to cough up their ill-gotten gains, and give it back to the people who are victimized by these hatemongering corporations.

Let's ask the "black box".

[reporter]

" So what's next for the telecom industry? "

Well, let's ask the black box that supposedly generates random numbers to predict the future. I kid you not. Two days ago, Slashdot offered a serious news article about some scientists believing that a random number generator can predict the future. If the current merger of Verizon and MCI will cause a calamity in the American economy, the black box should be able to tell us.

(Tongue FIRMLY PLANTED in cheek.)

Re:Let's ask the "black box".

[Ingolfke]

In the case a better predictor of the future is to look at past performance; the past performance of Michael Capellas. This guy turned Compaq around and sold it. He turned MCI around and sold it. Michael's the reliable predictor here, not the random number generator.

Re:What choice?

[Macrat]

What makes you think there is any choice in the US today?

Same crappy service. Same crappy phones.

All the good cell phone technology is OUTSIDE the US.

What's next?

[jpsst34]

So, what's next for the telecom industry?

Um, perhaps Verizon acquires Adam and Eve so that they can have enough dildoes and butt-plugs to shove up each and every one of our asses now that we'll all be bending over some time very soon.

re-monopolization

[plimsoll]

"So, what's next for the telecom industry?"

They'll merge back into Ma Bell.

what's next?

[Anonymous Coward]

another lawsuit. check your merger history, but choosing a less lucrative offer practically ensures that some stockholder(s) and their lawyer will sue to try to get more money.

Re:Capitalism at its finest

[tommyth]

Where do you live? There hasn't been a choice for cable companies for years. The cable companies own the cable lines, and you HAVE to buy their service, or get no service at all. Obviously the story is about phone service, but the idea is the same: it will happen.

What's next?

[meme_police]

Eventual consolidation back into one monopoly. I swear eventually we're going to have one telecom company, one bank, one insurance company, one supermarket, etc.

Figures...

[hollismb]

The simple fact is, that long distance companies are a dying breed. Sure, plenty of people still have long distance, but more and more people are getting wise to the fact that you can simply use your cellphone to make a long distance call. Of course these companies are going to get bought out while they're still profitable. This coming off the heels of a year when wireless surpassed wireline in terms of customer base, and during a year when it's predicted the wireless minute usage will surpass wired minute useage.

We don't care. We don't have to.

[Qbans]

Is it actually coming back to this?


Although funny, I guess their was some truth to it. But the real question comes to whether this is good for the telecom industry or not. I guess so in ways, but I think that only time will tell. It is kind of sad to see what used to be the biggest names in telecom bought out, and possibly destroyed, especailly stuff like this.

That's no moon...

[TheLoneGundam]

The DeathStar was broken up into little pieces, but apparently the dark side of the Force is bringing them back together. Admiral Vonage and General Skype will lead the rebel alliance Help us, Obi-For-Wan-Wan, you're our only hope!

Re:That's no moon...

[NardofDoom]

How far do you think the Rebels would have gotten if the Empire owned all their ships?

Vonage and Skype would be a solution if we had *gasp* publicly owned broadband. Until then we're at the mercy of whatever company we have. Comcast, Verizon, SBC et al can block VoIP at will, and we have no recourse.

What's next?

[Anonymous Coward]

If there's any mercy in this world, they'll start buying airlines next.

No wires needed : Wireless power is possible too

[rolfpal]

See here
http://www.geocities.com/Area51/Shadowlands/9654/t esla/projecttesla.html

Nicola Tesla (the inventor of AC power) pioneered a wireless transmission method as well.

Cheers

An Observation

[eseiat]

I find it quite interesting that all of these mergers seem to involve one company that has a reputation primarily, although not exclusively, for being a cellular provider and the other being a land-line/long distance carrier. After these three mega-corps control all the air and land telecommunications what is next for them?

This all reminds me of the cable company and internet company mergers of the past few years as well. Why the sudden influx of mega-mergers over the past few years? Are these actually "good business" decisions or are they attempts to salvage the future of corps that feel the end might be near for them? I can't help but worry about the legitimacy of these deals as most of these companies have been bitter rivals for so long. It all just seems a bit too chummy for my taste. (Puts on tin-foil hat)

Re:Capitalism at its finest

[Rude Turnip]

When I visited the Chicago suburbs, I discovered that some people actually can choose their cable provider.

What's next you ask...

[bjjohnson]

...well, I forsee the next 7 years of mergers to about 1 or two telco giants. That should last about another 8 ro 12 years... anyone seeing the pattern yet?
Then, we will all realize how we have been getting screwed hard core and require the Government to do something about it.
Then, the government will require greater compition and impliment policy demanding the great one or two telcos to break up...
Then that will last for about another 12-16 years until deregulation starts to allow mergers... rinse, reuse, repeat. Amazing how we (humans) are creatures of habit....
BUT....
The one cog in the whole works will be the big social revolution and class warfare in about 15 years anyways, so who cares, start fortifying your basements......

What's Next?

[rsmith-mac]

With only 3 regional companies left, there's going to be significant pressure to reduce that to 2, since it's far easier to hold a virtual monopoly when you only have 1 competitor to deal with. Look for Qwest, the smallest company right now, to be the victim and swallowed up by one of the others, probably SBC. I doubt we'll see 2 become 1 in the short-term though, since the burden of proof on the survivors that it's acceptable for them to be 1 company is going to be too high. In the long term however, if VoIP services take off and empower the cable companies and otherwise further detract from the POTS's relevance, then we could see a final merger.

Speaking of the cable companies, look for a continuation of their tendency to merge every few years. With the exception of TW and Comcast merging, almost anything can and probably will happen.

telecom == fraud

[irritating environme]

first law of telecom mergers, pricing, projects, whatever...

Re:telecom == fraud

[Glowing Fish]

I think you mean telecom=fraud
unless this is an assignment.
because you might have

while death && taxes
telecom==fraud

Calm Down. Ever hear of the Internet?

[foghorn666]

I'm surprised at the knee-jerk alarm about this merger. Do you people really think that this is going to lead to monopoly?

Hardly. For one thing, there are still a ton of telecom providers out there... it'll be Verizon, AT&T, BellSouth, Qwest, and two dozen smaller regional carriers. All these mergers have accomplished is the undoing of the ill-considered 1986 telecom act, which said you couldn't do both long-distance and local telephony. Now the big guys do both.

But more importantly, there's more competition than ever before in the industry because of emerging technologies and the net. Voice over IP providers --including pure-play guys like Vonage, as well as all the cable companies-- are starting to compete with the phone companies. So AT&T and Verizon are going to have to stay competitively priced in order to keep from losing customers to those services.

And have you ever heard of cell phones? The wireline carriers can't crank up costs, because they're already losing people to their mobiles.

Not that it matters, but I'm a liberal and usually object to any conglomeration of corporate power. But it's silly to instantly panic at any sort of merger and assume it's a nightmare.

All these companies are doing is trying to stay alive in the face of killer new technology. The only people screwed here are the carriers themselves.

Re:Calm Down. Ever hear of the Internet?

[learn fast]

It's just kind of odd that we let the same companies that we spent $N billion dollars splitting up slowly merge back together just because there isn't enough political will to stop it. Yesterday a Baby Bell bought AT&T long distance back.

Re:Capitalism at its finest

[ChuckSchwab]

Yeah! Right on, bro!

Q: So, what happens when you nuke Cthulhu?

[Jedi Holocron]

A: Cthulhu reforms 15 minutes later, except now Cthulhu is radioactive.

Q: So, what's next for the telecom industry?
A: It reforms 25 years later into Ma Bell, except now it controls everything.

Readable version

[Anonymous Coward]

http://shit.slashdot.org/article.pl?sid=05/02/14/1 956216

MCI=Crappy Dialup / Verizon=Crappy DSL

[Uptown Joe]

Please don't mess up my phone. (I still need to get over to the Verizon store to get my V-Cast working on my LG VX800)

I predict...

[SmokeHalo]

...a Celebrity Deathmatch special (Corporate Deathmatch), with the lawyers for each of these corporations fighting it out with knives.

Can you merge me now? good

[GatesGhost]

blah blah blah moderators wont read this blah blah blah.

wrong

[Indy1]

verizon is quite spammy as well, just not as bad as mci/worldfraud is

sbl listings for verizon

sbl listings for level 3, which verizon owns

Re:wrong

[jaylee7877]

Hmm... You're right, I checked the Spamhaus.org ratings after I posted and Verizon is listed at #8 while MCI is #1. Still, my thought is that the majority of Verizon spam servers are DSL users who are ignorant zombies. MCI has been known to continue allowing allowing spammers to setup legit (at least in their eyes) servers and send out Spam, while in Verizon's case, it seems to be more hacked boxes. Verizon should do more to defend against this, but they've certainly done better than MCI. One reason their #8 is probably because their also one of the largest ISPs. Comcast is #4.

Yeah...

[Anonymous Coward]

because socialism and communism have worked out so well for the rest of the planet.

Two crappy companies become one crappy company

[Mustang Matt]

I've had bad experiences with both companies. I'm glad to see them come together so they can die a slow and painful death.

Re:Two crappy companies become one crappy company

[Grishnakh]

Thankfully, I've never had to deal with Verizon's landline division, but I have had service with their wireless division for several years, and it's been pretty good.

I can't say it's been great: the way they lock down the phones so you have to buy games, ringtones, etc. through them instead of being able to download them really sucks. I'm not sure how other US cell providers compare.

But where Verizon has been really outstanding has been in coverage. Look at service maps for different providers, and Verizon's is easily the most complete. Except for a few odd places (like Mississippi), Verizon easily beats the coverage of everyone else. And while I've had them, I've never had the problems with dropped calls and poor reception that my friends have had with other carriers.

Re:Capitalism at its finest

[dtk13]

You got that right! As a customer of verizon I know they give a rats ass about their customers. I've been trying to get DSL for over a month now and basically all the conversations have ended in: "Well there is nothing we can do about it. And go fuck your self!" That's one heck of a biz model for ya.
Re: "So, what's next for the telecom industry?" I predict/hopeing that verizon collapses because its so big (the whole what goes up must come down theory, I think that this will happen to Microsoft as well).

The return of Ernestine!

[mollace]

Welcome back, Ma Bell! We're sorry we ever tried to break you up! Please don't raise my rates.

It's worse than that

[knarfling]

Let me share a personal experience with merging companies. I worked for a company that was in bankruptcy. After working hard for several years, the company pulled itself out of bankruptcy and went public. Not too long after that we merged with a different company. At first the new company wanted to run things the way they had before, but soon realized that they were over their heads. Everyone sat down and worked out which things would be best for the combined company. Some things were taken from one company and other from the second company. Things that worked were accepted and things that didn't work were dropped. In short, it was the ideal merger.

Unfortunately, it did not last. After a couple of years, the new company bought out a third company. This third company was in bankruptcy with little or no hope of pulling itself out. I helped on the discovery/review process and found several things in just one department where they were losing money hand over fist because of poor practices. We bought them anyway. After we purchased them, we let all the management of the parent company go, and promoted the management of the company we had just purchased. The management then tried to impose the same practices that had put them in bankruptcy on the parent company. After a few clashes with management, my job title was eliminated and I was offered severance. I took it and ran. Since then the company I was with has been purchased twice.

I really hate to think what those executives who ran at least two companies into the ground are doing now.

Re:It's worse than that

[lgw]

Sounds exacly like my experience with the Compaq/Digital merger. Why do acquiring companies fire the management team that made them successful? It boggles the mind.

I look forward to...

[burrhead]

working for the one, all encompassing Company, sometime in the near, near future. /save us Ripley

AT&T

[mr_zorg]

And in other news, Sprint-Nextel, SBC-AT&T and MCI-Verizon signed a merger agreement today in a move to stave off competition and put an end the mega-mergers of late in the telecomm industry. The companies have issued a joint press-release indicating that the new company will be known as AT&T.

Hmm. Back to square one. Oh well.

Re:AT&T

[ArtStone]

You left out one piece of the pie - BellSouth.

And since the cable companies are now getting in the phone business, we need to probably add back in Adelphia, Comcast, Time Warner Cable, and a few others. Adelphia is rumored to be about ready to be bought up from bankrupcty court, although the bond holders don't like the proposed offer.
http://www.buffalonews.com/editorial/20050213/1002 905.asp

differences in offers

[mckwant]

In buyouts like this, there are any number of things to consider:

- debt load
- payout schedule
- amount financed through new debt (junk bonds used to be a common component)
- ongoing ability of the buyer to actually pay

and so on. Have a look at the excellent "Barbarians at the Gate" (isbn: 0060536357) to get a feel for what happens. That was an extreme case (RJR/Nabisco), but it brings up a lot of the variables involved.

A rise standard of living...

[glrotate]

A rise standard of living always comes with a price. And that price makes it not worth it.

What in your mind was the cost of the wheel, the lightbulb, and antibiotics?

Re:A rise standard of living...

[Talondel]

What in your mind was the cost of the wheel, the lightbulb, and antibiotics?
In order: urban sprawl, polution, and overpopulation Not that I believe that, but there certainly are those out there that do.

Re:A rise standard of living...

[Anonymous Coward]

It's hard to take you seriously when you're implying that capitalism is responsible for the invention of the wheel. The freaking wheel!

Re:A rise standard of living...

[Anonymous Coward]

when I say price, I am not talking about money.. I am talking about things like values, culture, and spirituality. American capitalism is empty in that regard, and injecting such a system into other cultures is destructive.

I suppose the goal of reducing suffering is a worthy goal, but American capitalism mostly increases suffering.

Not necessarily...

[raehl]

For a business to survive in the long term, revenue fro providing a good/service must eceed the costs of providing that good/service. There's no guarantee that consolidation will bring better prices or service - in fact, it's quite likely that price will go up, or service will go down, until money in > money out for each business.

That may sound bad, but the alternative is the businesses go bankrupt and the good/service isn't provided at all.

The one thing the consumer might get out of this is better service bundles - i.e. phone+cell+DSL+TV etc.

What's next?

[yo5oy]

Only pain and suffering as these telecommunications providers eat up my bankaccount with numerous fees.

Actually, on the bright side...

[Jedi Holocron]

...having to only pay one bill in the future, rather than 5 IS attractive...

Re:Actually, on the bright side...

[Glowing Fish]

Unless that one bill alone costs double what the five would.

It ain't a done deal yet

[stox]

A large number of MCI shareholders are very angry with this deal. It is possible that the deal will not get shareholder approval.

Choice was an illusion.

[jzarling]

Its all a conspiracy
Our choice was really just another customer of another telco.
The baby bells were really overseen by a shadowy board of directors who are now working to consolidate the baby bells back into Ma Bell. Wake up sheeple Ma Bell never broke up, they just wanted us to think they did.

Re:Choice was an illusion.

[Anonymous Coward]

Awww, you said sheeple. I think it's so cute when someone invalidates their own post like that. Next time throw in an "M$" or an "Open Sores" and make it even easier.

Cue Mothra!!

[Stanistani]

It's finally time to replace that obsolescent breep-breep ringing noise on the handsets with the throaty screech of Godzilla.

What about Mike Capellas?

[Anonymous Coward]

Does that mean he's conveniently out of a job?

Let's see, what major PC/consumer electronics company recently dumped their CEO and is currently looking for a new one with experence in running a large company?

Didn't he walk away from HP/CPQ with a hefty golden parachute to boot?

Nice job if you can get it.

A better way...

[quandrum]

Say what you will about capitalism, but it is almost the sole reason that the standard of living has risen so much in many countries over the last three centuries or so.

There is no finer systerm for taking a society from an agrain to a post-industrial culture. However, I think most of the ills we are suffering these days arise from capitalism. Whether it's corporate conservatism (RIAA, DMCA, etc), monopoly and consolidation (Microsoft, mergers), or the rollarcoaster ride that is our economy (How many of you went poor ->millionaire->poor in a a year or two? How many of you have houses that have inflated 400% in the last year or two, and will likely loose all that and more in the next couple?), captalism is failing us every day.

I'm sure the European Aristocracy that the cultural and industrial revolutions of 1700's replaced were congratulating themselves how much they had improved their standard of living over the old days. But they couldn't see outside the limits of their (*gasp*) class, or how their own system had become rotten and evil. It's funny how despite what High School history teachers tell you, learning history never stops us from repeating it. Life is shifty and will disguise itself. Maybe it's time to revolt again.

Not the case at all, moron.

[Moryath]

Comcast and Warner today operate under "gentleman's agreements" not to enter each other's territories, thus granting themselves monopolies and the ability to price-gouge where they currently are.

And no, no county does "franchises" for cable. Look at Milwaukee for a good example of how it USED to work - prior to the death of Viacom cable, there were two COMPETING cable companies in that county. The only reason no other cable company's come by since is that TW threatens to go into their existing counties and deliberately undercut their prices, running at a loss till they drive the competition out of business.

Re:Not the case at all, moron.

[Rasta Prefect]

And no, no county does "franchises" for cable. Look at Milwaukee for a good example of how it USED to work - prior to the death of Viacom cable, there were two COMPETING cable companies in that county. The only reason no other cable company's come by since is that TW threatens to go into their existing counties and deliberately undercut their prices, running at a loss till they drive the competition out of business.

The system he describes is the way it works where I'm at. It may not be that way everywhere, but to say that _no_ county does that is flat out wrong. In most places theres one set of coax in the ground. That coax is operated by a company thats given a municipality granted franchise to do so.

Re:One company

[symbolic]

What's interesting about all of these acquisitions is that yes, in the short term, it may reduce some degree of choice we once had as consumers. But bear in mind, that just as old, crusty, entrenched companies can be laid to rest by merging with other old, crusty, entrenched companies, there is always room for new competitors. Simply put, the monopolies resulting from these acquisitions still need to stay on their toes, lest the carpet be yanked out from under them by newer, leaner, more innovative, more agile, competitors.

Re:Why? I'LL TELL YOU

[Anonymous Coward]

I used to work for Q-worst, so I have a little insight. I was paid very well for what I did, but sat through too many meetings announcing the latest 4 million plus landline loss, eroding benefits and plans to replace most of the workers with poorly paid, poorly trained $8 Idahoans.
The dissatisfaction in the customer base, the weak attempts to capitalize on emerging technologies such as DSL and wireless, the decline of the need for residential long distance services, all of these combined to make a well paid position seem like the last rat to cling to a sinking ship.
I took the next offer I got, and I don't regret it. If I were MCI or any company in talks with Qwest, I would stay far, far away. Any company that would pin its hope for the future, wireless, on a deal with a competitor, Sprint, is not long for this world.

Re:Capitalism at its finest

[tommyth]

In Chicago and other metropolitan areas, perhaps you can. If you took my statement to mean that there is no place on this planet where there are two cable companies, well, I guess you'd have to avoiding the first question (Where do you live), although you sort of answered it. Look, my point was there are industries like telecommunications that are already monopolies. Prior to 2000, to my knowledge, there was only one cable company in Indianapolis link. In the other rural areas of Indiana where I lived, there was only one cable company. The gov't position: http://www.cbsnews.com/stories/2002/03/14/tech/mai n503753.shtml It's also a problem in Michigan: http://www.pro-networks.org/forum/post-343606.html The only thing I was trying to say, is that you can look at other services for the future of telephone services.

verizon does not own level 3

[Anonymous Coward]

Um, Verizon does *not* own Level 3 last I knew, and I just rechecked google to make sure that hadn't changed.

Ma Bell

[Efialtis]

I don't know how many of you remember old Ma' Bell... the major Bell Corporation that included SBC, Pacific Bell, Mountain Bell, etc...

But when the Helpful Government came in and decided that $0.10 was too much to pay for a payphone call, and broke old Ma' Bell into the "baby bells"...

Do ya think they actually helped?

The marked can only handle so many choices...and we can now see, with the mergers of all the variety of phone companies, that limit had been passed...

Now everything is merging again...and soon, we may end up with another version of the old Bell...only, everything will be far more expensive.

Maybe so...

[bitrex]

...quickly runs off to squat on Qwinguzon.com...

What is next

[nurb432]

Is another merger.. Soon back to one single large telecom company that runs everything.

But THIS time it wont be benevolent.. as ATT was. ( stupid congress )

Re:Capitalism at its finest

[drinkypoo]

Actually, I think it's reasonable for corporations to have to cough up their ill-gotten gains when they actually DID get them by victimizing people who didn't know they were being victimized. For instance: tobacco settlements. The tobacco companies collectively knew that cigarettes killed people and yet sold them as the ticket to vitality - at least in their adverts. It should be illegal to mislead people, and in fact it is. The problem is that the penalties don't benefit the people who were misled...

Good thing we split up MA-Bell

[np_bernstein]

::Sigh::

Good thing we broke up MA-Bell so we wouldn't have one company monopolising the entire phone system. Thank god we were smart enough to not break them up into smaller monopolies that ran different parts of the country and could get enough to buy up each other and eventually reform Brother-Bell, and Sister-Bell, which marginally compete. ::sigh::

Re:Good thing we split up MA-Bell

[NardofDoom]

Well, we've learned two lessons:
1) Maybe it would be better if the government owned telecom and companies bought easily revocable leases and
2) We get about 20 years of real capitalism between monopoly breakups.

Re:Good thing we split up MA-Bell

[Jedi Holocron]

You mean Oedipus-Bell...right?

Completely untrue.

[Moryath]

See Milwaukee, Viacom, and Time Warner.

Consumer Prepare

[alexborges]

We, the Coporate Citizens of America are mergin. America, hell, WORLD... prepare, we will begin thumping on your ass soon.

What's next for the telecom industry

[Eric Smith]

So, what's next for the telecom industry?

SBC, Qwest, Verizon, and Bellsouth will merge into a single company, "TPC". And they will start an insidious plan to take control of the government, despite the efforts of the Federal Bureau of Regulations (FBR) and the Central Enquiries Agency (CEA).

And they'll steal all of our left shoes, then return them to us converted into phones. "I limped home in my two-tone touch-tones. Every seven steps you make a call. And then, once in a while, you get one. [ring, ring] Hello? 'I'd like an anchovy to go, and hold the pizza.'"

Re:I can see why Americans are such assholes

[Anonymous Coward]

lol

pathetic..

sustainability is what I worry about...

[JawzX]

I agree with your annalysis on a general and historical basis, however, the sustainability of capitolism is what worries me. I'm no economist, so if anyone can tell me why this line of thinking is wrong, please do...

Once all the mergers have taken place, and all the costs have been cut there are two very different sides to the results.

1) Stock holders are happy, customers are happy. Costs go down, profits go up, services improve.

2) Employees loose jobs. Greater efficiency of a larger single organization dictates a reduction in staff to serve the previous customer base.

Result number two is NOT indefinately sustaianable as far as I can see. Historicaly large mergers send about 10-30% of the total merged workforce to the unemployment lines. With the added pressue of increasing population growth and longer lived workers the only long term result that i can see is massive unemployment and further rifts between the rich and the poor.

When you are part of the five member team operating the world's largest telecom (efficiency and cost cutting to the max to get here) you pull down a pretty good salery...or do you? Who do you sell your service too? The other 400,000,000 people who used to do your (and your four co-workers) Job(s) are unemployed, on Government support and can barly afford food, let alone the latest cellular tele-palm-vibrator-microwave-oven-tv-car-tent-bicy cle you give away with a five year service contract. They don't even pass the credit check for your home phone service. they can dial 911 and toll free numbers because the law says you have to let them, but thats it.

Sure you still have the Government buying your service, but now they've followed your lead and are down to a staff of 17 humans and an artificial intelegence budget calculator.

these are silly extremes, but there will be problems (social and political to mention just two) long before this sort theoretical insanity ensues. I feel that we are teetering awfully close to this edge already and if the governments of the world allow capitolism un-checked reign for much longer we are looking at a class War. Not a polite little small "w" war, but a big nasty guns and death and hatred big "W" War.

I work in a town where 70% (thats a REAL FIGURE) of residential property is owned by out-of state investors and the only jobs left for locals born in the area are service related. This works for now. People don't starve, and they don't live on the street, but the underlying resentment is DANGEROUSLY close to comming above the water line. and like I said, no one starves here.

Just wait untill the merger of MCI-WORLD-AT&T-VerizoPhone with EuroTel-Virgin-FranceTel puts 40% of the western world's telcom workers out of a job.

Governments are supposed to regulate things so that they don't get out of hand. there's a fine line between de-regulation and anarchy (I'm looking at all the Libertarians here...) And i think we need less of both.

Dog Bytes

[Anonymous Coward]

Whats next for the telecom industry?

They will be eaten by a little hound from Redmond Washington...His name is Fido.

1984 To Today (A quick guide)

[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 the announced mergers go through, these players are now parts of:

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

Re:1984 To Today (A quick guide)

[Anonymous Coward]

Sprint was a spinoff of GTE... and wasn't around in 1984.

Re:1984 To Today (A quick guide)

[SEE]

More precisely:

Sprint was formed in the 1970s by the Southern Pacific, as Southern Pacific Railroad Internal Telecommunications. It was sold to GTE in 1983 and remained its own unit; began creation of its fiber-optic long distance network in 1984, then was sold by GTE to United Telecommunications in 1986. UT renamed itself Sprint in 1992.

Given its very, very brief history as a distinct GTE unit, I elided over that by treating it as a separate company.

You don't know what you're talking about, moron.

[n6mod]

Damn near everywhere, there is a franchise granted by the city or county to a cable company. This is the one small way that government has the cable companies over a barrel. They've been able to force the operators to cover rural areas that way, and occasionally, when a municipality or county gets really irritated, they won't renew the franchise.

The "gentleman's agreements" you mention, which all of the MSOs will deny to avoid the Sherman act, mean that nobody else will bid for the franchise, so the city/county is hosed, and has to renew. It's really just a game of brinksmanship.

Now, the Viacom overbuild in Milwaukee is a mutation. There have been others. RCN overbuilds wherever they go. SBC (then Pacific Bell) tried it in San Jose because the incumbent MSO had totally ignored upgrades for years. They lost money on it and ended up selling it to the operator they were trying to displace.

I worked in cable for five years. I know whereof I speak.

Re:I can see why Americans are such assholes

[Anonymous Coward]

No one mentioned anything about America until your post...

You sound familiar...

[izakage]

Ma Bell, is that you???

What's next? (Oblig. Simpsons ref.)

[TheSpoom]

So, what's next for the telecom industry?

CompuGlobalHyperMegaNet.

Amazing amount of misinformation and insanity.

[Anonymous Coward]

MCI was started as the Microwave Communications of America inc. To provide truckers with a mean to communicate from thier trucks. This was of course before cellphones. Then MCI fired the opening volley to take DOWN THE BELL SYSTEM! In 1984 why would a little long distance company SUE AT&T? Heres some history for you. .

From Bell Telephone Magazine - Issue 3 & 4, 1982:

"[1984 was] A trying year for the Bell System. In March, MCI files suit against AT&T in U.S. District Court in Chicago, charging AT&T with "monopolizing the business and data communications market." Bristling at the charge, AT&T files a countersuit, charging MCI with attempting to restrain trade and lessen competition by obstructing or harassing other common carriers. The controversy prompts the FCC in April to begin a broad inquiry into the economic impact of competition, particularly the effect of interconnection and the use of customer-provided equipment. Thanksgiving Week, AT&T learns it is again being sued, this time by the federal government. The Department of Justice files suit against AT&T November 20, charging that the company has unlawfully monopolized the telecommunications markets. It alleges, among other things, that AT&T has attempted to restrict and eliminate competition from other common carriers, private telecommunications systems, and other manufacturers and suppliers of telecommunications equipment, and that AT&T requires the operating companies to purchase Western Electric products. The case is assigned to Joseph E. Waddy, a federal district court judge in Washington, D. C."

MCI has since been a long distance carrier for many regions where other ld carriers wont service. This is one of the reasons MCI was NOT disassembled by the SEC/FCC/whatever. Because if they didn't exist, many regions would be in a defacto monopoly due to no other carriers being available. Sure there were jobs involved and MCI does have alot of government contracts, but those can go to other people, thats not a real concern.

Then MCI lead the push to deregulate the local phone service, which lead to voip's real success and the number portability we all now enjoy for VoIP and for Cellphones. There are now a NUMBER of local carriers, IDT, Sage, MCI, AT&T, and some so small I've never even heard of them more than once. There is no monopoly here and the SEC will never let there be one. If a company like IDT and Sage can exist in a world with 5 huge companies who control 90% of the market, there will NEVER be a monopoly, becuase there will always be a need for competition. Just because you can purchase all your services from one provider doesn't mean thats your only choice. :) Noone is complaining about the cable companies taking over phone cable data and TV? They can afford to provide all those services cheaper than you can buy them seperately. Oh no! They are going to put the competition out of business and have a regional monopoly! Plus once you switch to them, you CANT switch back without paying reconnection fees because you are removed from the POTS system! Wheres the outrage? There is none. In a country with two political candidates how many phone companies do you expect to have?

*Yawn*

[LouCifer]

Still won't keep me from dropping their service at the end of our contract and jumping ship to T-Mobile where they don't cripple their phone's bluetooth features or force you to use their service to download ringtones (rather, you can simply add them using say, a datacable).

Plus, T-Mobile uses the SIM cards. So if I wanna switch phones in the middle of my contract I don't have to get Verizon's permission or pay $250 for a crippled phone.