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MCI/Worldcom buys Sprint
Akatosh gave us the quick word - MCI/Worldcom has tendered an accepted offer to Sprint to purchase them. Another telco merger, this one is for 100$ billion dollars - beating out BellSouth. This is the largest corporate merger on record - and if it means I can get DSL at home, then more power to it.
While industrial food is neither as good or as cheap as what Mom used to cook (or that we can cook for ourselves today), we practically have this situation now:
Notice that you said food that "Mom used to make," not "food that we make". The art of cooking in the home, especially from scratch, is being lost, and we are relying more and more on restaurants and highly preprocessed quick meals.
In the restaurant arena, global chains are displacing locally-owned "mom and pop" restaurants. This is due to massive brainwashing (Sagans of $$$ spent on advertising, so that even a three year old child can recognize the various corporate logos), plus a "quality" approach that emphasizes non-variability in product. The burgers and pizza from my local "Mom's Diner" and "Pizza Oven" (I am not making these names up) are usually better than those from the Big Three [McDonald's, BK, Wendy's] and Pizza Hut. But, the delivery time is slightly longer, and a bit more variable. And, while the food at Mom's Diner depends on who's in the kitchen, a Big Mac is always a Big Mac. Most consumers are choosing the slightly lower cost and increased predictability of MegaBurgerPizza, and ignoring the globalizing/monopolizing consequences.
These global food chains are also in bed with the other major global corporations, such as the media conglomerates. For instance, we all know who the PepsiCo restaurants are now, from the Star Wars: The Phantom Menace marketing, McDonald's toys are coordinated with the latest Disney release ...
Does anyone remember the "We're Beatrice" ad campaign of years ago? The food processing industry is very similar to the automotive industry -- a few mega-corporations, with lots of supplier companies that are wholly or partly owned. The variety of labels on grocery store shelves is deceiving, because the same company will have different "product lines," and often the generic "alternative" is simply the same food without the heavily-advertized label.
As for farmers, while "save the family farm!" is occaisionally heard from the lips of politicians and celebrities, it's nearly too late. The U.S. Census Bureau has stopped counting farming as an occupation, because there aren't enough farmers left to be statistically significant. Of those who are left, the traditional "family farm" has become nearly extinct. Most farmers who are left are becoming "mega-farmers," relying on huge acreages and automation to farm as much as possible. Which leads into the next problem ...
Finally, the market for farm crops is dominated by a few huge global corporations, such as Cargill. So, farmers are buying their "inputs" from a market dominated by megacorps, and selling into a market dominated by megacorps. Even worse, in markets such as beef and pork, some of these large buyers are also the largest producers, and buy from themselves first. So, smaller meat producers only make sales when the large packing houses didn't create enough for themselves. This is one reason why, earlier this year, hog prices were lower than the cost of raising pigs, and effectively lower than Depression prices.
This is one reason farming is declining in popularity, as no sane person will do it. As my father puts it, he works a day job to support his farming habit. :^/
For anyone interested in this subject, I highly recommoned starting by reading The Unsettling of America: Culture and Agriculture by Wendell Berry. Or anything else Berry has written. For an older, but eerily prescient perspective on why corporate monopolization is bad, and what we can start to do about it, see G. K. Chesterton, especially The Outline of Sanity
MCI/Worldcom is buying Sprint which owns 20% (with an option to buy more) of Earthlink which is merging with MindSpring which bought Netcom. I think UUNet is in there somewhere and probably a few I'm forgetting (is PSINet still independent?).
While it's probably not as bad as it sounds, and certainly no bigger that AT&T/Cablewhatever. It makes sense to be wary.
--
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/. again...
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It seems that the Telcos are doing the same thing that the oil companies are doing i.e. Rebuilding with mergers the monopolies that the governement broke some time ago
I hear from my friends at AOL that AOL has people on both boards and now AOL is a majority shareholder of MCI/Worldcom/Sprint/UUNet/etc...
according to their ads:
"AOL *IS* the Internet"
now.... hmmph...
Remember "The Corporation" from Alien? When I first saw the movie, I never thought that could happen. I mean, how could the rest of the population of the Earth be stupid enough to let a single company control everything?
Well, as we have it today, we seem to be ever more mirroring science fiction. For instance, let's look at some of the major industries which the human race finds invaluable today:
Telecommunications: This merger is representative of that. If I were to say name ten telecommunications companies, do you think the average person would be able to do so? (I don't want to count geeks here, because we are either in the telecom industry, or we are looking for the right telecom industry to give us net access)
Software: Yes, it is an essential facility today. "Productivity" would be nowhere but down the drains if software were not something on many people's work desks. And we all know which company controls a whole bunch of this market...
Entertainment: While there are some really really big companies here, such as Disney, Time-Warner, and network television, there isn't a 'one source' of entertainment yet. However, it seems inevitable as Disney wants to get into more markets beyond the realm of family & children's programming and Time-Warner wants to get away from the stock-action movie we see so often.
I'm no expert on the topic, but I'd say there's a lot of corporations that just want to grow bigger and bigger and make their name more and more well known. Luckily, there are no big companies that just produce high quality food and shelter.
For instance, imagine if there was a company that offered the following:
Food: The same food Mom used to make, only even better - and much cheaper too. Why can't this happen (yet)? There is no cheap way to mass produce food. Most food comes from growing livestock or fields upon fields of plants.
Water: It's all around us. All we have to do is go to the ocean and boil us up some fresh water. Albeit, this requires...
Fuel: Meaning, not gasoline, but we need fuel to cook up all that food... Yes, there is an automated way to do this and there are some big players in this market, but it is also a localized process - unlike software distribution and telecommunications service.
Shelter: Pop-A-House. Need I say more? (Well, okay.. if a company somehow figured out how to create a really liveable shelter really really fast, with most of the amenities people like, would there be a need besides the want of extravagance (sp?) to go to someone who designs and builds from scratch?)
Seriously, though, I'm not paranoid about the topic.. but it tickles me that we just kind of let this crap go by... Obviously, this deal might mean that Sprint raises rates. However, it's now harder to fight Sprint from doing this - they have something like 10 times more clout than they had before...
Well, whatever... I can't think of a good way to end this post, so I'll shut up now.
- Shaheen
You should never take life too seriously - You'll never get out of it alive.
Whats really amusing about this is that the Chairman of Sprint dedicated Sprint's $800 million "World Headquaters Campus" in the Kansas City suburb of Overland Park, KS last Friday
This is the largest office construction project in the USA (maybe the world) and has been underway for the past couple of years and is (was?) scheduled to be completed in 2001 (IIRC).
It was designed to house all of Sprints 14,000+ employees in the KC area. Now of course we don't know if "Worldcom" as the new company is known as will keep any employees in KC!
Before people start rioting in the streets about this Worldcom/Sprint deal let's inject a bit of fact into the discussion:
1) No final deal has been made yet. The gist of the article is that MCI/Worldcom have just upped their bid to $100 billion. There are two other competitors, Bellsouth and a German Telecom company that may still update their bids for Sprint.
2) This deal would have to be approved by federal regulators, and this is not by any means a given. As the article states, Bill Kennard, chairman of the Federal Communications Commission, said, We cannot allow any merger to happen in this industry that turns back the clock on that competition."
In my humble opinion, those are two pretty damn big IF's.
Sprintlink has been a major bottleneck for
me for a long time. If it weren't for the
reduced competetition, I'd be saying:
Die Evil Sprintlink, DIE.
But monopoly is no good either. What's better,
cheap and shitty service, or expensive and good
service? Well expensive and unknown actually.
Can't see how it'd get worse than sprintlink though.
When MCI and WorldCom merged, my company couldn't talk to anyone for a full 18 months!! We signed a three-year contract in April 1997, so we can't change services until next April. We've been taking bids and MCI seems to have the absolute worst pricing...
But what about the MCI frame relay outage? A full week, and they continued to lie to their customers about it! "It'll be back up in an hour," when they knew they had lost a major piece of equipment!
I'll go with *anyone* but MCI, and until today, that included Sprint!
This is not good news for any company that would like to enjoy good service at a competitive price.
The telecomm industry is weird (though no weirder than other industries, I'm sure...)-- here's a good example:
Cincinnati Bell, formerly owned by "Bell" (along with Bell Labs, AT&T, et al), now independant. Owns Cincinnati Bell Telephone (CBT), a local telephone company. Also owns Cincinnati Bell Long Distance (CBLD), a long distance carrier competing in some cities (including Cincinnati) with AT&T.
CBT has a relationship with AT&T, and shares switches with them. Also uses AT&T's wireless PCS network, providing national coverage. If you call AT&T for long distance service, the salesrep will hand you a card with Cincinnati Bell's logo on it, as well as AT&T's. CBLD bought IXE, and can now offer frame relay and dedicated long distance services in many major cities.
If you call CBT, they'll recommend AT&T for LD service. CBT can't provide long distance service (though most Local Exchange Carriers can nowadays) because of their relationship with ATT. ATT can't provide local service correctly-- if someone wants to call you, they'll have to dial 1-NXX-NXX-XXXX, and pay long distance charges for a local call!
WEIRD!
Hello little man. I will destroy you!
One MILLION dollars! ...
... I mean
One... hundered... BILLION... dollars!
Coincidence?
Jeff Higgins
www.hal9000.cc
- el jefe -
www.hal9000.cc
<RANT>
And exactly who is this merger supposed to benefit?
Certainly not me. I just lost another long-distance company from which to choose. And it was one of the better ones. Now we're left with the whose ethics have been, at best, grey.
GTE/Sprint laid down a brand new fiber network, anticipating bandwidth demands of the future. Meanwhile, MCI, you may remember, is the company that invented slamming (changing your long distance provider behind your back). They also invented "Friends and Family," marketed as a way for you to get marginally cheaper LD service, but was in reality a way for them to get priceless demographic data: A fully connected graph of who knows who.
I fail to see why Sprint saw the need to sell out. Bigger is not better. Service is not going to get better. Phone rates are not going to get cheaper (in fact, I wouldn't be surprised if the "costs" of the merger were passed on to MCI/Sprint customers).
My cynical nature suspect this deal was done just to make a few dozen rich executives even richer. Can someone help me understand how this is a good thing for me?
</RANT>
Schwab
Editor, A1-AAA AmeriCaptions
Hey, I even own some FON (Sprint) and PCS (Sprint PCS) stock, and I think this is bad idea. Set aside the long distance telephone service stuff (which is a whole other topic), and just look at the Internet side of it. A combined Sprint/MCI WorldCom would have control over way too much of the Internet.
MCI Worldcom has UUNET, as well as what was ANS, and they provide network services to AOL. The run some of the MAEs. They have lots of connections and POPs outside the US, too. They are probably providing backbone services to about 25% of the Internet (they were backbone for 20.45% of the ISPs in north america according to the winter 98 boardwatch directory). They are just huge.
Sprint IP Services is the backbone for another good chunk of the Internet -- probably another 25% (22.39% of the '98 NA ISP market per boardwatch). Sprint runs the New York NAP. They own a 28% stake in EarthLink, btw, (prior to the EarthLink/MindSpring merger). Post merger, EarthLink will have about 3 million subs, which they say will make them the #2 dialup ISP in the world.
So, post-merger McISprintCom would be providing backbone services to something like 50% of the other Internet providers in the world, including AOL (12+ million subs), and will have a "broad business relationship" with EarthLink (3+ million subs).
And this is just counting backbone connections for ISPs and some of the subs -- I imagine that in terms of actual flow of packets (total sent/recieved on the whole network, transit and peering arraingments) they would have a bigger percentage, because WorldCom/UUNET/ANS and Sprint also have (as far as I know) the majority of the really fast pipes (OC-48s and OC-192s) on the Internet, and the BFRs to go with them.
Hmm, talk about a good company for the NSA to buddy up to for installing packet sniffers....
Just as MCI was forced to sell of Internet business of MCI (to cable and wireless) before the MCI/WorldCom merger was completed, they will probably be forced to sell off some of their Internet provider holdings -- they question is, who will buy them, and what sort of new mess will that be?