Ma Bell: Why AT&T Might NOT Buy T-Mobile

Posted: May 6 2011, 1:55pm CDT | by , in Rumors | Technology News

 
Ma Bell: Why AT&T Might NOT Buy T-Mobile

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The Senate seems pretty skeptical.

AT&T started life as ABTC, the American Bell Telephone Company. American Bell was the first telephone carrier in the entire world. It was founded by Alexander Graham Bell in 1877 and enjoyed a total monopoly until Bell's patent expired in 1894. Six thousand new carriers popped up to try their hand at the market, and American Bell ended up purchased by its own long-distance subsidiary, American Telephone & Telegraph.

So if you've ever wondered what AT&T really stands for...there you have it.

In 1907, Teddy Vail became the president of AT&T. They didn't use the phrase 'mission statement' back then, but Vail had one hell of an ambitious motto. "One Policy, One System, Universal Service". The company grew by leaps and bounds, buying up smaller carriers and rivals like Western Union Telegraph. This got the government all agitated, so in 1913 AT&T agreed to something called the Kingsbury Commitment. They sold their Western Union stock and agreed to avoid acquiring any other companies without government permission.

AT&T also had to allow competing carriers to interconnect with their network. Which wasn't a such a big deal, as Bell Systems now controlled most of the nation's phone service. From 1934 on, AT&T existed as a 'Regulated monopoly". Virtually all telephone service in the country was provided by "Ma Bell". As the only game in town, AT&T was able to bleed customers with things like extra charges for non-Bell phones. Before long, telephones exploded into ubiquity and Ma Bell became the largest company on earth.

In 1984, the government went after AT&T with an antitrust suit. The company lost,. and ended up split into seven different regional holding companies. AT&T lost 70% of its value and went on as nothing more than another long distance carrier. With the coming of MCI and Sprint, 'Ma Bell' couldn't even claim a monopoly in that one sector. The seven regional 'Bells' were Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell, and U S West.

Southwestern Bell (SBC) eventually bought AT&T and took on the name once more. Pacific Telesis, BellSouth, and Ameritech all ended up folding back into AT&T. Much of the early 2000s was spent on the painstaking reassembly of Ma Bell. And now, with the acquisition of T-Mobile imminent, AT&T seems closer than ever to the end of its 27-year quest. But will the Senate allow it?

A casual glance at the official hearing notice makes that seem unlikely. The hearing's title? "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?" Which actually sounds more like one of my headlines than anything you'd expect from a Senate meeting.

The hearing won't open until May 11 at 10:15 AM, but that title is evidence of the kind of suspicion regulators are eyeing this deal with. A new AT&T monopoly is good for no one. And competition between two giants (by the way- Verizon was formed by one of Ma Bell's regional companies) doesn't do much to help customers. Here's to hoping this merger is met with the critical eye it deserves.

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The Author

<a href="/latest_stories/all/all/5" rel="author">Robert Evans</a>
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
Robert can be contacted directly at robert@i4u.com.

 

 

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