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AT&T != Ma Bell

As a refresher, the original AT&T agreed to divest its local service monopoly as a result of a court-ordered breakup in the 1982-1984 time frame, which resulted in multiple regional Bell companies (RBOCs) being established to serve the local calling and infrastructure needs of different parts of the country. AT&T retained its long distance business (joined by new competitiors in the form of MCI and Sprint), which all parties assumed would continue to be a very lucrative field--long distance was even used as a carrot for the RBOCs, who were told they could only enter that sector once they had sufficiently opened their local calling markets to competition.

AT&T also retained its equipment business and the Bell Labs research organization, but eventually spun those off into a new company called Lucent in 1996, although it was eventually sold off and then merged with Alcatel in 2006, due to a continuing string of losses. By that point, AT&T's only real line of business was long distance service and commercial voice and data networking.

Unfortuntately, long distance didn't stay lucrative, and an abundance of price-sensitive pricing packages made it almost untenable. In particular, , packetized voice technologies started to appear in workable form, and new competitors were able to offer local and overseas long distance for just pennies per minute. This made long distance a dead-man-walking business for phone companies, with MCI and Sprint turning their focus to other lines of revenue, and with the RBOCs deciding that they didn't really need to worry about getting into the long distance market after all. By 2004, AT&T walked away from residential long distance, leaving the company with just its commercial networking business, and by 2006 the remaining parts of "Ma Bell" were acquired by SBC (one of its former RBOCs) at a bargain-basement price.

Although SBC took on the AT&T brand name, the old Ma Bell was officially dead and buried at this point. It simply didn't exist anymore in any tangible form--it doesn't even offer residential long distance as a discrete business, and only offers any kind of residential service by virtue of the fact that its new parent offers them. And that there even continues to be an entity called "AT&T" is only because SBC chose to use that asset for brand awareness purposes, but folks by no means should be thinking about the resulting entity as "Ma Bell"--that outfit is long gone.

Recently, the AT&T name has been in the news as a result of SBC acquiring BellSouth, which is naturally reported as AT&T acquiring BellSouth. This has been accompanied with a lot of public heart palpitations about the ghost of Ma Bell rising to reassert herself in the industry, although nothing could be further from the truth. This is most emphatically NOT a case of AT&T buying up RBOCs, as is commonly reported--Ma Bell is dead and buried, and only the AT&T brand name lives on--but instead is is a merger between two RBOCs (and a consolidation of their cooperative businesses, such as their jointly owned Cingular).

Mergers between RBOCs aren't entirely uncommon or unprecedented, either. As one example, consider the string of mergers throughout the 1990s between the NYNEX and Bell Atlantic RBOCs, plus the independent GTE (and others), as well as the acquisition of MCI in 2005, which has produced the multiservice megalith that we now know as Verizon. That company has local service monopolies along the densely packed Northeast corridor, national long distance, a majority-owned cellular company, and a large private networking business, among others.

Do you see much of a difference between Verizon and the organization that will result from the SBC-BellSouth merger? The only substantial difference that I can see is that Verizon doesn't call itself AT&T, which is apparently enough by itself to get some people overly excited.

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