« AT&T and BellSouth Merger - Analysts Speak Out | Main | NW Wide Area Networking and Convergence e-newsletter »

AT&T & BellSouth - Impact on the Enterprise/Corporate Network?

My ultimate concern about the proposed merger, essentially rebuilding a substantial portion of the 'Bell System," is the impact on the enterprise/corporate network. Back in the early 1980s, when data nets were first being built, they were - for the most part - what we would now call "managed services." In the intervening twenty-plus years, however, we moved to an era in which companies began to "BYOB," meaning "Be Your Own Bell." Some of this BYOB attitude was to gain additional features and function, and some of the attitude was necessitated for survival.

Much of the popular press coverage about this merger has focused on "triple play," cellular, and access to residential customers. And while these are extremely important issues, I'm left wondering what the impact is for the members of the Webtorials community who are primarily responsible for corporate networks.

One view is that this should simplify networking by making "one-stop shopping" simpler than ever. Additionally, the creation of even stronger service providers might increase your comfort level with moving to "managed services."

At the same time, one could also argue that this will lead to less competition, thereby slowing innovation and leading to increased prices.

At this point, though, I invite you - the corporate and enterprise planners and management - to share your views. These views will be available in this forum, and we'll also share some of the views with the wider audience of readers of the Network World Fusion WAN and Convergence newsletters.

To add your views, simply click on the "comment" link below.


Having been a customer of both for voice and data I can't say I'm too thrilled here. AT&T consistently underperforms in the customer service. And as someone who has been a vendor and sold into large ISPs I am convinced that they rarely "get it right" when merging networks and services. Oh well, I used to say that if AT&T can't show a billion in revenue they aren't interested. (How's that cable tv thing working out for them?)

Vigerous competition over the last 20 years has fragmented and weakened the telecommunications infrastructure in this country. This merger will strengthen and enhance the security of the domestic network and prevent problems like those the shipping industry is currently experiencing. There will still be plenty of Cable and LEC competitors after this merger is complete.

I guess people have forgotten where AT&T was before the FCC decided to break the "Monopoly" up to begin with! Controlled everything from the switch to the wall jack. Then they decided they wanted part of the pie which IBM owned backin 70's and 80's!

Now they see all the dollars floating around with Cable, Cell phones, IPOD's, etc and now they decide they want to again dominate the landscape and control the telecom landscape again!

If it was a monopoly and violated anti-trust laws back then, then it should be considered under the same laws and regulations now! I do not care if they are controlled by SRB, the rest of the Baby Bells or AT&T. This should NOT be approved!

EX-AT&T guy who is old enough to remember what happened to AT&T, Bell-Labs, Western-Electric, Nausau Smelting and the various Baby Bells when it all went south to begin with!!

Here is the url for the best editorial I have seen on this proposed merger:


Can't disagree with anything the columnist says

My concern is quite similar with the article comments. However not mentioned is the fact that while reducing choices it also have a impact on the quality of service. Both AT&T and SWB have poor income statements today. BellSouth is a laggard in new solutions/technology and has a poor to medium service quality. Just call one of their help desks and see for your self. In addition all have accounting and technical systems that do not communicate. Follow a service ticket from it creation to the technician and then on to a reporting system and you will see multiple old architecture that have no integration to each other. A example of lack of investment in their own companies. Only concern for their investors which is often a short term answer.

Lastly as we reduce service choices and companies we will have areas that we will be stuck with no other product/service choices. It's a known fact that large company's play off service and offerings prices to reduce competition. This merger will only fuel this effect.

As a user, my concerns are not centered around "how" the service products are manafested. My interest is in their availability at a compeditive fee. Only the customers can establish what constitutes an acceptable cost. If the retrun on investment argument can be successfully embrased by the users, the service will sell. More, faster, cheaper, always sells. The challenge to the industry users is not "how" the providers find value for their users and shareholders, but where to find that value. Todays users easily find market price comparison information. If providers create islands of price-gouging afforded by territorial dominion, their market share will suffer. If providers use orders-of-magnitude of effeciencies found in expanded business models, and pass them to customers, the market will most likely balloon into a progressively expanding and profitable service.

Could it just be, that the effect of, market saturation is kicking in? Long distance revenues are now a distant memory.
The potential for growth more or less mirrors population growth , not the double digit growth that investors love. And maybe, just maybe, the single digit growth is what we now need to save our industries, force telecom service providers to deliver the service they offer, instead of just talking about it - whether or not is uses legacy technology or something more glitzy.
Devolving the responsibility to provide efficient telecom service to users in a large enterprise to a telco, is an abdication of the duty and care on the part of the responsible telecom manager.
I'm not convinced that the merger will do anyting to improve service delivery.

Ridiculous. AT&T's acquisition solves exactly nothing. The long distance market evaporated because each of the players had no natural advantage - no monopoly to live off. So naturally our economic system would encourage a race for over-investment in capacity (just like steel, cars, fast food restaurants and other unregulated industries).

Of course, the RBOCs had that advantage, and although it's not clear that their shareholders profited all that much, they sure did manage to survive.

So, where's the competition and innovation to come from going forward? What exactly is the benefit of scale in a locally-delivered service - the last mile? Lower cost materials? don't think so. Lower cost service? don't think so. Innovation? don't think so. Competition? don't think so.

AT&T acquisition? - don't think so.

What I'm really looking forward to, is the pressure this puts onto the cablecos and their Sprint/Cable effort. The cable companies, teamed together, now represent the best opportunity to drive competition in the business sector against Verizon and AT&T. We need to keep a third player in the mix, and I'm not seeing it from Qwest.

Bruce Kushnick’s new book, “$200 Billion Broadband Scandal” (http://www.newnetworks.com/Scandalreslease13006.htm) raises important concerns about this with his micro-history of past behaviors and broken promises that cost us all money due to higher rates – over $200 Billion – and damaged our economy – by about $5 Trillion. He says the Bells made promises to get regulatory concessions that they didn’t keep. By now, some 86 million households should already have broadband service capable of 45 Mbps in both directions to handle 500+ channels of HDTV and be deployed in rural, urban and suburban areas equally. These networks were to be open to ALL competition, but with each merger, the fiber projects were all cancelled. So, this could be one of the largest scandals in American history – bigger than Enron or Worldcom – since it impacts every aspect of the future of broadband in America – from municipalities laying fiber or building Wi-Fi networks, to the issues surrounding Net Neutrality, VOIP, cable services, the cost of local phone service, the new digital divide, and even America's economic growth.

Two interesting questions were posed.

1) Is the proposed merger of AT&T(nee SBC/AT&T) and Bell South good for enterprise customers.

I would answer yes and no. The ongoing rebuilding of the Bell System SHOULD provide benefits of economy of scale. But the Bell System was notorious in the past for keeping those additional profits for themselves and not passing the savings of new technology on to customers. You can cite numerous examples where profits were not passed on to consumers but were used to acquire other companies, many of which failed. The ONLY thing that seems to make the Bell companies respond is fear of competition. That is why they were divested in the first place.

(2) What will happen to Verizon, AT&T and Qwest?

I left the Bell System in 1979 after more than a decade there and I watched the breakup and ensuing confusion for consumers. I said then, and I repeat it now, AT&T is attempting (and I believe successfully) to rebuild the Bell System, piece by piece. I do not think you will see an oligopoly. I think that the merger of Verizon and AT&T is the next step. If the FCC approves, (and in a Bush administration, I think that is likely), then you will see them absorb Qwest as well. It will all be justified by the alleged competition of the Internet and the cable companies.

Lest we not forget that the telecommunications environment is dramatically changed from that of pre-divestiture. New and distruptive technologies are readily available from multiple providers in virtually all sectors of the industry. Plus, we still have at least three major marketshare holders for enterprise networking needs in each of the following: voice, data, internet and wireless services, not to mention a plethora of VoIP and cable providers. With that in mind, I believe there remains adequate competition to continue the downward price trend for major network services. Enterprises need to continuously monitor and mangage the life cyle of their contracts, seek input on current market place pricing at regular intervals, and, re-negotiate often.

As a telecom professional who started in the industry in late 1983, I've seen the whole evolution of the telecom industry.
AT&T was broken up for a reason. Anybody who thinks they would have eventually come up with ANY of the innovations we have today is kidding themselves.
AT&T and the RBOCs only come up with a new product or service when they're forced to and even then, in the face of the competition, try to charge top dollar for it.
The Telecom Act of 1996 may have produced a lot of benefits, but it also destroyed the level of cooperation that existed in the industry. Where once vendors on all sides worked with each other to get customers working, no longer.
I am very afraid that all we're accomplishing with these mergers is the slow, relentless rebuilding of Ma Bell. I, for one, do not want my choices to be a Bell company who could care less what I want and a cable company who's too incompetent to provide it.

AT&T, Bell South and SBC as one company will mean higher prices for wholesale and retail customers and less innovation. Prior to the divestiture, the Bell companies were notoriously slow to offer new services or use small vendors. They went on their own when it came to new services. Their greatest innovation was a princess phone that wasn't black and 300baud modem service when the industry was already using 9600baud modems. They will continue to use Alcatel/Lucent as their major vendor and we will get IPTV whether we want it or not.

Post a comment