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Return of the Empire: #1 AT&T Just Swallowed Another Baby Bell
With Big Media on a down-trend the last year, America's largest communications company -- AT&T -- just got a lot bigger.
Suddenly, we're back to 1984 -- only instead of the Ma Bell kingdom/monopoly breakup, it's Baby Bell retaking the throne. Call it the "Return of the Empire" or "Big Media Sharking II".
AT&T announced plans to buy BellSouth in a deal valued at about $90 billion. The result would be a telecommunications behemoth with about $120 billion in annual revenue.
The combined entity will be called "AT&T" and be based in San Antonio, the longtime home of telecom giant SBC, which late last year purchased AT&T and adopted the AT&T name.
The merger would will cement AT&T's position as the No. 1 U.S. communications company. Verizon, is No. 2.
Consumer groups immediately decried the new deal as a reconstitution of the old Ma Bell phone monopoly. The Bell System was broken up by court decree in 1984. The divestiture set off AT&T as an independent long-distance carrier and created seven regional Bell phone companies.
Four of the seven Bells plus AT&T would now be part of the new AT&T and some consumer groups are concerned that will lead to higher prices.
"This is devastating for consumers," says Gene Kimmelman, public policy director of Consumers' Union. He says his group will ask the Department of Justice to block the deal. "It's an enormous mistake to allow this fraud on the American people to continue," he says.
With Big Media out of fashion lately and the controlling Republicans battling one controversy after another in government, will this deal slip through the cracks or will it get stomped on?
posted by Unknown @ Sunday, March 05, 2006,
