The news coming out of the New York business press this weekend is all about AT&T; hooking up with Bell South. It seems like only yesterday that the SBC / AT&T; deal closed – actually, it was November 18, 2005 – a little more than 3 months ago.
Remember back to January 1, 1984? That was the date that AT&T;’s divestiture took effect, creating 8 companies from the old Bell System: AT&T; PacTel; USWest; SBC; Bell South; Ameritech; NYNEX; and, Bell Atlantic. Divestiture was the made-in-America solution to foster a more competitive telecommunications landscape.
At the time, the idea was that the Regional Bell Operating Companies would lose their natural incentive to discriminate against new entrant long distance companies if they were divested from AT&T.; Divestiture was an experiment that was unmatched in the rest of the world. In many ways, global carriers were envious of the opportunities afforded to US players: access to the local infrastructure on an equal footing. Still, observers always felt re-entry into the long haul business was the long term objective of each of the Baby Bells.
It seemed like Bell South has been the proverbial bridesmaid to all of its siblings. On June 30, 2000, USWest was first to marry a non-sibling – when Qwest was looking for a ‘real’ business upon which to anchor its dot-com riches, it bought its way into respectability by acquiring one of the AT&T; offspring. The year 2005 brought together MCI and Verizon (the year 2000 merger of GTE and Bell Atlantic which had acquired NYNEX in 1997) and the mating of AT&T; and SBC by now having swallowed up its siblings PacTel (1997) and Ameritech (1999).
That leaves Bell South as the sole regional carrier without an integrated national or global network. Hence the attraction of an AT&T; courtship.
For more than 20 years, the US has given the world an experimental lab to monitor structural separation as a model for the development of competitive communications infrastructure.
The Bell breakup has been a catalyst for more than 20 years of telecommunications innovation and the impact has been felt around the world. Whether it was the technology investment roller coaster ride of the past decade; the globalization of supplier choice; every person on the planet has been impacted by the breaking up of the integrated Bell System.
With the enabling democratization of IP networks, as far as customers are concerned, the network is defined by access. Customers will choose between wireline and wireless, whether or not mobility is required. Competitive choice of access will be provided by cellular providers, cable companies, traditional phone companies and the emerging force of community sponsored networks.
However, customers may not necessarily buy their services from a facilities-based carrier. Just as we have seen for the history of competition, resellers have become a legitimate competitive option for consumers – residential and enterprise alike. The terminology is now Systems Integrators and MVNOs: Mobile Virtual Network Operators, but the concept remains the same: resellers that provide customers with creative packaging, greater responsiveness, flexibility and increased choice. With consolidation among the traditional carriers, such reseller options serve to discipline dominant carrier abuses.
For more on this subject, please see our papers: From Intelligent to Irrelevant Networks and Guerilla versus Gorilla Telecom or be certain to attend the Professional Services panel at The 2006 Canadian Telecom Summit.