All the King's Horses and All the King's Men

If I were a geneological expert, I would do a linealogy on the breakup of AT&T. The United States had spawned, through the miracle of capitalism, one of the most successful and enviable communication networks in the world. Ma Bell, in addition to making our phone system dependable and sure, was also the quintessential widows and orphans stock on which many a financial plan was built. Then along came MCI and Sprint, who decided they wanted a piece of the long distance action, and wanted to use AT&T's infrastructure to do it. The courts agreed, and in a monopoly busting frenzy, midwived the birth of Ameritech, Nynex, BellSouth, Bell Atlantic, Southwestern Bell, Pacific Telesis, and US West taking away "Telephone's" local service. AT&T kept the long distance business, while being forced to allow Sprint and MCI to use its telephone wires for their cut rate service. In addition, big, bad AT&T was subject to continual governmental supervision, while its new competitors could do whatever they wanted on the lines AT&T paid to build. Isn't America great?

It has been fun to watch what has happened since. It would be too difficult to name the mergers and aquisitions since the break up of Ma Bell. But let's give it a go. MCI was devoured by Worldcom, and Worldcom filed the second largest bankruptcy in US history right behind Enron. Sprint joined numerous alliances with companies such as Deutche Telecom and Nextel. Then, it was going to merge with MCI Worldcom before the bankruptcy, but it changed its mind. Good for Sprint. Sprint is now primarily a wireless company. Sprint is the lady who is addicted to cosmetic surgery. It has been nipped and tucked so many times, God only knows what's left and if it's real.

Now for the "Baby Bells." US West was the subject of a takeover battle between two fiber optic giants, Global Crossing and Quest Communications. Quest won and US West is now known as Quest. In 1996, Nynex and Bell Atlantic merged, and merged again with GTE to form Verizon, the then largest telecomunications company in the country. Meanwhile, Southwestern Bell, Pacific Telesis, and Ameritech merged to form SBC. While this was going on, Verizon merged with the just out of bankruptcy Worldcom that hid its shame by using the MCI brand name. Not to be outdone, SBC "merged" (really a buyout) with AT&T, dumping the SBC name and adopting the AT&T name and logo. In addition, today it was announced that the new AT&T is purchasing Bell South. AT&T is now, once again, the largest telecommunications company in the United States.

Did you follow that? Here is what it means to me. In 1982, when the government broke up AT&T, my local and long distance service provider was....AT&T. Twenty four years later, my local and long distance service provider is.....AT&T. During those years, cell phones and the internet have helped to reduce my long distance costs. The cost of my local phone service, however, went up dramatically after the break up, and is still high. And until recently, the "service" part of my local telephone service was noticeably absent, although I have to admit it has gotten better. You see, the local service was subsidized by the long distance service. The law of unintended consequences from the actions of reformers and do-gooders strikes again.

Now aren't you going to sleep better tonight knowing that while all the King's horses and all the King's men couldn't put Humpty Dumpty together again, Adam Smith's invisible hand and the laws of economics have reassembled Ma Bell? May she gently rock us all to sleep. On the other hand, why does the movie Young Frankenstein come to mind?