Lunch at the Labs

WorldCom and AT&T.

Mixed in with the news about the downfall of WorldCom and the collapse of its stock, are some stories about how this will help AT&T. Although there may be some short term benefit to AT&T, I think the ultimate winner(s) will be the so-called local phone companies.

The problem for AT&T is that due to technological and legislative forces, stand-alone long distance phone service is a dying business. And anyone who still thinks AT&T can successfully get into new businesses should check their track record. AT&T's real competition is the Baby Bells and their local monopoly and not WorldCom.

If the Telecommunications Act of 1996 were enforced as intended, AT&T might have a chance. But what I see happening is that Congress and the current administration will allow one of the baby bells to "save" WorldCom and this will make it possible for another baby bell to buy/merge with AT&T. Congress and the administration will permit this as a way to effectively repeal the Telecommunications Act without having to admit that it didn't work and they screwed up.

Posted by mjm at July 9, 2002 08:08 PM