No Return of Ma Bell

Published March 27, 2006

Steven Titch ([email protected]) is senior fellow-IT and telecom policy for The Heartland Institute. The following letter was sent to The Chicago Tribune on March 21, 2006 and ran in the “Voice of the People” section on March 27, 2006.

Dear Editor:

In his March 21 letter [“Local Phone Service Competition in Jeopardy,” Voice of the People], Michael W. Ward misses the mark when he writes that AT&T’s proposed merger with BellSouth is a “disturbing development” because it will assume control of the majority of phone lines once held by the original Ma Bell.

Ward forgets that at the time of divestiture, AT&T had a total monopoly on phone service right down to the telephone in your home. There were no other manufacturers or choices. Cellular phone users numbered only in the thousands. The Internet was a Defense Department network. Broadband, cable modems, the World Wide Web, and VoIP did not exist.

Characterizing this merger as a return to the days of Ma Bell is self-defeating. Despite more than a decade of carrier consolidation (and a decade of these dire predictions), broadband prices continue to drop and competitive alternatives flourish. Comcast, Covad, EarthLink, Google, Sprint Nextel, and Vonage are just a cross-section of solid companies that are amassing market share at the expense of the divested Baby Bells.

Times have changed. Rather than hurting consumers, a combined AT&T-BellSouth is exactly what’s needed: a broadband competitor equal to the national cable companies in size and strength. This means lower prices and faster buildout in underserved areas. The broadband supply chain has become too large and diverse for even a merged AT&T and BellSouth to drive out all competition. The monolithic Bell System is never coming back.

Steven Titch
Sugar Land, Texas