This story appeared on Network World Fusion at



'Net Insider

Oedipus techs


By Scott Bradner

Network World, 02/14/05

Scott Bradner


We all knew it would happen sooner or later - one of Ma Bell's kids is buying its mother (shades of Greek tragedy). But is Mom worth the price?


Here's what SBC will get for its $16 billion:


A very traditional telecommunications company with a solid infrastructure to support long-distance phone calls in a world where long-distance is a dying business and is being given away with many cell phone packages. It also gets a company with a plan in place to throw away all of the already amortized equipment and replace it with new and expensive VoIP gear.


A lot of corporate long-distance customers, most of whom pay very little per minute.


A substantial IP- and Multi-protocol Label Switching-based data network, which serves generally the same locations and offers generally the same services as Sprint and MCI.


The dusty wall plaques and empty corridors of part of a once-great research lab.


The ghosts of many failed dreams of leapfrogging technologies, including wireless last mile (one example, local multipoint distribution services broadband wireless), voice-over-cable (which was not VoIP), ATM as a customer service, Switched Multimegabit Data Services, Wi-Fi hot spots (with Cometa), etc., etc.


The ghosts of many failed attempts at content-based business models, including: publicly touting a decision to add The Hot Network, a purveyor of hard core pornography, to its cable TV offerings; a proposal that lasted about 10 minutes to charge its e-commerce ISP customers based on the value of transactions conducted over the 'Net; and more recently, plans to develop a content-aware network .


A brand name that was thoroughly trashed by its use on one of the worst-managed cellular services ever.


A boatload of fiber in the ground in a fiber-rich world.


A bunch of employees SBC has already said will get dumped.


The long-distance service on my home phone, which generates little revenue because of the calling package that came with my new cell phone.


To sum up, that seems to leave some not-very-profitable businesses in areas of strong competition, and a faded brand name that some observers thought might be dumped after the purchase. A good deal for the higher-level management folks at AT&T with their stock options and for anyone who bought AT&T stock in the middle of last year and hung on to it, but it hardly seems like a good deal for SBC.


One news story I read said that the "experts" felt that no one else would try to top SBC's bid - well, I guess so!


The folks at SBC who decided that the tarnished shell that is AT&T was worth $16 billion clearly are looking at different factors than I have been able to find. Or maybe they're using some of the distortion glasses I saw used many years ago at the Harvard Psychology Department that make everything appear upside-down.


Disclaimer: I'm sure Harvard appears upside-down to some people, but it's hard to tell after you have been wearing the glasses for a while. In any case, the above value judgment is mine alone.