Bye-bye BellSouth

Matt Towery
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Posted: Mar 09, 2006 12:05 AM

It's either a historically brilliant move in telecommunications history or another widening of the hole through which Deep South support for Republicans and the Bush administration may drain.

 The announcement that AT&T would seek to purchase BellSouth, formerly Southern Bell and part of the monopolistic Bell system of years ago, came as no surprise to industry insiders.

 For those who follow the industry on a more casual basis, it was a shock. The implications of the deal, which would make AT&T the dominant force in telecommunications once again, are many.

 For starters, BellSouth, which has been an economic and civic cornerstone in major cities like Atlanta, Jacksonville and Birmingham, will cease to exist. That means the end of many jobs, not to mention the company's participation in local philanthropic efforts and the prestige of these and other cities hosting a southeastern-based telecommunications giant.

 Paint it as you will, fire up the smoke and mirrors, but every experience in the past suggests there will be a trail of tears, primarily dampening the soil of the southeast, following this mega-deal.

 From a shareholder's standpoint, it may make complete sense. Texas-based AT&T, an aggressive rework of the remnants of the ravaged original combined with other telecommunications companies, has emerged a potentially successful telecommunications giant.

 BellSouth, which had all the advantages over its rivals just a few years ago, sat by as a sleeping giant, allowing others to gain ground. Now its top management is enjoying the cream from the deal -- the success of other companies, absorbed in a glorious new purchase price.

 But what of customers? Workers?

 Customers will likely suffer little denigration, given the fact that both BellSouth and its much-celebrated joint wireless venture with AT&T, Cingular, are already notorious for poor customer service and disorganization.

 I, personally, would rather have a root canal than enter a Cingular store to try to exchange, upgrade or even cancel my long-standing agreement, which guarantees me continually dropped signals and poor customer service. Make that pitiful customer service -- confused, delayed and often downright surly.

 (Think this is just my opinion? There are reams of marketing research that back my claim. Not to mention the endless anecdotal complaints many of us hear from those who must suffer Cingular's service system.)

 As for home telephone service, perhaps AT&T will be a step improved over BellSouth's "we'll-get-to-you-when-we-get-to you" attitude that follows storms, power interruptions and any time the wind blows over 10 miles an hour.

 While other utilities have learned to tell long-suffering customers how long they will be stuck on the phone begging for service, BellSouth routes you to god-knows-where, for few if any answers. Over the past six years, I have, in my own home, experienced telephone service interruptions for not just hours, but sometimes for nearly a week. And I am not alone.

 So perhaps the great national AT&T can rescue a BellSouth whose leader has clearly had his eye on the prize -- a highly successful and lucrative merger and acquisition, which will only add to the tens of millions of dollars that he and a handful of others have gained while serving as "stewards" of BellSouth.

 The rub in all of this is that leaders of BellSouth and AT&T have placed the highly vulnerable Bush administration in a tenuous situation. Until now, mega-mergers of telecommunications companies have been given the thumbs up virtually pro forma, not only by those who regulate them on the state level, but also by the Federal Communications Commission. But now political pressure and the whims of fate have potentially shifted.

 What are senators and congressmen from key electoral states such as Georgia, Florida and South Carolina going to tell their constituents when their jobs are left in the air and the southwestern United States now controls their fates?

 How does one explain to investors and consumers the crazed rebranding of AT&T Wireless as Cingular, and then, reportedly, back to AT&T Wireless again? Does this mean dropped signals and endless waiting lines for many Americans?

 And whom do we call for help? AT&T, BellSouth, Cingular or some new brand invented in a board room in an effort to make a deal more accretive?

 Those who believe the AT&T gobble-up of BellSouth will be welcomed, politically or otherwise, with open arms may well be right. Then again, in light of an administration locking horns with its own Congress over an ill-conceived port authority transfer, this may be the moment when public opinion meets midterm elections and attention moves from Capitol Hill to the boardroom.

 There is no question that the various leaders of these two publicly held companies are acting in the very best interest of somebody. Who that somebody is, we just don't know yet.