AT&T

History & Irony:

A small item of today's news: AT&T to purchase BellSouth. I can't help but notice how nearsighted the article is. "AT&T was formed by San Antonio-based SBC's acquisition of AT&T Corp. in November," it says.

Well, yes, sort of. The details are right, if your only interest in the question is in tracking the here-and-now status of the telecommunications industry.

AT&T is one of those few American companies -- like Colt or DuPont or Smith & Wesson -- whose corporate history is old and interesting enough to be worth knowing. Their corporate website has a history section, although the milestones page is better. AT&T "was formed... in November" only in the worldview of investment traders; for the rest of us, it was founded in the nineteenth century by Alexander Graham Bell. "AT&T became the parent company of the Bell System," the history page tells us, "the American telephone monopoly... The system broke up into eight companies in 1984 by agreement between AT&T and the US Department of Justice."

That's a little sleight of hand there: 'by agreement with the Justice Department,' as if AT&T had really been in favor of the idea. In any event, one of those companies was Southern Bell. I know because, when I was a boy, my father worked for AT&T; and later for Southern Bell; and later for BellSouth, but that gets ahead of the story.

Southern Bell broke up not too long after AT&T was forced to divest itself of the Bell System. The corporate structure, used to monopoly protections, started tossing out everything that wasn't immediately profitable. Three major spinoffs: the Southern Bell Corporation, BellSouth, and BellSouth Advertising and Publishing (BAPCO), which runs the Yellow Pages.

AT&T purchased the Southern Bell Corporation some time ago. Now, it's set to repurchase BellSouth. I recall the period of the breakup reasonably well, and I remember listening to many stories about how it was screwing up everything for everyone -- that the market wasn't being well served by forcing the divestiture.

Well, my father was apparently correct. After twenty years, AT&T will be back in charge. Was the exercise in free markets worth the chaos? That's hard to say; but the system worked, apparently and eventually, just as he said it would.