Friday, January 28, 2005 - The Progress & Freedom Foundation Blog

SBC to Swallow AT&T?

Nothing signifies the seismic changes in the communications landscape than the reported merger talks between SBC and AT&T. A merger that then-FCC Chairman Reed Hundt once deemed "unthinkable" now draws a yawn in telecom circles, with the speculation only tending toward whether SBC will overpay for the declining business of AT&T.

The interesting policy point here is how dramatically our definition of markets has changed. This once would have been a vertical merger for SBC into the long distance market, but that market is rapidly disappearing altogether. Instead, for antitrust purposes, it appears to be a simple horizontal merger in the enterprise market -- and this is a market with multiple players and even more potential players as VoIP gains a foothold.

Given the historic bad blood between these companies, I can also imagine that the lesser angels of Mr. Whitacre's nature will enjoy some of those Donald Trump moments if the acquisition is consummated: "You're fired!"

posted by Ray Gifford @ 1:32 AM | Communications