Big article today in Forbes regarding the AT&T buyout of Bell South and the motivations for it. In a nutshell, it's obvious to EVERYONE that traditional telephone service can no longer support a company. To survive, AT&T, Verizon, and Qwest (the only major players left) have to offer more services, including Internet, television, mobile, and others.
This got me to thinking about how things go in circles sometimes.
Back in the mid-90s, when AT&T made it's first bid to dominate the digital home, I was a big fan of their efforts. To me, the combination of AT&T's traditional telephone service, along with their then-newly acquired mobile service (called AT&T Wireless in those days), and, more importantly, the cable television service they had just acquired from TCI (changed to the monniker AT&T Broadband if memory serves) presented an enormous opportunity for Ma Bell to make some exciting things happen.
The thinking in those days of yore was, to be successful, you had to control the "last mile" of wire, into the consumer's home. AT&T Broadband had that, and it was a much-superior pipe, bandwidth-wise, than anything the Regional Bell Operating Companies (a blast from the past - RBOCs) like Southwestern Bell (remember them?) or NYNEX (zowie - there's a stroll down Amnesia Lane) had in their arsenals. AT&T had a big, fast broadband connection into millions of homes to deliver great stuff like video-on-demand, interactive television, high-speed connectivity to the entire world through your computer, television, security system, microwave oven, and hot water heater. Jetsons, here we come!
I was a huge proponent of AT&T's plan, and a customer of every single one of their divisions. And what did that get me? No discounts, no preferential treatment, incredibly confusing and screwed up billing, and no additional services. In other words, NOTHING.
AT&T could never figure it out. They were never able to combine any operations across services, never able to offer consolidated billing, never able to leverage customer information across divisions, never able to deliver on the enormous potential they had in the palm of their hand.
What a disappointment.
AT&T failed in every way you can imagine. And it cost them their company. AT&T Wireless is now part of Cingular. AT&T Broadband is now part of Comcast. No one buys long distance service anymore. AT&T just about ceased to exist.
But it didn't go bye-bye completely. Enough of the company survived to be purchased late last year by SBC. The leadership at SBC was smart enough to realize they had played out the SBC name by pissing off their customers for so long, so they wisely took the more universally-known AT&T brand. And now, with the acquisition of Bell South, AT&T is back full-force.
The strategy is the same as it was back in the 90's. Control the "last mile" and offer a ton of services. This time, it will be IP- and fiber-based, which should be better than the old coaxial cable method they tried w/ AT&T Broadband. And the rest of the entertainment industry has caught up in terms of content and devices.
Comcast, Cox, Verizon, and the others (if there are any) will be right in AT&T's grille, vying for the same market and offering (essentially) the same services using different technology. Who gets there first? Who bets on the right technology? Who can integrate it all and make it easy for the customer?
Will it work this time? It will for someone. Will it be AT&T? I doubt it - every company that has been rolled up to form the new AT&T has a track record of under-delivery, underperformance, and failure. Comcast, Cox, and Verizon are no better. Each has a ton of baggage in the form of disgruntled customers and former customers to overcome.
So who does make it work? It will be someone you're not watching right now. Google, Yahoo, Microsoft, Apple, or someone you've never heard of.
The past 5 years, despite some big advances like HDTV and ubiquitous broadband, have been disappointing in the evolution of the digital home. The next 5 years look very promising to me. Stay tuned.
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