Billion Broadband Scandal", January 2006), Updated August
- AT&T SBC, Southwestern Bell, Pacific Telesis, Ameritech,
SNET, AT&T, BellSouth
- Verizon Bell Atlantic, NYNEX, GTE, MCI, Alltel
- CenturyLink Formerly CenturyTel and Qwest, formerly
They put Humpty Dumpty Back together again -- and it is to the
detriment of competition, broadband and the US economy.
For over 100 years, Ma Bell, sometimes called the "Bell System"
sometimes called "AT&T", controlled almost all telecommunications
in the US. Once the largest company in the world with over one
million employees, the company consisted of 22 local Bell companies,
(including New York Telephone and Ohio Bell), AT&T Long Lines,
(the long distance division) as well as Western Electric, (the
subsidiary that manufactured telephone equipment) and Bell Labs,
one of the premier research organizations.
Then in 1984, because of the monopoly control the company had
over phone service, the company was broken-up and the local Bell
phone companies were divvied up among seven, artificially created,
very large companies called "Regional Bell Operating Companies"
(RBOCs, pronounced "R-BOKS") or sometimes the "Regional Bell Holding
Companies" (RHC) and sometimes the "Baby Bells".
Each company controls specific geographic regions of the US.
For example, Ameritech controlled a five-state region: Illinois,
Indiana, Michigan, Ohio and Wisconsin.
This diagram gives the original
Baby Bells, the phone company(s) it controlled, and the state(s)
The original seven RBOCs were:
- Bell Atlantic
- Pacific Telesis
- Southwestern Bell
- US West
||Today, because of numerous mergers,
there are only 3 Companies:
However, there is mass confusion on the part of the customers, not
only because of these mergers, but also because of the various name
- AT&T was purchased by SBC Communications, which owned
Southwestern Bell, Pacific Bell, Ameritech, SNET, BellSouth
and AT&T, the long distance company. SBC changed its name
to 'at&t" (lower case.)
- Verizon, which owned Bell Atlantic, NYNEX, and GTE and bought
MCI, the former long distance company.
- CenturyLink merged with Qwest, formerly US West
||What's in a Name? Renaming the
Local Phone Companies
Over the last seven years, all of the holding companies removed
the local Bell name for the name of the holding company.
- New York Telephone became NYNEX, then Bell Atlantic and the
- Ohio Bell, Indiana Bell, Wisconsin Bell, Michigan Bell and
Illinois Bell were all renamed "Ameritech".
||Hundreds of Companies with RBOC
The holding companies own literally hundreds of other companies,
each with their name-brand.For example, here are just a few of
the NYNEX companies:
- Verizon Online
- Verizon Wireless (which is really a company called "cellco"
and owned by Verizon and Vodafone)
- Verizon Enterprise Solutions
- Verizon Business
||Two Bell Companies Escaped
||Cincinnati Bell and Southern New England Telephone
(SNET) were both spun off after the break-up. However, SNET was
acquired by SBC Communications.
||Other Local Companies
||There were over 1,400 other local phone
companies in 1984, including United/Sprint (renamed Embarq), Lincoln
Telephone or Rochester Telephone (renamed Frontier). However, the
number of independent companies has been diminishing For example,
GTE was the largest independent and was the size of one of the original
Bell companies. It was also a holding company, owning numerous local
telephone properties throughout the US, from California to Virginia.
As mentioned earlier, it is now part of Verizon.
||Thousands of Other Telephone Companies
||There are literally thousands of communications companies,
and their relationships and services they offer are at best, fuzzy
to the general public. Here's the basics:
||How Did Long Distance, AT&T
and MCI, Fit into this Equation?
Originally, the Bell companies were excluded from offering long
distance service. a "Long Distance" phone call
crosses state lines. A call from New York to New Jersey or from
Texas to Arkansas is a long distance call.
AT&T, MCI and Sprint were the largest long distance companies
in the 1990s. In 1996, the Telecom Act of 1996 formally
opened the Public Switched Telephone Networks (PSTN),
the local phone networks, to competition. The long distance companies
started to enter the local markets. Meanwhile, the Telecom Act
also allowed the Bell companies to enter long distance once the
networks were officially open.
Because of seriously flawed regulations and the power of the
Bell companies to control the regulatory environment, the long
distance companies were forced out of local service. Renting the
local phone lines became unprofitable. Meanwhile, by 2005, the
Bell companies have been able to garner over 60% of the long distance
market because they could upsell local and long distance as a
In the "Unauthorized
Bio of the Baby Bells" we argued that the Bells should
never have been allowed into long distance services until there
was stable competition. AT&T and MCI are currently sold, and
merged into SBC and Verizon, respectively. SBC has taken the AT&T
As we will discuss, local and long distance distinctions are
blurring its all just
electrons over wires or through the air. The companies that own
the wires can block competition, either through bad legislation
or "friendly regulators", who have essentially been
bought off or have not bothered to enforce the laws on the books.
In 2005, Verizon purchased MCI. SBC purchased AT&T and is
now called AT&T, thus killing off the 2 largest
competitors. AT&T and Verizon no longer compete, except with
||Other Important Distinctions: Local
CLECs (Competitive Local Exchange Companies)
There was another group of companies referred to as Competitive
Local Exchange Companies (CLECs) , who also offer local telephone
service. . Some companies have their own installations, while
other rented the networks from the Bell companies. Most companies
only offered local business services in selected area codes in
America. However, because of seriously flawed FCC regulations,
most of these companies were put out of business.
||D-LECS and B-LECs
There are other types of local competitors: For example, the
D-LECs (shorthand for Data-CLEC) offer primarily data or DSL services,
such as Covad , while the B-LECs (shorthand for Building-CLEC)
offer services by wiring buildings, such as ARC. Most of these
companies were also put out of business because of flawed FCC
||Verizon's FiOS and AT&T's U-Verse
in 2004, AT&T and Verizon announced plans to roll out cable/broadband
services. Verizon has deployed FiOS, a fiber-to-the-home service,
while AT&T rolled out U-Verse, a service that relys on the
old copper wiring.
As of 2010, the companies both claimed that they were no long
expanding their deployments of FiOS or U-Verse, having reached
about 50% of their customers.
Other Important Distinctions: Wireless
"Wireless," "PCS", "Cellular" "Wifi"
There are hundreds of other companies who offer a wide array
of non-wireline services, such as the wireless, wifi, PCS, or
cellular companies.However, over the last decade, there has been
a serious consolidation of these companies and today, Verizon
and AT&T are the largest wireless companies.
Originally, the Bell companies were given the wireless spectrum
for all of their territories -- for free. However, by the 1990's
the companies were able to merge.
- Bell South and SBC formed "Cingular", which was
renamed "AT&T once the company aquired AT&T wireless,
- Bell Atlantic and NYNEX spun off their wireless services to
become "Verizon Wireless"
- But there were many other deals to build these companies,
which should be thought of as playing cards being maneuvered.
In it's wisdom, originally there was only 1 competitor allowed
to the phone companies in each market, and the other players of
note were McCaw, and Sprint-Nextel and T-Mobile.
Today, Verizon and AT&T have about 80% of the marketplace
and as of this writing, Verizon has offered to purchase many of
the cable companies' wireless spectrum, which they purchase but
never fully deployed.
Wi-Fi and Municipality Community Buildouts.
Over the last few years, a number of municipalities have decided
to now wait for the Bell companies to deliver and have created
new community networks using both fiber optic cables as well as
wireless services, known as "Wi-Fi"
VOIP, "Voice Over the Internet Protocol" Services
A host of companies have started to offer "VOIP", Voice
Over the Internet Protocol, which uses a broadband connection
and the standard Internet protocols "IP", to offer voice
and data services.
VOIP is a technolofy as much as it is a service and many of the
traditional voice services, when offered in a package, are using