AT&T Euthanized, Will Be Missed

Quick, Humane End

AT&T’s twenty year death spiral has finally come to an end.  Once the largest company in the world, last week it was acquired by SBC, one of the Baby Bells spin-offs from the government mandated breakup of AT&T in 1984. The child bought the parent.

A shadow of its former self, AT&T was acquired for $16 billion (or roughly a quarter of Google’s current market cap.) It will be interesting to see what will happen to some of AT&T’s forward-looking projects.

Relaunch of AT&T Wireless Now Unlikely

To the great confusion of consumers everywhere, AT&T Wireless and AT&T were separate companies. When AT&T Wireless was purchased by Cingular recently, the AT&T name reverted back to AT&T.

For the past few months, rumors had it that AT&T would relaunch the the AT&T Wireless brand through an MVNO partnership with Sprint. It seems safe to say that SBC, which is a 60% owner of Cingular will kill this project. (If they wanted to do something creative, SBC would relaunch AT&T Wireless as an MVNO for senior citizens, an overlooked segment to whom the AT&T brand holds significance.)

Cloudy Future for AT&T’s Consumer VoIP Play, CallVantage

As a regional bell operated company (RBOC, also sometimes called an incumbent local exchange carriers, or ILECs) SBC does not see voice-over-IP (VoIP) as an imperative. AT&T’s consumer VoIP offering, CallVantage, is actually quite competitive .

However SBC will likely squander the opportunity to embrace their inevitably digital, VoIP future. Instead, they will worry about cannibalizing their high-margin, but rapidly shrinking local phone business.

Om Malik points out another factor confounding SBC’s adoption of VoIP may be AT&T’s willingness to cozy up to cable operators in order to speed the adoption of CallVantage. The RBOCs are sworn enemies of the cable companies, so it is unlikely that these partnerships will continue, thereby clouding the future of CallVantage.

 We Will Miss Their Intellectual Property Firesales

AT&T’s Bell Labs was the premier research and development institution for much of the 20^th century. For a variety of reasons, AT&T repeatedly failed to capitalize on technologies developed by Bell Labs. Areas where Bell Lab’s researchers made substantial contributions include semiconductors, voice-compression and cellular technology.  The invention of the transistor earned Bell Labs the 1956 Nobel Prize.

Instead of commercially exploiting the intellectual property (IP) generated by Bell Labs, AT&T either gave it away or licensed it for a nominal sum. The world was enriched by this intellectual property -- the creation of billions if not trillions of dollars of weath stemmed from Bell Labs. We would not recognize our telecommunications world today had AT&T followed the modern IP strategies of firms like IBM and Microsoft, which many argue hinder innovation.

Comments

[Mark S.]

Bell Labs is still up and running, only it is in AT&T spinoff Lucent since 1996.

[Jon]

True, though since Lucent does not have the conflicts of interest (namely antitrust concerns) that Bell Labs had when it was still part of AT&T, Lucent does not give away its intellectual property.

Also, I think Bell Labs dropped most of its basic science research when it was spun off as Lucent.