Ma Bell's big purchase

A gamble: AT&T is betting that cable television is the future of American communications.

May 11, 1999

BY ACQUIRING MediaOne Group Inc., AT&T has dramatically regained access to most of America's households.

When AT&T's monoply was ended in 1984, the goal was to promote competition in the nation's telecommunications industry. Then, when Congress deregulated the phone industry three years ago, it believed that unfettered competition among dozens of companies -- AT&T, the regional Bells, wireless and cable companies -- would provide Americans with leading-edge products at competitive prices.

That goal has yet to be realized, and AT&T's access to 60 percent of the nation's households through cable television lines may further stymie competition. Ma Bell, which would control the largest number of cable lines, would be able to provide not only local phone service but high-speed Internet connections, interactive video, high-speed data and cable service across the nation. But much of the technology to deliver these services through cable television conduits still must be developed.

To survive, the Baby Bells, which continue to have a lock on local telephone service, will have to develop technology to provide those same services through their existing phone lines. As a result, AT&T's bold move could spur consolidation of regional phone companies.

The federal government's job must be to ensure that competition survives.

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