Liar, Liar, SBC's Pants on Fire ----Where's the Competition?
There are two reasons that there is no local competition today. The first is the documented harm to competitors and the second is the fact that SBC, the Bell company that owns three original Bells ---- Southwestern Bell, Ameritech and Pacific Telesis, as well as SNET, (Southern New England Telephone) never fulfilled their stated obligations to compete in 50 major cities by next year, including other parts of the country, and therefore other Bell companies. (See page 3 for a complete list.) In fact, by now, SBC was supposed to be competing in the Miami, Seattle and Washington. (St. Louis Post-Dispatch [2/5/99])
"SBC aims to expand to Boston, Miami, Seattle" "SBC Communications Inc., the No. 2 U.S. local phone company, said Thursday that Boston, Miami and Seattle will be the first three markets where it provides services as part of its plan to buy Ameritech Corp."SBC said in May that it will buy Ameritech, an acquisition currently valued at $81.7 billion, and named 30 U.S. local markets the companies would enter outside of their home regions under their "national-local" strategy."
These plans were based on SBC's claim that they needed to merge with Ameritech, one of the original Bell companies, to give them more cash for the undertaking. The Fort Worth Star-Telegram [12/01/98]
"Stephen Carter, president of strategic markets, said the plan is contingent on regulatory approval for SBC's proposed $77.4 billion purchase of Ameritech Corp., expected to be completed in the middle of next year."
The merger went through in October 1999 and the first three cities were supposed to be competitive "within a year" of the deal going through. (St. Louis Post-Dispatch [2/5/99])
"The three cities named will be the first targets, with service available within a year of the purchase, SBC said."
The deal of course went through, yet SBC has yet to compete in any of the cities mentioned. Had SBC done this plan, the price for local service should have decreased because competition would have lowered prices…
However, as we stated back in 1998, and we repeat today, we believe that SBC decided to pull a bait and switch --- they told the American public and regulators that they would give America competition in exchange for these mergers. Once the deal went through, they would claim that they could not go forward. They also knew that no regulator, including the FCC or any other group, would be able to or want to do anything about this. Any penalties would simply be the cost of doing business.
Will the FCC take action? According to the FCC merger condition SBC is to have 30 markets competitive within 30 months of signing --- October 1999. According to the FCC:
"21.Out-of-Territory Competitive Entry (National-Local Strategy) Within 30 months from the merger closing, SBC/Ameritech will enter at least 30 major markets outside of its region as a facilities-based competitive provider of local services to business and residential customers. "
However, the FCC did not take their own conditions seriously. Notice that there are penalties of $1.2 billion dollars if the company misses to enter the markets, but it is "voluntary".
"SBC/Ameritech is liable for voluntary incentive payments of nearly $1.2 billion dollars if it misses the entry requirements in all 30 markets. This condition will ensure that residential consumers and business customers outside of SBC/Ameritech's region benefit from increased facilities-based local competition."
And we all know that the Bell company will never pay anything, yet they will have been able to increase their own market dominance through the Ameritech merger. SBC once again played the American public for chumps.
(Source: SBC)
Markets where the new SBC
plans to compete under the "National-Local"
strategy, ranked by size: Markets in which SBC and
Ameritech currently offer services, ranked by
size: 1. New York 1 Los Angeles (SBC) 2 Philadelphia 2 Chicago (AIT) 3. Boston 3 Detroit (AIT) 4. Washington 4. Dallas-Fort
Worth (SBC) 5. Miami-Ft.
Lauderdale 5.Houston (SBC) 6. Atlanta- 6 San Francisco (SBC) 7. Minneapolis-St.
Paul 7. San Diego (SBC) 8. Phoenix 8. St. Louis (SBC) 9. Baltimore 9. Cleveland (AIT) 10.
Seattle-Everett 10. San Jose (SBC) 11. Denver-Boulder 11.Kansas City (SBC) 12. Pittsburgh 12. Sacramento (SBC) 13. Tampa-St.
Petersburg 13. Milwaukee (AIT) 14. Portland 14. San Antonio. (SBC) 15. Cincinnati 15. Indianapolis (AIT) 16. Slat Lake
City-Ogden 16. Columbus, OH (AIT) 17. Orlando 17. Hartford/New
Britain (SBC) 18. Buffalo 18. Oklahoma City (SBC) 19 New Orleans 19.Austin (SBC) 20.
Nashville-Davidson 20.Dayton (AIT) 21. Memphis 22. Las Vegas 23. Norfolk -Virginia
Beach 24. Rochester 25. Greensboro -Winston
-Salem 26. Louisville 27. Birmingham 28. Honolulu 29. Providence
-Warwick 30. Albany -Schenectady -
Troy