AT&T; Brand to Endure in Deal
AT&T; Corp. may be history, but its name will live on.
SBC Communications Inc., which could get federal approval as early as today to acquire one of the nation’s most iconic companies, said Thursday that it would adopt the AT&T; name as its own.
The announcement, which SBC hinted at previously, came as antitrust lawyers in the Justice Department cleared the $16-billion merger as well as the $8.5-billion purchase of MCI Inc. by Verizon Communications Inc.
The approvals, though, require the companies to lease to rivals the unused fiber optic lines going to 739 office buildings in 19 major metropolitan areas. They include 36 buildings in Los Angeles and Orange counties such as the imposing blue-glass Warner Center Towers and one of the landmark twin Century Plaza Towers.
The Federal Communications Commission has set a vote on the mergers for today, but could delay it for a week or more as they hammer out other possible conditions. The commission, short one member, is split between two Republicans and two Democrats.
In addition, final approvals from regulators in California and several other states are pending.
The passing of AT&T; would mark the end for a company that was the epitome of corporate America and, until 1984, a stodgy monopoly known more familiarly as Ma Bell.
But the power of the brand name and its global reach would live on once SBC completes the acquisition, which it expects to do before the end of the year.
“The AT&T; name has a proud and storied heritage, as well as unparalleled recognition around the globe among both businesses and consumers,” said SBC Chairman Edward E. Whitacre Jr. “This is the brand that will lead the industry in delivering the next generation of communications and entertainment services.”
AT&T; Chairman David W. Dorman said SBC’s decision was a “powerful endorsement of the enduring strength of the AT&T; brand.”
Thinking of San Antonio-based SBC as the legendary AT&T; may take some time to get used to.
“Culturally, it’s a big shift for everybody,” said analyst Jessica Zufolo at Medley Global Advisors in Washington.
Some analysts believe that the company had little choice. SBC isn’t known outside of its 13-state territory. Even in California, many consumers still refer to their phone company as Pacific Bell, which SBC bought eight years ago.
“What does SBC mean to anybody? It doesn’t attract attention or familiarity,” said analyst David Novosel at Gimme Credit Publications in Chicago.
SBC and Verizon, which both argued that they no longer compete with AT&T; and MCI, praised the Justice Department for clearing the mega-deals of any anti-competitive concerns. But the decision rankled consumer groups and large business customers.
“Thirty years after starting to get competition and then breaking up the Ma Bell monopoly, we’re starting all over,” said Gene Kimmelman, public policy director for Consumers Union, publisher of Consumer Reports magazine. “The Justice Department has just destroyed what competition was left.”
He said that corporate telecom customers would have fewer choices for phone and high-speed connections, and that the prices would rise dramatically, forcing them to pass the added cost along to their customers.
