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Prediction For 2017 December 30, 2006

Posted by Michael in Economics.
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I’ve been talking about telecom convergence in comment threads for years.  I am now going to put a prediction on the main page here, so that maybe in ten years you will remember me and think, “Hey, Michael was right.”

My prediction:  In 2017, the telephone, cable TV, cell phone and Internet access industries will no longer exist.  They will all be the same business, and that business will be offering services we don’t even contemplate today.

In 2017, you may try to explain to a ten year old child a world in which the phone, TV and computer were separate appliances.  If you do so, they will look at you funny.  When you get that funny look, remember, I told you so.

AT&T Completes Buyout of BellSouth

UPDATE below the break.

Commenter Barb remarks:

So much for breaking up the Baby Bells.

And:

It’s still almost identical to the old Ma Bell again.

Many people have the impression that the break-up was futile and a monopolistic Ma Bell is coming back.  Not so.  The break-up accomplished, at great cost, it’s purpose of creating a competitive long distance business and telephone equipment business (then dominated by Western Electric), but times change.

Meanwhile, the old Ma Bell is gone forever.

Verizon used to be mostly the Chesapeake & Potomac Telephone Company, then became Bell Atlantic. It acquired Nynex, GTE, and the remnants of MCI WorldCom, and formed Verizon Wireless with Vodaphone. An expensive buyout of Vodaphone’s stake is inevitable. Like AT&T, they are aggressively building to provide next-generation TV service.

AT&T started as Southwestern Bell Telephone Company, the runt of the Baby Bells. It became SBC, acquired SNET, PacTel, Ameritech, AT&T (and took AT&T’s name), and now BellSouth — including BellSouth’s half of Cingular. Cingular had already acquired what used to be AT&T Wireless (which was McCaw Communications, doing business as Cellular One, before the old AT&T bought it). Cingular is what the BellSouth deal is all about; AT&T now controls it.

Qwest acquired what used to be USWest, the Baby Bell in 14 western states (formerly Mountain Bell, Pacific Northwest Bell, etc.) The company has had a lot of problems with accounting scandals and poor service. Qwest has Denver, Seattle and Phoenix.

In short, the Baby Bells don’t really exist any more. AT&T and Verizon are not like the old Ma Bell; they compete in a highly competitive markets. They don’t dominate the sector like the old Ma Bell did.  The big bucks today are being invested by telecom and cable TV companies to compete in each others’ businesses as the industries converge.  Telephone and cable TV companies are scared of each other, as they should be.

Comments»

1. geoff - December 30, 2006

I think you’re right. They’re already packaging cable/phone/internet together here. $99/month for all three.

BTW, Michael – if you wanted to write a post about international money wars, but didn’t think it would fit in here, you’re very welcome to put it up at my site.

2. BrewFan - December 30, 2006

A lot of money is being spent here in Wisconsin on advertising meant to break the cable companies exclusive franchise agreements they enter into at the municipal level. Once that happens you won’t have to wait until 2017; it’ll happen immediately in some areas like Milwaukee where AT&T (who bought SBC (who bought Ameritech)) can already provide all the other services.

3. Barb the Evil Genius - December 30, 2006

So much for breaking up the Baby Bells.

4. Michael - December 30, 2006

Actually, SBC bought AT&T, and then took its name.

5. Barb the Evil Genius - December 30, 2006

It’s still almost identical to the old Ma Bell again.

6. Michael - December 30, 2006

Well, I guess that’s the essay I said I wasn’t going to write. I’m going to put that lengthy comment in the post and delete it here.

7. Standard Oil Muthas - December 30, 2006

Bout time you booger eaters caught up with the rest of the world.

8. Bart - December 30, 2006

I predict in the 2017:

Brett Favre will still be playing for the Packers.

And the Brewers will win the World Series…

NOT!

9. BrewFan - December 30, 2006

You can’t bum me out. Too much sports glory happening in this state right now. Badgers (football and round ball), Golden Eagles, Bucks. Its all good.

10. onehorsephoto - December 30, 2006

Or, life as we know it will be wiped out by an asteroid collision.

I hope I can find a good spot to set up my camera that day. Gonna need wide angle to get the whole fireball in the frame.

11. Bart - December 30, 2006

Brews, I see that you picked the Giants.
Maybe your sports luck is turning around.

12. Don Carne - December 31, 2006

onehorsephoto, If you film it Allah will post it.

13. BrewFan - December 31, 2006

No point denying reality, Bart 🙂


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