There and Back Again

The recent announcement of a planned merger between AT&T and T-Mobile here in the U.S. led me to compile a (rough and partial) time-line of recent mergers in the telecommunications industry (or at least a big chunk of it - I've ignored the cable industry, for example). I justify my undertaking of this little project on this blog on the premise that a) computing has become physically inseparable from communications in the past two decades and b) the two have long been coupled at both the technical and the intellectual level (one can go back to, say, Claude Shannon's Master's thesis in support of such a claim).

• 1984: Agreement breaking up the Bell System goes into effect; creates AT&T long-distance company and seven local "regional Bell operating companies," including Nynex, Bell Atlantic, Ameritech, BellSouth, and Southwestern Bell.
• 1996: Telecommunications Reform Act
• 1997: Bell Atlantic mergers with Nynex
• 1998: Southwestern Bell, now SBC, merges with Ameritech.
• 2000: Bell Atlantic merges with GTE, becomes Verizon; merges with Vodafone to create Verizon Wireless
• 2005: SBC acquires AT&T, becomes AT&T
• 2005: Verizon acquires MCI/WorldCom
• 2006: AT&T acquires BellSouth
• 2007: AT&T acquires Cellular One
• 2011(?): AT&T buys T-Mobile USA, formerly Voicestream Wireless; pending regulatory approval.

I'm of course not the first to notice that the U.S. has seen a de facto reversal of the 1984 divestiture in the 15 years since the 1996 Telecommunications Act, only now incorporating additional technologies such as cellular telephony, which were still highly entrepreneurial in character twenty years ago. In fact I can't help but think of Tim Wu's recent book, The Master Switch, which argues that this sort of oligopolistic concentration in the information industries is a product of the historically inevitable "Cycle" of open entrepreneurship followed by closed corporate consolidation. Alas, Wu does not fully explain the causes of his cycle (A more analytically robust analysis of this sort of cycle of consolidation was penned a decade ago, by Debora Spar). Obviously in this case the liberalized rules of the 1996 Telecom Act were a necessary prerequisite to this rash of consolidation, but this is only opportunity, not motive. The obvious answer there would be economies of scale. From the perspective of the historian (we who so love niggling empirical details), it would be interesting to know what motivated each particular acquisition. In the case of T-Mobile, the answer seems to be, "computing," in so far as AT&T sees the merger as a means to increase its "LTE" (a.k.a. "4G") coverage, which is seen as crucial to meet the ever-growing bandwidth demands of mobile computing devices. Meanwhile, Verizon has been steadily divesting its lower-value land-line telephone companies. It seems we are in the midst of a major transformation of telecommunications, with the century old Bell company (in its modern incarnations) finally shedding its copper wire infrastructure in favor of a computing-centric high-bandwidth mobile and fiber-optic system, and engaging in acquisitions in order to build out that new infrastructure (just as it did with local telephone companies in the early twentieth century). What's surprising, perhaps, is not that this is happening, but that it's only happening now, decades into the "computer revolution."

Image Source: http://blog.modernmechanix.com/what-the-telephone-map-shows/