February 05, 2007

Cingular--formerly AT&T, now the new AT&T

I've been doing research on 18 telecom carriers for a consumer privacy report card, and I thought AT&T's purchase of Bell South and its rebranding of Cingular would consolidate a few of the policies I'm evaluating and simplify my job. But I'm finding that explaining the convoluted history of mergers and acquisitions predating this latest chapter in the annals of media ownership concentration is making the task much more complex. The story is so absurd that (not surprisingly) parodies manage to present a more accurate representation of the monopolistic history than any official press release explanation. Here's Colbert's take:



Engadget tried to make sense of it all in 2005, before AT&T's purchase was approved and the Cingular shenanigans:

1984 - For years there was one phone company: AT&T. Then in 1984 the Justice Department forces AT&T to split up into a bunch of different companies. Seven of those become the regional Baby Bells (the regional Bell operating companies, or RBOCs), while what was left of AT&T handles long-distance.

The late 1990s - One of those regional local phone companies, Texas-based Southwestern Bell Corp, spends the late Nineties scooping up its fellow local phone companies, buying Pacific Telesis Group (PacBell) in 1997, Southern New England Telecommunications in 1998, and Ameritech in 1999. In 2002, SBC Communications, as it is now known, decides to ditch all the regional brand names and call the entire company simply "SBC" in order to "unify its image." SBC combines their cellphone operation with that of BellSouth in a joint venture known as Cingular Wireless. SBC owns 60% of Cingular. BellSouth owns the other 40%.

2001 - As part of a restructuring plan, AT&T decides to spin off their wireless division, known as AT&T Wireless, as a separate company.
at&T wireless logo

2004 - Cingular decides to acquire AT&T Wireless. Cost: $41 billion. AT&T, AT&T Wireless's former parent, retains rights to the AT&T Wireless brand name as part of 2001's spin-off agreement. They announce plans to launch a new wireless service under the AT&T Wireless brand name after Cingular completes its acquisition.

2005 - SBC, which you'll recall is an amalgam of regional Baby Bells spun off from AT&T, reaches an agreement to buy its former parent for $16 billion, $25 billion less than Cingular pays for AT&T Wireless. So SBC owns 60% of Cingular, which bought AT&T Wireless; assuming the Feds okay the deal, SBC will eventually own AT&T, too. Make sense?

Update: merger is approved in November, and SBC once again rebrands to AT&T. AT&T, which still has the rights to the AT&T Wireless name will begin using it in select markets, perhaps as a Cingular-based MVNO.

2006 - AT&T (formerly SBC) announces purchase of BellSouth for 67 billion dollars. Probably just to annoy us. We'll have to wait and see if the SEC approves.