Every time a former Bell company has merged with yet another former Bell company in the last 10 years:
SBC merges with Ameritech
SBC merges with Pacific Bell
SBC merges with AT&T
(anyone seeing a pattern here?)
Bell Atlantic merges with GTE
Bell Atlantic merges with NYNEX, becomes Verizon
When each of these mergers happened, each company would trot out its press flacks, its CEOs and other assorted fish-faces, and they would all basically say the same thing:
“This merger is a logical next step that creates substantial value for customers and stockholders of both AT&T and BellSouth.” - Edward E. Whitacre, SBC Chairman and CEO
“Together, SBC and AT&T will be a stronger U.S.-based global competitor capable of delivering the advanced network technologies necessary to offer integrated, high-quality and competitively priced communications services to meet the evolving needs of customers worldwide.” - David W. Dorman, AT&T chairman and chief executive officer
“We believe this merger will enhance our ability to deliver what customers want.” - Phil Quigley, chairman, president and chief executive officer, Pacific Telesis Group
So, do customers want higher prices? Do higher prices “create substantial value” for customers? Do higher prices mean “competively priced communications services”? Becase that’s what we got as a result of these mergers.
Here’s the text of a letter we recently received (my employer is an ISP, so we buy a good number of things from PacSBC&t):
RE: SBC PremierSERV Frame Relay and ATM Price Increases
Dear Valued Customer:
Thank you for using SBC Advanced Solutions, Inc (”AT&T”) for your data communications needs. We value your business and want to make you aware of changes being made that may affect your service.
On May 15, 2006, AT&T will increase interstate rates for PremierSERV Frame Relay ports and access (all speeds, 56 Kbps to 40 Mbps) and PremierSERV ATM ports and access (1.536 Mbps to 599 Mbps). AT&T will also file with the applicable regulatory authorities to increase intrastate rates for PremierSERV Frame Relay ports and access (all speeds, 56 Kbps to 40 Mbps) and PremierSERV ATM ports and access (1.536 Mbps to 599 Mbps), with that increase to be effective May 15, 2006.
Prioces will increase up to 19.51% on some rate elements for all out-of-term PremierSERV Frame Relay and ATM Term Pricing Plans (TPPs), and for all new TPPs and renewals executed on or after May 15, 2006. For the duration of their current term, these price increases will not apply to services already under a TPP executed before May 15, 2006. Even with these incrases, our rates continue to be competitive with the rest of the industry.
Your business is important to us. We want to ensure that you are obtaining the most suitable services for your needs. Please contact your AT&T Account Manager or other member of your Sales Team to discuss your options. If you wish to negotiate a new TPP and avoid the rate increases, your AT&T Account Manager and Sales team will be happy to discuss that with you. Thank you for choosing AT&T.
Product Manager, AT&T Frame Relay/ATM Services
This is all so typical of customer communications from PacSBC&t. The happy tone, along with the carrot (negotiate a new TPP) and the stick (19.51% rate increases).
What I’d like to know is: has anyone else experienced near 20% price increases on their frame relay or ATM circuits? Does anyone else think this is just exactly what it looks like, the result of elimination of competition? This from the company who claims they need to charge content providers as well as ISPs for all that bandwidth it’s costing them SO much to transport.