Something's Buggin' Feds About New-Look Ma Bell

  • Share
  • Read Later
WASHINGTON: Like calling in the cat to get rid of the mouse, federal antitrust regulators are pleased with at least one aspect of AT&T's new role as the Cable Guy -- AT&T will be using its cable lines to provide local phone service, creating needed competition for its old kin, the Baby Bells. But regulators are worried about how to bell the cat. "Overnight, AT&T has not only become the No. 1 cable company but also the de facto standard-bearer for the future of telecom," says TIME senior economics reporter Bernard Baumhol. "They're now the only company really positioned to offer the one-stop Internet, cable and phone service that the industry is headed toward."

AT&T's monopolistic history doesn't ease many minds, nor does its new $5 billion deal with perhaps the next monopoly to get trustbusted, Microsoft, about extending Windows' current hegemony into all those set-top boxes. AT&T isn't promising exclusivity -- it says it'll honor TCI's old deal with Sun for some Java-run boxes, and promised Microsoft only a few "showcase cities" -- but Mr. Gates clearly has his foot in the door, and Netscape will tell you what generally happens after that. Will AT&T go under the government's knife again? It's early yet, but cable is the one-stop-shopping future, and the No.1 cable company is already the No. 1 phone company. When it also has deals with the No. 1 software company and the Nos. 2 and 3 cable companies (Time Warner, behemoth parent of TIME Daily, and Comcast), and just about everybody else except the Baby Bells, its sounds great for AT&T. But maybe not so great for competition.