Ma Bell is gone and big problems face the eight baby companies she spawned
At the stroke of midnight, at his vacation home in Florida, American Telephone & Telegraph Chairman Charles Brown and his wife Ann Lee raised glasses. Said Brown: 'To the men and women of the Bell System." A thousand miles away, at a party near New York City, a longtime Bell manager lamented, "The world's best phone system is being broken up. What's there to be cheerful about?"
While much of the U.S. was offering champagne toasts or blowing noisemakers to welcome the new year, the world's biggest company, the Bell System, died quietly. It broke up into eight giant pieces—a new and smaller AT&T plus seven regional holding companies—in line with an out-of-court settlement of an antitrust suit reached on Jan. 8, 1982, between the Justice Department and Bell.
Seldom has anything so big ended so unceremoniously or uneventfully. Ma Bell simply walked offstage after 107 years, to no applause and no disruption in service. Millions of Americans picked up their telephones on New Year's Day and still got dial tones, as if nothing had happened.
Some 800 million calls a day went through as before. Nearly a million employees reported to work on Tuesday to more or less the same places they had gone the previous Friday.
Once they got to work, though, plenty was going on, including celebratory breakfasts, pizza parties and balloon poppings. In San Francisco, a giant banner showing the company's globelike logo was unfurled at AT&T's regional headquarters. At its Manhattan offices, the new, slimmed-down AT&T got quickly down to work and showed that things would be changing in American business. On Monday, the company signed an agreement under which Convergent Technologies, a computer manufacturer, will build new products for AT&T. Before the breakup, such a move would have been barred by the Government.
Institutional investors like pension-fund managers showed interest again in the eight new companies. Those stocks had not changed in value much since trading started in November, but they rose smartly last week. The biggest gainer was U S West, which climbed more than 7 points, to 63⅞. The other operating companies also showed handsome increases.
Although more than 10,000 telephone people spent the past two years working out details of the divestiture, Americans last week still had millions of questions about their new phone company—or companies. Unfortunately, at every level of what used to be the Bell System and in the regulatory commissions of all 50 states, there were many more questions than answers. Confesses William McKeever, telecommunications analyst at Dean Witter Reynolds: "Everybody is confused. The customers are thoroughly confused. The employees are confused. The companies are confused. So are the regulatory commissions, the unions and the stockholders. And so am I."
Uncertainty prevails, too, over long-distance charges. Last week AT&T announced it would cut those tolls by more than 10.5%. But the company linked the reduction to congressional acceptance of a special charge for access to long-distance lines that the Federal Communications Commission has mandated.