One company is merging with an undersea cable operator. Another is mining in Latin America. A third is doing a deal with a company that boasts one of the world's largest Internet backbones.
It's time to say goodbye to the Baby Bells. The seven regional telephone companies created by the 1984 breakup of the old American Telephone & Telegraph Co. aren't babies anymore. They're scarcely recognizable as Bells. Their regions are all turning into the same turf -- the entire planet.The latest evidence: US WEST Inc., born as the regional phone company for 14 Western states, agreed to merge with Global Crossing Ltd. Its new partner is a revved-up arriviste that is building undersea cables connecting the continents in a bid to become an international provider of telephone and data services.
These changes underscore the transformation of the telecommunications industry from a jumble of regional phone companies and long-distance players to a group of full-service "supercarriers." In this climate, the Bells are reinventing themselves, spurred by deregulation and a host of upstarts that want their customers.
This can be confusing for people who like to think of their Baby Bell as their own stake in old Ma Bell. For many, the local phone company has been a bit like the hometown team during the past 15 years. These companies helped define regions of the country, and in turn, built identities that reflected their customer base. For example, US WEST is known in some circles as the "cowboy Bell."
But if Global Crossing's bid is successful, this will change. The Baby Bell would be renamed Global Crossing and would one day sell services in Barcelona, Spain, as well as Bozeman, Mont.
US WEST is just the latest Baby Bell shucking its old identity. Bell Atlantic Corp. plans to merge with GTE Corp. in a marriage valued at more than $65 billion. The merger, if approved, would give Bell Atlantic access to a nationwide long-distance network and a robust Internet artery known as an Internet "backbone."
Those assets would help transform Bell Atlantic, which in 1997 acquired the old Nynex Corp., from a provider of plain old telephone service to an important Internet player. Bell Atlantic and GTE plan to come up with a new name for the combined company when the merger closes.
Even BellSouth Corp., the Atlanta-based Bell that has stayed on the sidelines during the merger frenzy of the past three years, has been reaching farther south than the architects of the AT&T breakup ever imagined. It is investing heavily in wireless operations throughout Latin America.
Known as the best managed of the Bells, it has been a beneficiary of the New South's economy, adding customers at a faster rate than its sibling companies. But doing well in one's own back yard is no longer considered enough, and senior managers have been seizing on the opportunity to head south of their border. One of the company's major markets is Miami, and BellSouth has used it as a gateway into Latin America.
"These companies have very different aspirations," says Brian Adamik, an analyst with the Yankee Group in Boston. "They all want to be in the long-distance business, they all want to be global, but how they go about doing it shows the differences between them."
The Baby Bells continue to be united by their status as the children of AT&T, which means they face more strict regulations than other telephone companies. The Bells have tried to fight these rules, going so far as to argue in some cases that this special treatment is unconstitutional.
But technology in many ways has rendered the old regional boundaries obsolete. The Internet, for example, has allowed consumers to access Web sites around the world for the prices of a local telephone call. "The term Baby Bell has almost no relevance anymore," says Solomon D. Trujillo, chairman of US WEST.
It certainly doesn't apply to SBC Communications Inc. The San Antonio company has cemented its reputation as a sort of "super Bell" with its purchase of Pacific Telesis Group and pending acquisition of Ameritech Corp.
It has invested in telephone companies in far-flung places such as South Africa. And it has agreed to invest in Williams Cos.' long-distance operations. Moreover, it has vowed to enter 30 new markets if regulators approve the deal.
It remains to be seen whether investors will adapt to the Bells' new identities. The companies' stocks still tend to move in lockstep, particularly on regulatory news.
Another big question: Will the Bells, with their common history, aggressively attack each other? Despite three years of deregulation, no Baby Bell telephone company has tried in earnest to offer competitive local service in a fellow Bell's territory.
But burgeoning global players have no choice but to enter new markets. Every telephone company is gunning to serve big corporations with multiple offices that stretch beyond the Bells' regions.