Look, Ma Bell, No Competition
CBS sees resurrection of telephone monopoly and bills going up, while other networks give free-market perspective that competition can lower bills.

By Ken Shepherd
Business & Media Institute
March 6, 2006

     The announcement that AT&T plans to buy out BellSouth took the March 5 “CBS Evening News” back to January 1984 when the “Ma Bell” monopoly was busted and Wendy’s commercials featured elderly actress Clara Peller asking “where’s the beef?”

     Twenty-two years, four major wireless phone providers, and numerous cable and broadband voice-over-Internet companies later, the Tiffany network feared another Bell monopoly, asking, “where’s the competition?”

     “Dial A for acquisition. AT&T says it’s buying rival BellSouth for $67 billion. The return of Ma Bell is where we start tonight,” CBS anchor Russ Mitchell teased viewers during the show’s opening credits.

     Moments later Mitchell introduced the story by correspondent Bianca Solorzano, saying that the “blockbuster deal” nearly “completes the reversal of a blockbuster breakup more than 20 years ago,” an agreement “that could eventually ring in big changes for consumers.”

     Solorzano reported that the merger could “force more mergers, like between Verizon and Qwest, if they’re to have any chance to stay in the phone game.” In the long run, Solorzano concluded, “you can just forget about your telephone bill going down anytime soon.”

     Yet over at “NBC Nightly News,” CNBC’s David Farber saw a different outcome from the merger, as cable companies offering voice-over-Internet phone service continue to gain in popularity relative to traditional phone companies like AT&T or BellSouth.

     “The hope on the part of AT&T, at least, is that, ‘Well, we’ve almost recreated Ma Bell at this point. But by doing so, we’ve brought enough power to bear that we can compete with the cable company,’ Farber told weekend host John Seigenthaler. “And, therefore, maybe you’ll start to see prices come down a little bit,” the CNBC correspondent added.

     Meanwhile, a telecommunications expert on the March 5 “World News Tonight” told reporter Bob Jamieson that fears of a monopoly are overblown. “I don't think you should focus on size. But in fact we’re not going to see a reduction of competitors in any market,” said Tom Watts of S.G. Cowan and Company.