Commentary on a slow death

[tw]

commentary from Loring Wirbel in EE Times
Al Lewis, business columist for the Denver Post, pointed out an unanticipated consequence of the Cingular and Vodaphone bidding war for AT&T Wireless: the death of AT&T as a viable brand. With its wireless assets now melded into Cingular and AT&T Broadband as a vanished element within Comcast, then only thing left bearing the hatched goble logo is a boring circuit-switched long-haul network.

Cynics might says the time division mutlitple access patchwork of AT&T wireless had become so synonymous with "dropped call" that it gave AT&T reverse-brand equity. Agreed. But when a mighty brand is chopped up bit by bit, it's depressing to see even a crippled player vanish.

We in hardware engineering have seen this before. The Western Electric side of AT&T had fans, but Lucent Technologies was a power house for a few years. The conversion of microelectronics assets from Lucent to Agere helped the semiconductor company ... Meanwhile, through, Lucent loses its enterprise play through the creation of Avaya; has to augment its routing talents with Juniper deals; and the AT&T roots of the entire operation are lost to antiquity.

The Economist claimed that no time in the history of free world business was shareholder value more destroyed when AT&T owned and then spun off NCR. AT&T, like all MBA dominated companies, uses acquisitions and spin offs to mask the massive sucking sound. AT&T has negative growth; leaches on others to claim profits that are really finance games.

We discussed circuit switch technology some many years ago when xDSL was the obvious future AND still not available some 15+ years after proven by British Telephone. Back when Al Gore was giving his information superhighway speech; Robert Allen did not have a clue that a politician had better knowledge of the business than its chief MBA. Back then UT had finished with his time in pond.com. Back then, the long term future was to supplement and then replace all those expensive circuit switched exchanges with packet switched technology. To replace ISPs with a server in each home connected by xDSL and other broadband technologies. Back then, baby bells were resisting such technology due to a 20 year spending spree on new circuit switched swithes. Fear of pioneering new technology is why the 1996 Communicatons Act was created. All of which said circuit-switch technology is too limited (in the switch; not in the wires); too expensive; too obsolete.

Well now we have AT&T - once was the proud owner of Bell Labs, microelectronic manufacturing, Western Electric, largest installer of underwater transcontinental cables, purchased the premier company in wireless communication (McCaw Celluar), and owned NCR so that they could compete in the computer business against IBM. But AT&T was dominated by MBAs. And so these MBAs continued with failed venture after failed venture; all the while selling off assets to mask massive losses.

Worst service both in customer service and in dropped calls was obsolete technology time division switched AT&T Wireless. AT&T Broadband so feared packet switching as to plan circuit switched technology on the cable system eventually sold to Comcast. Comcast now uses packet switch for just too obvious reasons. Bell Lab basic research was stifled in favor of product development research. Basic concepts of how to perform research perverted by MBA short term thinking that removed a separation between basic research and application research. AT&T satellite division lost satellites - one having temporarily knocked PBS and a major commercial TV network off the air. They sold the profitable transcontinential cable business to Tyco - MBAs always need more cash. NCR was a disaster having once been THE cash register everywhere; now NCR is rarely seen. But AT&T sucked that division for money; then spit NCR out.

All that remains is obsolete technology circuit switched technology. Those MBAs have so little left to sell off. Those $billion available from the Lucent spinoff are all gone. All that remains is debt. But the MBAs - and the #1 MBA Robert Allen - got rich enough - America be damned.

Some of those AT&T people were friends and aquaintences. One summer, they were all talking ISDN as if this was some mysterious force discovered by Einstein. But none had even basic knowledge of how a phone works. They all understood tarrifs. Just none understood anything about the product or what it did. And with many such as Isenberg, of Bell Labs, loudly calling for the internet as a future, then one would think these AT&T people would at least know something about Internet ( www.isen.com/stupid.html ). They knew the Internet only as part of AT&T e-mail. Without dirt under their fingernails, then they were perfect management material for AT&T. AT&T joins Xerox, First Energy, and Motorola as classic examples of what happens when the MBA takes control of a company.