Lending to Telecom Companies
When BankBoston developed its strategy for lending totelecommunications companies in 1999, it was responding to several changesin the telecommunications regulatory environment. The first of thosechanges was not a regulation per se but a ruling by federal judge HaroldGreen in `984. That ruling, the result of an antitrust suit brought by theU.S. government against telephone industry giant American Telephone andTelegraph (AT&T), "redefined the structure of the industry." (Rainie, 1999,unpaged) It divided the U.S. into 1`61 Local Access and Transport Areas(LATAs), each of which, in turn, had a number of local exchanges. AT&T hadto sell all of its local exchange business; that spin-off was furtherrearranged to form seven Regional Bell Holding Companies (known as BabyBells, or, more formally, RBOCs). (Rainie, 1999, unpaged) All this 'spinning off' left lots of room for new companies to enterthe market, and for some older, regional, independent AT&T-era companies toexpand or to enter other markets. During this time, AT&T, once the premiertelephone top-of-mind name in the country, was relegated to a subservientposition, providing nothing directly to the consumer, but arguably
However, President Clinton thought the original bill sent to him promotedmergers and concentration of power, instead of what the Congress said itwanted to promote. Moore, then research director at FairchildSemiconductor, made a prescient observation, later known as Moore's Law. "Kids can still come outof a garage with something that blows the pants off of Ivan Seidenberg,"according to Michael Powell, chairman of the Federal CommunicationsCommission. [1]In fact, Powell himself noted that he had a long list of companies "oncethought invincible" that are now either dead or moribund. Thiswould, however, necessitate that banking in general remove itself from the1934-era time-frames and returns it still seems to regard as normal. A greatmany market entrants were simply brilliant resellers and owned nothing ofvalue except their name and their methods of providing service. Inaddition, whether it has suppressed bickering between industries has yet tobe seen. On a practical level, however, the act required "that alltelecommunications carriers link their facilities and equipment directly orindirectly to one another on a reciprocal basis for a reasonable fee. One commentator on the final bill noted that ina single day, Congress had "swept away sixty-two years oftelecommunications policy, paved the way for a more dynamic informationsuperhighway, [and] suppressed decades of bickering between industries. It would appear there is no workable way to cope with that, and thatfor the near future, for both the industry and the consumer, it will be asort of technological "Wild West" atmosphere. -----------------------[1] In 1965, Gordon E. "(Rainie, 1999, unpaged) This meant virtual-monopoly Baby Bells would haveto treat their own internal businesses on an equal basis with outsidecompetition. If an investor wants toprofit in that environment, that investor will have to be just as rapid atassessing the 'landscape' and making changes in its own investmentstrategies. The fact that thereis also telephone number portability makes it even easier than before for aconsumer to switch telecommunications providers at will. The President reiterated his intention to enacttelecommunications reform.
Common topics in this essay:
Baby Bells,
President Clinton,
Moore's Law,
Wild West,
RBOCs Rainie,
Judge Green's,
,
Bell Labs,
Telecommunications Act,
Transport LATAs,
rainie 1999,
1999 unpaged,
rainie 1999 unpaged,
service providers,
jorgenson 2001,
baby bells,
jorgenson 2001 42,
faster cheaper,
2001 42,
1999 unpaged meant,
moore's law,
clinton signed,
unpaged meant,
hendricks 1999 39,
|
Acceptance Essays
