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AT&T/SBC Plays Hardball

By - February 06, 2006

SbcAll the recent talk about net neutrality and how the telcos are planning to leverage their pipes against the threats of Google et al reminded me of a story I heard recently about AT&T/SBC and our local newspaper, the San Francisco Chronicle.

According to sources that are very well informed inside the paper, SBC (now AT&T after the merger) is quite upset with the way a Chronicle columnist has been covering the company. Now SBC is pretty much the top Old School corporation around here (the SF Giants ballpark is named after it, for example), and it spreads its advertising budget around like oxygen in an intensive care ward. I’m told that annually, SBC spends around $5 million with the Chronicle.

But recently, SBC has turned off the spigot. Seems Chronicle columnist David Lazarus pissed them off one time too many, and for whatever reason the paper would not muzzle the recalcitrant journalist. In what appears to be retribution, SBC has pulled its ads.

Sure, a company has the right to spend its ad dollars wherever it wants to. But SBC not supporting the home town paper, because it doesn’t like the fact that that paper’s columnist writes negative (but from what I can tell, pretty accurate) pieces? That just seems, well, misguided. After all, negative press is still press, and it’s an opportunity to respond, to learn, to grow, to do better. Even if you disagree with the press, at least take the time to engage in a conversation.

So I called AT&T/SBC to get a response and ask if what my sources charge is true. But I only got this: “Our marketing strategy and media buying plans are proprietary.”

Alright then.

Why am I writing this? Because this is your new competitor, Google. Get to know them. As you offer free WiFi to all of San Francisco (and, one might argue, the rest of the country/world), and undermine AT&T/SBC’s broadband business (and wheel Vint Cerf out to argue the net neutrality meme), hard ball players like SBC are going to go after you, and rest assured, their motto ain’t “don’t be evil.”

Caveat: I have friends inside the SF Chronicle, and because SBC isn’t çommenting, this post represents just one side of the story. I hope SBC will change its mind and engage …. if it does, I’ll update this post.

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12 thoughts on “AT&T/SBC Plays Hardball

  1. Nice to see some people grok what is happening.

    As rough as that might be for the SF Chronicle it is just the tip of this net neutrality iceberg — the peering wars (and shakedowns) are about to begin (again). :-)

    Play ball.

    -david

  2. I seem to remember that Pacific Bell was said to be the main source for a lot of Dilbert stories … Didn’t Scott Adams work there at some point?

  3. Ryan Singel says:

    Two words for the Chronicle: Mays Field.

  4. Andi says:

    I don’t know if this link will make it into the comment, if not it will be the first result on a Google search of “Pacific Bell Dilbert Scott Adams”

    http://www.dilbert.com/comics/dilbert/news_and_history/html/about_scott_adams.html

    I never worked for PacBell but did have some dealings with them beyond being a phone customer. While I did very well with them I have to admit that their bureaucracy often left me shaking my head.

  5. Joe Wehr says:

    I live in Connecticut & have DSL thru SBC. To get the best SBC rate, you have to agree to a 1 year commitment.

    I do not think our activist Attorney General (a close second to NY’s Spitzer) will let SBC change the “terms” of its service by slowing the delivery of content from some providers without a fight.

    No sooner does SBC acquire AT&T & it tries to go back to the old Ma Bell days prior to deregulation.

  6. for a lot more on what is happening with San Francisco WiFi initiative, see my blog

    http://www.webnetic.net

  7. Roger Karraker says:

    Andi’s comment above that Scott Adams didn’t work for PacBell is belied on the page linked to:

    “I moved from the bank to Pacific Bell, San Ramon, California, and worked there from 1986 through June 1995. I worked in a number of jobs that defy description but all involve technology and finances. The most recent job was in a laboratory, finding ways to use digital phone lines and also running the company’s BBS.”

    I had some contacts with PacBell’s PR persons in the early 1990s and they were quite proud of their association with Adams. I thought that quite weird since clearly he was documenting a monumentally dysfunctional organization.

  8. class action bureau says:

    Court ‘Mega-Merger’ Review Coming To A Head?

    The normally quiet court process of evaluating U.S. Department of Justice (DoJ) consent decrees under the Tunney Act could get a little rowdy when it comes to last year’s SBC/AT&T and Verizon/MCI “mega-mergers” if interveners have anything to say about it (TPR, May 8).

    Another motion for amicus curiae intervention in opposition to the telco combinations was filed with the U.S. District Court for the District of Columbia by the head of two out-of-business carriers just as the judge in the matter allowed the Competitive Telecommunications Association (CompTel) to participate in the judicial-review proceeding (TelecomWeb news break, May 11). Court reviews under the Tunney Act could change merger conditions imposed by the government, but such actions have been rare; eventually, a court must rule on public- interest issues of consent decrees settling antitrust cases brought by DoJ. Judge Emmet G. Sullivan has scheduled a status conference for June 27 and a final hearing for July 12 on DoJ’s controversial SBC/AT&T and Verizon/MCI consent decrees that called for limited metro network divestitures (TPR, Oct. 31, 2005).

    At Judge Sullivan’s court, Michael Lovern Sr. of Edgewater, Md. – on behalf of National Teleprocessing Inc. and American TeleDial Corp., companies he founded and owned – is seeking to intervene on the basis of past allegations that the former regional holding companies illegally put his two companies out of business due to continued monopolistic practices.

    Lovern essentially is repeating similar merger objections made in the Cingular Wireless 2004/05 takeover of the former AT&T Wireless – now made more potent by AT&T’s “super merger” proposal to combine with BellSouth and Cingular. Lovern’s petition claims DoJ and the FCC “swept under the carpet” evidence against the Cingular/AT&T Wireless deal.

    Central Billing And Collection At Issue

    The 39-page request hinges in large part on charges that AT&T continues to act as a “contract administrator” operating a universal billing-and- collection system called the InterCompany Settlement System (ISS) that was supposed to be divested as part of the federal court’s Modified Final Judgment (MFJ) governing the Bell System breakup.
    In items of evidence that sometimes date back to 1992, Lovern’s petition maintains that the ISS acts “under the radar” and without tariff filings. It likens the activity to a “racketeering enterprise” because the ISS allegedly works on behalf of all the former Bell companies to control toll messages placed on end-user billing statements anywhere in the United States, Canada & the Caribbean.
    Lovern’s petition also asserts that all an incumbent local exchange carriers (ILECs), independent telephone carriers (ITCs), competitive LECs (CLECs) and resellers must participate in the ISS through interconnection agreements, and that this contributes to anticompetitive behavior. Lovern wants the court to deny final judicial approval of the mega-mergers and to authorize a full investigation of the ISS to determine whom or what is best suited to be its “contract administrator.”

    CompTel, meanwhile, hasn’t yet elaborated on its end goal in the proceeding, except to suggest it wants to see DoJ carry the burden of demonstrating that the mergers – and the proposed divestitures of unused metro capacity as part of the settlement – are in the public interest.
    At a hearing last week, Judge Sullivan granted CompTel’s petition for amicus curiae status. In early February, CompTel filed a plea at the court to intervene in the Tunney Act proceeding or, in the alternative, to participate as amicus curiae. DoJ ‘s Antitrust Division, Verizon and SBC all asked the court to deny the CompTel request. Jonathan Lee, CompTel’s senior vice president of regulatory affairs, said in a prepared statement: “Judge Sullivan made it very clear hat he has no intention of rubber-stamping the mergers” and that CompTel wants to help “determine whether the consent decrees restore the competition that the DoJ concedes will be lost as the result of these mergers.”

    [Copyright 2006 Access Intelligence, LLC. All rights reserved.]

    COPYRIGHT 2006 Access Intelligence, LLC.

    COPYRIGHT 2006 Gale Group

  9. class action bureau says:

    SBC / AT&T MERGER HEARINGS GETTING SERIOUS – LOVERN STILL AN INTERVENOR PARTY

    Washington, D.C.

    On June 27, 2006, in Washington, D.C. at U.S. District Court, Judge Sullivan held a status conference with all the Parties in the SBC / AT&T Merger case, including Michael Lovern, Sr., who has intervened in the case under Rule 24 (a) Federal Rules of Civil Procedure. Lovern’s brief filed with the Court states he and his former private telecom companies have claims totaling $2.7 Billion that AT&T, a.k.a. SBC Communications, et al, defrauded him out of through a racketeering enterprise; and, that Consumers have been defrauded out of Hundreds of Billions of Dollars by the two Companies, and, AT&T’s competitors were defrauded out of Hundreds of Billions of Dollars, all with the aid of Qwest [US West], Bellsouth, Verizon [NYNEX – Bell Atlantic], Cincinnati Bell, Pac Bell, and others, associated with and connected to LEC Billing, the billing and collection of toll calls placed on local exchange carrier monthly billing statements.

    Lovern’s claims are all centered around and connected to the Intercompany Settlement System (ISS), which is AT&T’s original billing system. AT&T was ordered by the same Court back in the early 80s [Judge Greene] to divest themselves of the system, part and parcel to the MFJ and divestiture [break-up of AT&T]. Lovern’s brief claims that never happened, and AT&T continued to use their system covertly, and illegally, through a sophisticated scheme operating under the radar, set up by the Regional Bell Operation Companies (RBOCs), Cincinnati Bell (CB) and Southern New England Telephone (SNET). According to Lovern, AT&T continued to back-door access the system through CB and Bellsouth until the early 90s when the RBOCs kicked AT&T out due to Lovern exposing the illegal scheme. Lovern also claims this is why the RBOCs sold Bellcore in an attempt to cover their tracks.

    In yesterday’s hearing AT&T’s lawyers attempted to keep Lovern from arguing his brief before Judge Sullivan in next month’s hearing saying the Tunney Act does not require the court to allow any party to address the court. When that didn’t work they attempted to get Judge Sullivan to agree to close the courtroom at the next hearing so the public can’t hear what’s being said. The Judge didn’t buy that argument either stating, “The public has a right to hear what’s going on in this case.” Lovern is considered to be the Telecommunication Industry’s foremost expert on the ISS. Because SBC is the “Contract Administrator” for the ISS, and controls it, now AT&T will be in control again, even though the same court [Judge Greene] ruled in the 80s this was a violation of antitrust laws.

    DOJ joined in these motions attempting to stop the public from hearing what’s obviously coming next month when Lovern argues his brief asking the court to not approve the merger[s]. Lovern stated there are many problems. 1). “If the MCI Shareholders knew about the Billions of Dollars these companies had defrauded MCI out of, via billing & collection, they would never have approved the merger as Verizon is just as culpable as the others, even though Southwester Bell / SBC has been the Contract Administrator for the ISS since divestiture. 2). “DOJ doesn’t want me to expose what I know in open court because the problems associated with the ISS spill over into the NSA Telephone Record Spy cases, and I know who the players are and how it can be done through a foreign intelligence agency very friendly with the U.S., all connected to the ISS.” 3). “SBC and Verizon are both operating as if the mergers are final, and they’re not, so if the court refuses to approve them there will be shareholder lawsuits for the next 20 years, and the SEC is already in trouble for covering up what I filed in the merger cases as I gave it to them numerous times in conjunction with Securities Fraud that these companies have committed over the past few years by intentionally failing to disclose their liability pursuant to 17 CFR 229.303, as interpreted by the U.S. Supreme Court. The stakes are huge as this impacts not only these two mergers but the proposed AT&T / Bellsouth merger also. I have informed both the Senate Judiciary Committee and Senate Banking Committee as to the problems.”

    Next month’s hearing will certainly be interesting and fireworks are expected. Lovern says, “The Companie[s] lawyers are now at a huge disadvantage because they have no expertise in what’s going to be discussed in an open dialogue between myself and Judge Sullivan at the next hearing. Now they’re going to have to play on my turf.”

  10. classactionbureau says:

    “It Ain’t Over Yet: Post Merger Challengers Brace for Court”
    Telecom Web (07/05/06)

    The U.S. District Court for the District of Columbia on July 12 will hold a hearing on legal challenges to last year’s SBC Communications/AT&T and Verizon Communications/MCI mergers as part of the formal Tunney Act review of the consent decrees that were negotiated by the Justice Department with the merged telephone companies. Several groups and individuals are set to testify at the hearing, including the Competitive Telecommunications Association (CompTel),which will address the issue of whether the mergers will harm consumers and carrier competition. The court also expects to hear from Michael Lovern Sr. of Edgewater, Md., who is intervening on the Tunney Act proceeding on the basis of past allegations and $2.7 billion in damage claims on behalf of National Teleprocessing and American TeleDial, two companies Lovern founded and owned. Lovern claims these two companies were buried by the former regional holding companies’ illegal monopolistic practices. Lovern’s allegations are essentially the same as those made in the Cingular Wireless 2004-2005 takeover of the former AT&T Wireless. In his petition, Lovern claims the Justice Department and the FCC “swept under the carpet” evidence against the Cingular / AT&T Wireless deal. Lovern’s charges largely revolve around AT&T still acting as a “contract administrator” operating a universal billing-and-collection system called the InterCompany Settlement System (ISS), which was supposed to be divested as part of the court’s Modified Final Judgment (MFJ) governing the breakup of the Bell System. Although AT&T’s lawyers have reportedly tried to keep Lovern from making his arguments in the upcoming hearing because the Tunney Act does not require the court to allow any party to address the court, Judge Emmet G. Sullivan ruled that the public is entitled “to hear what’s going on in this case.”

  11. Al Clemens says:

    I have a letter I wrote about my problem with AT&T, and I can’t find a Email address to send it, outside of my own family. They have been driving me crazy. AJC

  12. robert post says:

    At Judge Sullivan’s court, Michael Lovern Sr. of Edgewater, Md. – on behalf of National Teleprocessing Inc. and American TeleDial Corp., companies he founded and owned – is seeking to intervene on the basis of past allegations that the former regional holding companies illegally put his two companies out of business due to continued monopolistic practices.

    Lovern essentially is repeating similar merger objections made in the Cingular Wireless 2004/05 takeover of the former AT&T Wireless – now made more potent by AT&T’s “super merger” proposal to combine with BellSouth and Cingular. Lovern’s petition claims DoJ and the FCC “swept under the carpet” evidence against the Cingular/AT&T Wireless deal.

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