SBC struggles with its Chicago problem
Chicago is a warmhearted place, but it's cold outside this time of year . . . and downright icy for SBC executives who want to make friends there.
That's because Chicago is ground zero for complaints against what so far seems like the pointless takeover of Ameritech by SBC Communications. The move created one Bell giant that cuts a swath down the middle of the country, yet offers little accountability for anything that goes wrong in the Midwest.
The merger took place in October 1999 amid Midwestern critics' predictions that experienced personnel would leave, service would deteriorate and you wouldn't be able to get anybody on the phone who could fix things. So what happened? Experienced personnel left, service deteriorated and users say they can't get anyone on the phone who even knows what they're talking about, much less fix anything.
There's a legitimate debate as to whether SBC stripped Ameritech, or Ameritech stripped itself in advance of the merger. I've heard credible reports that Ameritech prettied up its operating numbers by cheating network investment and dumped the resulting problems in SBC's lap.
But SBC has its own way -- going back to when it took over California's Pacific Bell -- of "dissing" the companies it takes over and making them feel unimportant. Here's one example:
On SBC's Web site for required regulatory disclosures, it lists activities it's undertaking in each state to obtain long-distance authority. Click on Kansas or Oklahoma, where SBC's home telephone company Southwestern Bell has placed so-called Section 271 long-distance applications before the government, and you'll see a wealth of documents. Click on California, where Pacific Bell plans to apply next year, and you'll see a notice of recent activities.
Now click on Illinois. Here's what you get: "Information on Illinois Section 271 application status is currently being updated and will be available soon." In Bellspeak, "Information will be available soon" really means: "Nobody here is paying any attention to this Web page."
To be sure, the chief Illinois regulator told SBC CEO Ed Whitacre in September to forget about long-distance until he cleaned up local service. But here's what you get when you click on Indiana: "Information on Indiana Section 271 application status is currently being updated and will be available soon." Just for fun, try Ohio, Michigan or Wisconsin.
The problem is SBC's corporate strategy doesn't make much sense without long-distance authority for users in Ameritech's big cities. You haven't seen breakthrough offers from Bells in the states where they do have long-distance authority -- New York and Texas -- because they need approval in more states to connect corporate users. So in justifying the Ameritech merger, SBC said it would compete against Verizon in places such as New York and Boston specifically to connect users there with cities in SBC-land.
But if SBC can't say when it'll get long-distance authority to connect New York banks to their Chicago branches -- or vice versa -- what was the point of the merger?