Brand-new heavies

The Bell companies have always acted as if getting bigger is their birthright. They are ready to buy cable TV companies or Internet peapods or even each other to fulfill a certain theory about competition: If you are big, you will win.

They play this game with the caution and deliberate movement of fat kings reaching across the dinner table for another leg of lamb, certain that their status will frighten others from grabbing it before them. And, it is their game to play. As the local-loop heavies, they have an advantage over new competitors with their regional networks already in place. They also have plenty of cash saved from all those years when competition was still distant thunder.

The competitors have been seen as, at best, viable but small, innovative but inexperienced, possessing great potential but also great debt.

It has been impressive, then, to watch Bell company join with Bell company, or at least try, anyway. It has been an effort on their part to fuse mature companies and networks into Frankenstein-like beasts that could dominate the competitive telecom market through sheer size and strength.

It's a strategy that has met with mixed success so far. Certain Bell mergers seem to be progressing, while another is still hung up in red tape.

Meanwhile, some of the determined-but-flawed competitors are trying to teach the Bell companies a thing or two about size and strength. Specifically, two of the upstarts, Global Crossing and Qwest Communications are butting heads over which one will get much bigger by acquiring a little Bell company called U S West.

This tussle of giants almost lends a tone of tragic inferiority to any current or future Bell-to-Bell merger. In the long run, will such mergers look like the last-ditch efforts of legacy cultures to defend themselves before they become extinct?

The Bell companies' dreams of domination don't seem like such a birthright anymore, especially because many new, entrepreneurial carriers have the same dreams. Their moves to execute on these ambitions seem not to be for defensive purposes, as the Bell-to-Bell deals are upon further inspection.

Instead, the acquisition-mad upstarts have entirely offensive strategies in mind. These buyouts - whether the targets are Bell companies, other upstarts or ISPs - are brazenly aggressive attacks on the industry's cultural status quo. They are actions taken on the belief that the bought company will give the buyer a bigger, better army - not a wider moat.

The traditional telecom industry, then, is being held up in stark relief aside some of the industry's new potential realities:

- That the most powerful companies of the new industry will be national and international in scope, not just regional or super-regional.

- That these companies will be tuned to aggressive market growth and marketability rather than a financially conservative nature.

- That the top executives of these companies will be out in the street fighting like wolves rather than hiding behind a public relations veneer designed for their protection.

These new realities become especially apparent when viewing the street fight that is taking place over U S West - now relegated to the status of a lifeless hunk of meat waiting to be devoured. The two prospectors exemplify a rich understanding of the aforementioned realities and are both basically entrepreneurial concerns that have used this knowledge to acquire the mass and resonance of companies that have been around much longer.

It seems ironic in a way that these new carriers have learned the new lessons of the industry so quickly and have grown so smartly. It is ironic because this easily could have been the fortune of the Bell companies had they unequivocally given themselves over to a progressive implementation of the Telecom Act.

It is true that some Bell companies have fought their natural instincts, have tried to become more competitive than defensive. Buying their Bell brethren actually was part of this intention, and some have even invested in an upstart or two. But, they would have had a much easier time of it had they helped knock down the old market barriers rather than support them. Had they done so, they might now be buying up those upstarts left and right. Instead they are the ones getting lessons in how to become bigger and badder.