A breath of fresh air?

At long last, the drama is over and AT&T's executive ranks are set, at least for the next few moments. C. Michael Armstrong, who led a turnaround at Hughes Electronics Corp., is the new CEO and will share power with newly minted President John D. Zeglis, who may or may not eventually succeed Armstrong, depending on whom you believe.

More important than the succession question is whether even an outsider with experience in turning around a behemoth corporation can save the mother ship of all telecom carriers from being pushed by the wayside by well-funded competitors. It's a question that should be answered soon and one that will have a historical impact on the entire telecommunications industry.

Clearly the credentials are there to accomplish the task. Armstrong led a company that gained more than 1 million subscribers (about 50% of its base) by convincing them to drop their incumbent cable TV providers. However, at DirecTV, he also had one big advantage-better technology. Equipped with a digital signal that can deliver 150 channels and crystal-clear audio, DirecTV has a significantly better product than any of its cable TV competitors. That won't happen at AT&T. Aside from some isolated examples, AT&T's rivals can match its technical prowess.

Outwitting MCI, Sprint, the RHCs, GTE and others will require Armstrong to change AT&T's image from that of a lumbering giant to a nimble sprite. Not an easy task, but one that's within the realm of possibility.

American business, in fact, is filled with turnaround success stories. Notwithstanding its current position in the auto market, Chrysler rebounded from the verge of bankruptcy (with some government help that very likely won't come AT&T's way). IBM moved from focusing solely on big iron mainframes to focusing squarely on the Internet.

The challenge for Armstrong is to write in AT&T as the next chapter of that book and avoid becoming a footnote in telecom history.