The great affair: AT&T and SBC

Now that the marriage of these corporate monarchs will never be, let's review the performances of some of the principals during the operatic AT&T/SBC courtship.

Edward Whitacre, chairman and chief executive officer, SBC. How did he end up in this production? Throughout, Whitacre acted responsibly and discreetly, carefully exploring a proposition that could have revolutionized not just his company but the whole industry. Whitacre also had the good sense to call the whole thing off before it reached the stage of low comedy.

Don't be surprised if, thanks to his bravura performance in the well-publicized AT&T adventure, outsiders come to see Whitacre as one of the most desirable executives in the business world, not just a star in the telecom firmament.

Whitacre has done a great job with SBC because he has finished important projects. Ironically, he put himself into the highest class of executive talent because of something he didn't accomplish.

Robert Allen, chairman, AT&T. Face it: This is not Bob Allen's year. Neither was 1996. Allen is deep in a down period. The SBC fiasco was the low point to date - Allen's performance was baffling. Lowlights included:Negotiating with SBC but apparently without Walter.

Published reports indicated that Walter did not play an important role in the talks and that Allen early on agreed that Walter would not be the chief executive of the new company. AT&T denied these reports, using the softest voice imaginable.

So is it that surprising that Walter resigned last week after a mere nine months on the job? After vigorously defending the choice of Walter, former head of R.R. Donnelley, against suggestions that he was too inexperienced in the telecom industry to assume leadership of one of its biggest players, Allen undercut Walter in every possible way.

Walter's status was further clouded by Allen's decision to name John Zeglis vice chairman of AT&T during the romance with SBC. Zeglis was and remains AT&T's chief lawyer. Perhaps Zeglis' expertise speaks to Allen's vision for the future of AT&T.

In the end, Walter, through no fault of his own, began to resemble the cartoon character who blunders into an empty road only to be run over by a speeding car that comes out of nowhere. When he staggers to his feet, the car, now speeding in the opposite direction, again flattens him.

Attacking all Bell companies - including SBC - for resisting competition in the local loop.

Allen fired this salvo, hardly new ground for him, after negotiations with SBC had begun and had become public knowledge. Incredibly, he failed to notify SBC executives of his plans. Launching a surprise attack on your would-be partner is an odd way to negotiate a multibillion-dollar relationship.

While Allen's honesty and candor may be laudable, and some of his points compelling, his sense of timing and tactics was deplorable. At precisely the moment he should have stepped briefly out of harm's way, Allen stuck his stick in the wasp's nest and stirred.

Reed Hundt, chairman, Federal Communications Commission. The outgoing FCC chairman thought the merger was a bad idea. The FCC would have had plenty of opportunity to air its concerns and objections through normal due process, had the merger gone through. Hundt, however, decided to indulge himself in pre-emptive regulation by opposing the merger before it was done. He essentially pushed his way to the negotiating table.

Although it seems unlikely that any deal could have been concluded by that point even if Hundt had applauded, his public opposition drove in the final nail. So the FCC chairman got what he wanted, but his method was completely out-of-bounds.

The FCC has not in the past and should not now begin to substitute itself for functions that properly belong to management and shareholders. The FCC has plenty of opportunity to express itself and influence the industry through its many formal processes.

Hundt's action sets a dangerous precedent. It threatens an inappropriate and enlarged role for the FCC at precisely the time market forces should be limiting its role.

The FCC chairman played a destructive game. The sooner Hundt leaves, the better.