Merger danger

Consumer groups, some state regulators and many smaller competitors are expressing concern that the latest wave of massive mergers is going to reduce consumer choice and lead to higher prices. There is actually yet another danger hidden inside these billion-dollar deals, however. They are a major distraction from otherwise getting business done. As compelling as the long-term synergies might be of the SBC/AT&T hookup, the short-term impact will more than likely to be a negative one. Smart competitors are licking their chops at the prospect of courting AT&T business customers, believing that the latter will quickly see the newfound uncertainty breeding among sales and service personnel no longer certain of their employment future. While SBC officials say the AT&T merger will speed up deployment of Project Lightspeed, many equipment vendors that have lived through previous mergers say the opposite is likely. Can Verizon sustain its FTTP plan and swallow MCI whole? How much time did Qwest's management spend contemplating its future with MCI — was it months, as often reported? When the last round of Bell mergers went through, the companies were being as pressed by competitors as they now are by cable. This time, things are different — and therein lies the danger.