Some thoughts on BellSouth-ATT

Two questions about the ATT/BellSouth deal. First, will it go through? WSJ's Law Blog neatly summarizes the latest thinking. One would think that with all of the changes wrought by satellite, internet, cable and wireless technologies, and the continuous reshaping of the telecom industry, the trustbusters wouldn't have the hubris/chutzpah to intervene. Would they?

Second, was it worth it? Tom Kirkendall wonders if the price was "delusional," as I did about Comcast/Disney.

I don't know, but there's an interesting theoretical question. One aspect of the deal is that it eliminates the Cingular joint venture between ATT and BellSouth. A Cingular spokesman is quoted as saying that "having one owner makes governance simpler, and makes decision-making simpler."

That's clearly true, and it's not just decision-making, but also sticky issues about fiduciary duties, which significantly complicate contracting. Indeed, for this reason I have suggested eliminating the need to form a business association in joint ventures, among other contexts. See Limited Liability Unlimited, 24 Delaware Journal of Corporate Law 407 (1999). It would be interesting to try to quantify how much of the 67 billion is intended to deal with this sticky little problem.

Comments

[jody]

what is going to happen to all of the emp. will it be just like when sbc, now att took over ameritech? they closed down most call centers. and now only hire full time temp emp. they may be making a decent buisness decision
but a bad what about all of the people who have put there lives in this companies hands, do they even factor into the mix of things?