AT&T Corp. must have help being as dumb as it has been of late.
Once upon a time AT&T was retirement stock. You bought it to be sure you would have income when your work-a-day world was behind you. It was safe for widows and orphans.
It ain’t quite that safe any more.
On Oct. 12, AT&T’s stock closed below US$24, down from a high of US$60 in April. AT&T stock is now making future retirees quite nervous. State and local city funds have lost most of a billion dollars over the last year by sticking with AT&T and now the managers of some of the funds want to meet with AT&T management to find out just what the heck is going on.
One would have thought that AT&T had lost all its luster, returning to mid-1997 status when the stock got below US$10. Until recently, things looked much better-at least to the market-with the stock passing US$60 in early 1999 and staying in that range until this past spring when it tanked after AT&T admitted it was not going to meet sales and profit projections for the rest of 2000. Things have just been getting worse since then.
AT&T has been making strange business decisions of late-decisions outside the normal range of Dilbert-like managerial incompetence.
For instance, last spring the U.S. Federal Communications Commission touted the effects of an FCC-mandated reduction in fees that long-distance phone companies such as AT&T have to pay local phone carriers to complete long-distance phone calls. AT&T joined in the hoopla about the lower costs that were to be seen by phone customers.
Then, within a day, AT&T announced a new price structure that took away most of the reductions, and in some cases raised prices. AT&T had to back down after some bad press, including stories on the front page of The New York Times and on the network news shows.
Then early last month, AT&T was reported to be considering getting out of the long-distance phone business. It is hard to imagine what would be left of the company after it dumped its final “T.”
Finally, on Oct. 9 it leaked out that AT&T may demand a piece of the action from commercial Web sites that use its broadband network. Seems to me to be an ideal way to ensure that commercial sites use other ISPs.
It’s hard to imagine that these and a number of other recent moves could be the product of a competent management group. I don’t like saying that someone is incompetent, so the only other option is that an AT&T competitor managed to place a mole on the AT&T management team. If so, the mole is earning his keep.
Bradner is a consultant with Harvard University’s University Information Systems. He can be reached at sob@sobco.com.
