WRAL Tech Wire

Embarq’s acquisition: More telco consolidation that means fewer choices for consumers and businesses

RESEARCH TRIANGLE PARK, N.C. – Wasn’t it just a decade ago that telecom deregulation and the breakup of “Ma Ball” helped trigger the Internet boom and a new ear in choice of services?

Now look at how consolidation – from the new AT&T version of Ma Bell that swallowed BellSouth to Verizon buying Alltel and Sprint buying Nextel – is affecting the remaining local phone companies.

Embarq became the latest consolidation victim – or survivor – on Monday when it agreed to be bought for around $12 billion by smaller rival CenturyTel. It hasn’t been that long since Concord, N.C.-based CTC became part of Windstream.

Our choices as consumers and as business users keep becoming fewer and fewer even though cable companies such as Cox and Time Warner continue to ramp up their own efforts. (Also on Monday, Atlanta-based Cox disclosed plans to build its own wireless service.)

Certainly alternative providers such as Cary-based Bandwidth.com and Raleigh-based FeatureTel remain very much in business and offer choice to businesses. But it certainly appears as if the consolidation among the large providers will continue.

What impact this will have on us all remains to be seen, but the service providers are scrambling to meet a fast-changing business environment. As landlines go the way of dinosaurs, AT&T and Verizon and companies such as the bigger CenturyTel move ever more firmly into the video space dominated by cable.

Consumer and business users also want more services and faster speeds over increasingly powerful mobile devices. The iPhone from Apple is selling millions. T-Mobile (which scooped up SunCom) is offering its own alternative.

But consolidation certainly doesn’t guarantee success. The Sprint-Nextel marriage has been a difficult one at best, for example.

As for Embarq, which is a major provider in the Carolinas, just two years ago it was spun off from Sprint as part of the Nextel deal. Now comes another deal with the ensuing job cuts, product changes and much, much more.

Consolidation may be the only means through which consumers and business will get the choices of product services they want. But they also will have fewer providers from which to choose.

How long before fewer choices of carriers leads to higher prices?

At that time, the cries of deregulation will sound again.

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…