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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Uncle Frank who wrote (3198)6/27/1999 1:07:00 PM
From: Frank A. Coluccio  Read Replies (2) of 54805
 
Frank, I think that there is a good possibility that it went beyond the passive acceptance of T to be split up. Over the years I've heard some very compelling arguments which might lead one to conclude that T actually engineered the breakup due to the state of market dynamics of that time. Some of those factors were:

- the ILECs not being as profitable any longer due to logistic entanglements at the local level, and the division of revenue stipulations with the other interstate common carriers (OCCs) who were coming onto the scene in ever increasing numbers;

- equal access momentum was building up and the need to administer to too many other carriers, at both the federal and local levels which was getting administratively too unwieldy at the time;

- the imminence of the emergence of competitive access providers (CAPs)

- diffusion in the equipment supply chain area through local and federal level sourcing regulations, seeking to open up the central office equipment supply markets which resulted in the lessening of profitability at WECO, thus removing many of the resale and tax/depreciation regs that they had exploited, previously.

This theory contends that the only way that T could have pulled it off and remain whole, from a fiduciary standpoint, was the way that they eventually did it, and that was by divesting their individual properties under the aegis of the federal government in an orderly and phased manner, yet in a way that was at least ostensibly, forced. Hmm..

I'll see if I can find the arguments and documentation which support these views somewhere in my archives, in case anyone is interested.

Regards, Frank Coluccio
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