Cramer on the RBOC's and how they've blown (maybe forever) their big chance. We could have told him this two years ago...
Call Off the Horses
By James J. Cramer
5/17/99 7:58 AM ET
Why does Global Crossing (GLBX:Nasdaq) get to trump everybody and team up with U S West (USW:NYSE) even though it didn't even exist three years ago? Why does the market value MCI WorldCom (WCOM:Nasdaq) so highly?
Pretty simple: the regional Bell operating companies, the split-offs of the old Ma Bell, blew it. And in this market, that means they get the ball taken away and others get to play with it.
Think about it. These Bell companies, with their lines already into your homes, should have owned the world by now. There were no reasons for ISPs -- the Bell companies could have stopped that movement in a second. Cable modem? The Bell companies have had technology that could have stopped that movement, too, but they never deployed it. America Online (AOL:NYSE)? These companies could have cloned AOL, any one of them, but they failed.
They had the ball for years. They had ISDN and chose to price it out of the reach of consumers. They have T-1 and they make it ridiculously expensive and difficult to get (I have T-1, but not through Bell Atlantic (BEL:NYSE), Nynex or whoever botched my business). They are a total pain in the butt to deal with, and everybody knows it. They have taken gold mines and filled them with salt. They make me sick to my stomach with their lost business opportunities.
This stock market punishes those who blow it. It gives market capitalizations to those companies not hog-tied by the old ways. It wants to take market capitalization away from those that didn't see the Web or couldn't adjust to it.
Like the RBOCs.
What's really pathetic is these companies are so cavalrylike that, even with everything we see happening everyday, they canýt reinvent themselves. Global Crossing, Qwest (QWST:Nasdaq), WorldCom seem like mechanized divisions brimming with swift-moving tanks against these swordsmen on horses.
They deserved to get slaughtered.
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