VoIP and ENUM

When AT&T Chief Executive Edward E. Whitacre Jr. announced Sunday that his company would acquire BellSouth in a deal worth $67 billion, it signaled a new era for big telephony as well as the near complete undoing of the 1984 breakup of Ma Bell, with four out of seven Baby Bells soon subsumed back into the company.

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The purchase isn't really about undoing regulatory action or increasing market cap. For that matter, it isn't even about phone service. This merger is about buying the lines that connect to the homes of BellSouth customers and selling them everything you can squeeze down a fiber-optic line, including television, Internet, movies and music.

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This merger is a logical next step," Whitacre said. "Together, we will lead the way into a new era of converged and bundled communications, video and entertainment services while also improving our ability to manage complex networks."

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To make up for the death of their oldest and historically most important business, the phone companies have had to scramble to find alternatives. Wireless telephony proved to be one great way to make cash...

But while cellular is still hugely important, it's rapidly becoming a mature market. More than 80% of adults in the U.S. already own a cell phone. Companies like AT&T know they have to compete directly with fast-growing Internet phone services and turn the tables on the cable companies that provide them.

"They are gearing up to fight new competitors, the cable-television industry, for the complete bundle of services, including telephone, television, wireless and Internet," said independent telecom analyst Jeff Kagan.

"AT&T is getting ready to roll out their television service on a nationwide basis. This is much more advanced than traditional television," Kagan continued. "Customers, for example, can watch four channels at one time. This is sending companies like Comcast and the other cable television companies back to the drawing board to offer a better combination of services."
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Ultimately, it's likely the telecom industry will become something of a duopoly, with Verizon and AT&T competing head-to-head, and both companies squaring off against the cable industry.

"Telecommunications as an industry in the United States is going through massive changes," says Kagan. "We are in the middle of a major 20- to 30-year transformation. When we come out the other side, we'll have the choice of our telephone company versus our cable-television company for the same big bundle of services."