Telecom consolidation raises concerns for IT

Computerworld - Network managers are bracing for changes amid the merger frenzy in the telecommunications industry, which intensified this week with SBC Communications Inc.'s agreement to buy AT&T Corp. (see story) and reports that Qwest Communications International Inc. is in talks to gobble up MCI Inc.
In the long term, the ongoing consolidation will likely reduce the choices corporate users have when they put their network services contracts out for bid, some users and analysts said.
But several AT&T customers noted that their immediate concerns are making sure that SBC honors their contracts and finding out how proposed layoffs of more than 12,000 workers over the next year (see story) will alter the account teams they rely upon to set up new services and address complaints about billing and poor network connections.
"I care a lot about SBC buying AT&T, and it's going to be a matter of 'wait and see what happens' ... since the planned layoffs won't happen right away," said Cathleen Lilli, director of infrastructure services at Konica Minolta Business Solutions USA Inc. in Ramsey, N.J. One positive sign of consistency, she said, is that SBC announced that it won't close AT&T's network operations center in Bedminster, N.J.
In January 2004, Konica Minolta signed a two-year, $2.7 million contract with AT&T for an IP-based virtual private network across 92 U.S. locations serving 4,500 workers. It also signed on with AT&T for local and long-distance voice services that were formerly provided by MCI and Sprint Corp. "So far, we're happy with AT&T," Lilli said.
The contract includes an option for a third year. But if SBC makes layoffs that affect service for Konica Minolta, "that's going to be my out," Lilli said, citing the terms of her AT&T contract. "And SBC has to honor that contract; that's my position."
IT managers at Fireman's Fund Insurance Co. in Novato, Calif., plan to meet with SBC this week to go over potential changes that could take place as a result of the acquisition, said CIO Fred Matteson. On Jan. 12, AT&T announced a five-year, $42 million contract with Fireman's Fund for an IP VPN that will support 4,500 workers in 60 locations and replace voice and data networks from multiple vendors.
"My general evaluation is that the SBC purchase makes sense," Matteson said, noting that SBC's size will bolster AT&T's reputation for providing good network services to corporate customers.
SBC Chairman and CEO Edward Whitacre Jr. and David Dorman, his counterpart at AT&T, sought to assure corporate customers that the combined entity