It will be some time before American Telephone & Telephone Co. and the American people determine whether the fight to move the giant telecommunications company into competitive businesses was worth the years of political and regulatory squabble.
But there is no doubt that the launching with the New Year of AT&T's $5 billion unregulated subsidiary, American Bell Inc., is one of the most significant startups in the nation's corporate history. It will affect the way every home and business communicates.
American Bell also will reshape the telecommunications landscape as AT&T for the first time enters unregulated industries such as data processing, and deregulates its own sale and distribution of telephones and switchboards.
In addition, the event will be the first step in a process that will restructure the world's largest corporation and private employer. As a result, the increasingly competitive communications and computer world awaits the birth of "Baby Bell" with a combination of curiosity, excitement and fear.
For starters, creation of the subsidiary will mean that consumers no longer will go to their local phone company for their telephones. American Bell outlets, such as Sears, Roebuck & Co., and their own phone center stores, as well as competitors -- from department stores to specialty shops -- will become the new source for telephones.
Businesses, it would appear, are likely to be affected less directly in simple marketing terms. But the advent of American Bell is likely to bring a host of new telecommunications products into the marketplace.
Harry Edelson, an analyst with First Boston Corp., predicts that American Bell will introduce about 170 products into the market within its first two years of operations. "Neither Wall Street nor the man on the street has focused on how significant that will be," Edelson said. He observed that most attention has focused instead -- and with good reason -- on the Jan. 1, 1984, splitup of AT&T as the Bell Systems lose 22 local phone companies under the terms of a year-old decree with the Justice Department.
While AT&T executives are enthusiastic about American Bell's birth, other analysts and Bell watchers see a marked lack of progress in moving the subsidiary into the marketplace, noting that only through the introduction of Net 1,000, a network service for institutions, has American Bell described exactly what it plans to offer.
"The general impression you get is that they are very confused," said Steven Chrust, an analyst with Sanford C. Bernstein & Co. "It's not like this is jumping up at them quickly. One would have thought they'd be better prepared."
Randall Tobias, president of American Bell Consumer Products, admits the company is only slowly getting going. "It's certainly true that we're feeling our way along at this time," Tobias said. "We won't have a full head of steam until the mid- to late Eighties."
Yet there is a lot of speculation in telecommunications circles whether American Bell is close to offering major products and services, a fact that concerns competitors, particularly those whose customers may be taking a wait-and-see attitude about major equipment or service purchases.
"The computer industry is concerned about what is possible from American Bell," said Jack Biddle, president of the Computer and Communications Industry. "The implication is that there are a number of products coming out, so you, the consumer, should hold off until we announce them. That's called overhanging the market."
For example, many corporate users and Bell watchers say the company is on the verge of introducing an elaborate PBX, or switchboard, known as Antelope, which could be a major industry development in 1983.
It is also possible that, within the year, AT&T will roll out major computer products, perhaps compatible with its network services. Those computers will be in the desk-top-to-refrigerator-size category, according to Chris Mines, a senior analyst with The Yankee Group. The introduction of a home computer in the $100-to-$150 range is also a distinct possibility, though it is unlikely until at least a year from now, Mines said.
Ultimately, those computers could be linked by the AT&T network to other similar computers, permitting "three or four people to play the same video games at the same time," Mines said. Moreover, AT&T is launching a major effort on videotex, the distribution of data to home terminals over phone lines in South Florida, at the same time that a videotex trial with CBS continues in Ridgewood, N.J.
Furthermore, Mines said American Bell is looking at making a major contribution to the managerial or executive market with a product reportedly called a Get Set. That device would combine a video display screen with a telephone and could automatically provide directory services. "The telephone will be the way to get computers in the hands of more managers," Mines said.
"Their overall task is to reacquaint people with the power of the telephone," Mines said. "Now, it's basically invisible. You don't use the phone as a terminal, and that's a big part of both the business and residential sides." In the home, the mission is to make the telephone "less invisible and more of a mulifaceted appliance," he noted.
According to American Bell officials, however, the company's ability to move quickly, largely freed of the hindrance of regulations, will make it a force in the marketplace. In earlier times, "We'd see a market window and sit around waiting for regulatory decisions," Tobias said.
In Tobias' view, American Bell has an opportunity to soup up the telephone. "The basic telephone for growing numbers of customers will take on characteristics that will permit it to do a variety of things, from simple record-and-answer devices to repeating dialing capabilities and more," he said.
But many observers wonder how quickly aggressive executives such as Tobias can move AT&T's acknowledged technical expertise into either the residential or business markets. There is little in Bell's track record to suggest that the company is anything but slow to adapt technology to the marketplace.
"They may know what they are doing at the top, but a lot of the pieces aren't talking to each other," Mines said. Engineers and other scientists coming to American Bell from Bell Labs "don't know the word 'product' and don't know the word 'market,' " Mines said. "They need to learn to get products to market at the right time and at the right price."
In the meantime, the creation of American Bell, with 28,000 people cleanly separated from AT&T, is an enormous undertaking, one taking place at the same time AT&T is running most of the nation's telephone systems. About $1 billion has been earmarked just to set up the company. In permitting its establishment, the Federal Communications Commission insisted that the people and materials that become "Baby Bell" be separated completely from the parent company.
As part of that process of separation, the new firm has signed leases for office and other commercial space in every state in the union -- a total of 8.5 million square feet at 555 locations, according to Robert McNulty, American Bell's vice president for planning, analysis and operations.
Electric power and even telephone service have to be reestablished for the people being transferred to American Bell. "We had no credit references, and one telephone company turned us down and asked for a deposit," McNulty said. "You can plan for the big things, but the little things can make it difficult."
Next weekend, trucks will begin hauling files and other office materials around Northern New Jersey, where much of AT&T's and American Bell's headquarters are situated. The movement will signal the imminent launching of the new company, and the telephone industry will never again be the same.