"In this age of convergence, we're going to start seeing some very curious alliances," said Jeffrey Kagan, president of Atlanta-based Kagan Telecommunications Associates. "Companies who are partners on one day can be competitors on the very next day-like Ameritech and AT&T."
California's local service telephone market will open to competition Jan. 1. The state's Public Utilities Commission is considering applications from 66 companies, including AT&T, Pacific Bell, MCI Metro Access Transmission, Viacom Communications and other cable operators, to offer facilities-based service, resale service or both.
Although Ameritech has not filed to offer local service in California, it would be possible for the Baby Bell to piggyback on AT&T's license.
"A benefit of an Ameritech/AT&T alliance would be to share the risk of offering a new product in a new market," said Mr. Kagan.
Both Ameritech and AT&T spokesmen refused comment on any future alliance.
"AT&T hasn't made its local play yet. But when they do, any partner will have to bring a lot to the table with them," said Ken Zita, partner at New York-based consultancy Network Dynamics. "But in this day of alliances and ventures, anything could happen."
Interestingly, Foote, Cone & Belding, San Francisco, appears poised to re-enter the advertising melee that will result from AT&T's entry into the California market. FCB, which had the Pacific Bell account for 23 years, resigned it in 1994 after the agency's New York office picked up some AT&T business.
Since then, FCB has done work on AT&T's Internet access service product, although it has not been awarded that business. At the same time, the San Francisco office has hired a new executive creative director with front line experience in the telecom wars. Exec VP Paul Wolfe's previous experience was on MCI at Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, where he developed the "Gramercy Press" campaign.