The final act in a corporate takeover is playing out as Texas-based SBC Communications Inc. devours the last visible sign of America’s oldest telephone company.
Southern New England Telephone Co., founded in New Haven in 1878, is losing the sole use of its name. SBC SNET now appears on telephone bills, building signs, company vehicles and corporate stationery.
Company officials say changing the brand strikes a balance between a name that is highly identifiable in Connecticut and the need for a strong stance in a competitive industry.
“The SNET name or some variant has served us well since 1878,” spokeswoman Beverly Levy said. “There’s a lot of equity in that name. Our customers are nostalgic for that name. Our employees are nostalgic for that name.”
But the name SBC — the nation’s second-largest local phone service company — is among the company’s most valuable assets, Levy said.
“To compete, we must also be a national brand name,” she said.
One customer said he is more concerned about the cost of service than the company’s name.
“I don’t know what SBC is. I know SNET,” David Hemingway of New Haven said. “It makes a difference if the fees are going up or down.”
Connecticut Attorney General Richard Blumenthal, a critic of SBC, said the state is losing more than a well-known company name.
“We lost a commitment to community and a concern for consumers that is intangible but invaluable,” he said.
Promised savings from the acquisition have failed to materialize — SBC unsuccessfully tried to raise rates in 2000 — and the company refuses to continue SNET’s practice of not charging customers who say they never asked for services such as call waiting and caller ID, Blumenthal said.
Levy disputed Blumenthal, saying the merger did not refer specifically to customer savings, but long-distance rates have declined and SBC SNET offers discounts for multiple services.
In addition, the telephone company “absolutely, vehemently” opposes the practice of charging for unwanted services.
SBC, which was Southwestern Bell before AT&T was broken up in 1984, reported net income of $1.25 billion for the last three months of 2001, down from $1.3 billion a year earlier.
Federal regulators approved SBC’s acquisition of SNET in October 1998, giving the San Antonio, Texas-based company a foothold in a market once dominated by Bell Atlantic Corp.
SNET — founded when 21 New Haven residents paid $1.50 a month to become the world’s first subscribers to a telephone exchange service — cited the dominance of giant telecommunications companies four years ago when it sought a corporate merger partner.