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AT&T Inc.
Public
Traded as
Industry Telecommunications
Predecessor American Telephone and Telegraph Company
Founded October 5, 1983 (1983-10-05)[1]
Headquarters Dallas, Texas, United States
Key people
 Randall Stephenson (Chairman & CEO)[2]
Products
Revenue IncreaseUS$ 132.447 billion (2014)[3]
DecreaseUS$ 13.866 billion (2014)[3]
DecreaseUS$ 6.224 billion (2014)[3]
Total assets IncreaseUS$ 292.829 billion (2014)[3]
Total equity DecreaseUS$ 86.924 billion (2014)[3]
Number of employees
 243,620 (2015)[3]
Subsidiaries
Website att.com
Footnotes / references
for DJIA listing, http://www.marketwatch.com/investing/index/djia

AT&T Inc. is an American multinational telecommunications corporation, headquartered at Whitacre Tower in downtown Dallas, Texas.[4] AT&T is the second largest provider of mobile telephone and the largest provider of fixed telephone[5] in the United States, and also provides broadband subscription television services. AT&T is the third-largest company in Texas (the largest non-oil company, behind only ExxonMobil and ConocoPhillips, and also the largest Dallas company).[6] As of May 2014, AT&T is the 23rd-largest company in the world as measured by a composite of revenues, profits, assets and market value,[7] and the 16th-largest non-oil company.[8] As of 2014, it is also the 20th-largest mobile telecom operator in the world, with over 120.6 million mobile customers.[9]

The current iteration of AT&T Inc. began its existence as Southwestern Bell Corporation, one of seven Regional Bell Operating Companies (RBOC's) created in 1983 in the divestiture of parent company American Telephone and Telegraph Company (founded 1885, later AT&T Corp.) due to the 1982 United States v. AT&T antitrust lawsuit. Southwestern Bell changed its name to SBC Communications Inc. in 1995. In 2005, SBC purchased former parent AT&T Corp. and took on its branding, with the merged entity naming itself AT&T Inc. and using the iconic AT&T Corp. logo and stock-trading symbol.

The current AT&T reconstitutes much of the former Bell System and includes ten of the original 22 Bell Operating Companies, along with the original long distance division.[10]

History

Prior to 2005 purchase by SBC

AT&T can indirectly trace its origin back to the original Bell Telephone Company founded by Alexander Graham Bell after his invention of the telephone. One of that company's subsidiaries was American Telephone and Telegraph Company (AT&T), established in 1885, which acquired the Bell Company on December 31, 1899 for legal reasons, leaving AT&T as the main company. AT&T established a network of subsidiaries in the United States that held a government-authorized phone service monopoly, formalized with the Kingsbury Commitment, throughout most of the twentieth century. This monopoly was known as the Bell System, and during this period, AT&T was also known by the nickname Ma Bell. For periods of time, the former AT&T was the world's largest phone company.

In 1982, US regulators broke up the AT&T monopoly, requiring AT&T to divest its regional subsidiaries and turning them each into individual companies. These new companies were known as Regional Bell Operating Companies, or more informally, Baby Bells. AT&T continued to operate long distance services, but thanks to the breakup, faced competition from new competitors such as MCI and Sprint.

Southwestern Bell was one of the companies created by the breakup of AT&T. It wasn't long before the company started a series of acquisitions. This includes the 1987 acquisition of Metromedia mobile business, and the acquisition of several cable companies in the early 1990s. In the later half of the 1990s, the company acquired several other telecommunications companies, including some baby bells, while selling its cable business. During this time, the company changed its name to SBC Communications. By 1998, the company was in the top 15 of the Fortune 500, and by 1999 the company was part of the Dow Jones Industrial Average.

Since 2005

In 2005, SBC purchased AT&T for $16 billion. After this purchase, SBC adopted the AT&T name and brand. The original 1885 AT&T still exists as the long-distance phone subsidiary of this company.

In September 2013, AT&T announced it would expand into Latin America through a collaboration with Carlos Slim’s America Movil.[11] On December 17, 2013, AT&T announced plans to sell its Connecticut wireline operations to Stamford-based Frontier Communications. Roughly 2,700 wireline employees supporting AT&T’s operations in Connecticut will transfer with the business to Frontier, as well as 900,000 voice connections, 415,000 broadband connections, and 180,000 U-verse video subscribers.[12]

On May 18, 2014, AT&T announced it had agreed to purchase DirecTV. In the deal, which has been approved by boards of both companies, DirecTV stockholders will receive $95 a share in cash and stock, valuing the deal at $48.5 billion. Including assumed debt, the total purchase price is about $67.1 billion. The deal was aimed at increasing AT&T's market share in the pay-TV sector; its existing U-Verse brand has modest market share (5.7 million users compared to DirecTV's 20 million US customers as of 2014) and operates in only 22 states. It will also give AT&T access to fast-growing Latin American markets, where DirecTV has 18 million subscribers. Additionally, the purchase will allow the AT&T to offer TV through both fiber-optic lines and satellites by maintaining the DirecTV brand as a separate subsidiary, and give the company greater flexibility in creating TV/phone/Internet bundles.[13] The deal will face regulatory approval by the FCC, the U.S. Department of Justice, and some Latin American governments. It is expected to take about 12 months to complete.[14]

It was announced on November 7, 2014, that Mexican carrier Iusacell is being acquired by AT&T, in order to create a wider North American network.[15]

In January 2015, AT&T announced it would be acquiring the bankrupt Mexican wireless business of NII Holdings for around $1.875 billion.[16]

Political contributions and lobbying

According to the Center for Responsive Politics, AT&T is the second-largest donor to United States political campaigns,[17] and the top American corporate donor,[18] having contributed more than US$47.7 million since 1990, 56% and 44% of which went to Republican and Democratic recipients, respectively.[19] Also, during the period of 1998 to 2010, the company expended US$130 million on lobbying in the United States.[18] A key political issue for AT&T has been the question of which businesses win the right to profit by providing broadband internet access in the United States.[20]
In 2005, AT&T was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[21][22][23]

American Legislative Exchange Council

Bill Leahy, representing AT&T, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).[24]

Legislation

AT&T supported the Federal Communications Commission Process Reform Act of 2013 (H.R. 3675; 113th Congress), a bill that would make a number of changes to procedures that the Federal Communications Commission (FCC) follows in its rulemaking processes.[25] The FCC would have to act in a more transparent way as a result of this bill, forced to accept public input about regulations.[26] Executive Vice President - Federal Relations Tim McKone said that the bill's "much needed institutional reforms will help arm the agency with the tools to keep pace with the Internet speed of today's marketplace. It will also ensure that outmoded regulatory practices for today's competitive marketplace are properly placed in the dustbin of history."[27]

Landline operating companies

Of the twenty-four companies that were part of the Bell System, ten are a part of the current AT&T:[28]

Former operating companies

The following companies have gone to defunct status or sold under SBC/AT&T ownership:

Future of rural landlines

AT&T stated that it would declare its intentions for its rural landlines on November 7, 2012.[29] AT&T had previously announced that it was considering a sale of its rural landlines, which are not wired for AT&T's U-verse service; however, it has also stated that it may keep the business after all.
AT&T would not be the first Baby Bell to sell off rural landlines. Ameritech sold some of its Wisconsin lines to CenturyTel in 1998; BellSouth sold some of its lines to MebTel in the 2000s; U S WEST sold many historically Bell landlines to Lynch Communications and Pacific Telecom in the 1990s; Verizon sold many of its New England lines to FairPoint in 2008 and its West Virginia operations to Frontier Communications in 2010.

It was announced on October 24, 2014 that Frontier Communications would officially take over control of the AT&T landline network in Connecticut at 12:1 October 25, 2014 after being approved by state utility regulators in early October 2014. The deal worth about $2 billion included Frontier inheriting about 2,500 of AT&T's employees and many of AT&T buildings.[30]

Corporate structure


AT&T office in San Antonio, Texas with new logo and orange highlight from the former Cingular

AT&T Inc. has retained the holding companies it has acquired over the years resulting in the following corporate structure:

Corporate governance


Stephenson at the 2008 World Economic Forum

AT&T's current board of directors:[31]

Criticism and controversies

Hemisphere database

The company maintains a database of call detail records of all telephone calls that have passed through its network since 1987. AT&T employees work at High Intensity Drug Trafficking Area offices (operated by the Office of National Drug Control Policy) in Los Angeles, Atlanta, and Houston so data can be quickly turned over to law enforcement agencies. Records are requested via administrative subpoena, without the involvement of a court or grand jury.

Censorship

In September 2007, AT&T changed their legal policy to state that "AT&T may immediately terminate or suspend all or a portion of your Service,[32] any Member ID, electronic mail address, IP address, Universal Resource Locator or domain name used by you, without notice for conduct that AT&T believes"..."(c) tends to damage the name or reputation of AT&T or its parents, affiliates and subsidiaries."[33] By October 10, 2007 AT&T had altered the terms and conditions for its Internet service to explicitly support freedom of expression by its subscribers, after an outcry claiming the company had given itself the right to censor its subscribers' transmissions.[34] Section 5.1 of AT&T's new terms of service now reads "AT&T respects freedom of expression and believes it is a foundation of our free society to express differing points of view. AT&T will not terminate, disconnect or suspend service because of the views you or we express on public policy matters, political issues or political campaigns."[35]

Privacy controversy


Diagram of how alleged wiretapping worked. From EFF court filings[36]
 
In 2006, the Electronic Frontier Foundation lodged a class action lawsuit, Hepting v. AT&T, which alleged that AT&T had allowed agents of the National Security Agency (NSA) to monitor phone and Internet communications of AT&T customers without warrants. If true, this would violate the Foreign Intelligence Surveillance Act of 1978 and the First and Fourth Amendments of the U.S. Constitution. AT&T has yet to confirm or deny that monitoring by the NSA is occurring. In April 2006, a retired former AT&T technician, Mark Klein, lodged an affidavit supporting this allegation.[37][38] The Department of Justice has stated they will intervene in this lawsuit by means of State Secrets Privilege.[39] In July 2006, the United States District Court for the Northern District of California – in which the suit was filed – rejected a federal government motion to dismiss the case. The motion to dismiss, which invoked the State Secrets Privilege, had argued that any court review of the alleged partnership between the federal government and AT&T would harm national security. The case was immediately appealed to the Ninth Circuit. It was dismissed on June 3, 2009, citing retroactive legislation in the Foreign Intelligence Surveillance Act.[citation needed] In May 2006, USA Today reported that all international and domestic calling records had been handed over to the National Security Agency by AT&T, Verizon, SBC, and BellSouth for the purpose of creating a massive calling database.[40] The portions of the new AT&T that had been part of SBC Communications before November 18, 2005 were not mentioned.
On June 21, 2006, the San Francisco Chronicle reported that AT&T had rewritten rules on their privacy policy. The policy, which took effect June 23, 2006, says that "AT&T – not customers – owns customers' confidential info and can use it 'to protect its legitimate business interests, safeguard others, or respond to legal process.' "[41]

On August 22, 2007, National Intelligence Director Mike McConnell confirmed that AT&T was one of the telecommunications companies that assisted with the government's warrantless wire-tapping program on calls between foreign and domestic sources.[42]

On November 8, 2007, Mark Klein, a former AT&T technician, told Keith Olbermann of MSNBC that all Internet traffic passing over AT&T lines was copied into a locked room at the company's San Francisco office – to which only employees with National Security Agency clearance had access.[43]
AT&T keeps for five to seven years a record of who text messages whom and the date and time, but not the content of the messages.[44]

Intellectual property filtering

In January 2008, the company reported plans to begin filtering all Internet traffic which passes through its network for intellectual property violations.[45] Commentators in the media have speculated that if this plan is implemented, it would lead to a mass exodus of subscribers leaving AT&T,[46] although this is misleading as Internet traffic may go through the company's network anyway.[45] Internet freedom proponents used these developments as justification for government-mandated network neutrality.

Discrimination against local Public-access television channels

AT&T is accused by community media groups of discriminating against local Public, educational, and government access (PEG) cable TV channels:, by "impictions that will severely restrict the audience".[47]

According to Barbara Popovic, Executive Director of the Chicago public-access service CAN-TV, the new AT&T U-verse system forces all Public-access television into a special menu system, denying normal functionality such as channel numbers, access to the standard program guide, and DVR recording.[47] The Ratepayer Advocates division of the California Public Utilities Commission reported: "Instead of putting the stations on individual channels, AT&T has bundled community stations into a generic channel that can only be navigated through a complex and lengthy process."[47]

Sue Buske (president of telecommunications consulting firm the Buske Group and a former head of the National Federation of Local Cable Programmers/Alliance for Community Media) argue that this is "an overall attack [...] on public access across the [United States], the place in the dial around cities and communities where people can make their own media in their own communities".[47]

Information security

In June 2010, a hacker group known as Goatse Security discovered a vulnerability within the AT&T that could allow anyone to uncover email addresses belonging to customers of AT&T 3G service for the Apple iPad.[48] These email addresses could be accessed without a protective password.[49] Using a script, Goatse Security collected thousands of email addresses from AT&T.[48] Goatse Security informed AT&T about the security flaw through a third party.[50] Goatse Security then disclosed around 114,000 of these emails to Gawker Media, which published an article about the security flaw and disclosure in Valleywag.[48][50] Praetorian Security Group criticized the web application that Goatse Security exploited as "poorly designed".[48]

Accusations of enabling fraud

In March 2012, the United States federal government announced a lawsuit against AT&T. The specific accusations state that AT&T "violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and sought to use it for fraudulent purposes. The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States. The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T's call volume. The government's complaint alleges that AT&T improperly billed the TRS Fund for reimbursement of these calls and received millions of dollars in federal payments as a result."[51]

Naming rights and sponsorships

Buildings


AT&T Midtown Center in Atlanta, Georgia

Venues


AT&T Center in San Antonio, Texas

Sponsorships

Miscellaneous

Global presence

AT&T offers services in many locations throughout the Asia Pacific; its regional headquarters is located in Hong Kong.[54]

It was announced on November 7, 2014, that Mexican carrier Iusacell is being acquired by AT&T.[15]