Ameritech

Ameritech was an American telecommunications holding company created as a consequence of the 1984 breakup of the Bell System. It was one of seven Regional Bell Operating Companies, commonly called Baby Bells, established when AT&T divested its local telephone operations under a federal antitrust settlement. Ameritech owned the five former Bell System operating companies serving Illinois, Indiana, Michigan, Ohio, and Wisconsin: Illinois Bell, Indiana Bell, Michigan Bell, Ohio Bell, and Wisconsin Bell. The company’s central business was local telephone service. Its operating companies maintained fixed-line networks and provided voice access to residential, business, institutional, and government customers throughout the five-state territory. During its early years, the inherited Bell company names remained prominent, although public signage often identified the businesses as Ameritech companies. In January 1993, Ameritech retired the separate Bell branding for marketing purposes and presented a unified Ameritech identity across its territory, while the underlying legal entities continued to exist. Ameritech expanded beyond traditional local wireline service as the telecommunications industry changed during the 1990s. Ameritech Cellular, formerly known as Ameritech Mobile Communications, operated cellular networks in major cities in its regional market. The company also participated in Americast, a cable television venture involving telephone companies, and operated Ameritech Advanced Data Services. Its Chicago-based Advanced Data Services network access point was one of the original National Science Foundation exchange points and supported connections among research, education, and commercial networks. The company became a major participant in the consolidation of the post-divestiture telecommunications sector. In May 1998, Ameritech announced an intended merger with SBC Communications valued at approximately $62 billion. The proposed combination raised concerns among federal and state regulators because it joined two large regional telephone companies and could have reduced competition in local and wireless markets. The Federal Communications Commission approved the transaction on October 6, 1999, after imposing competition-related conditions. The companies completed the merger on October 8, 1999. Among the conditions were requirements that the combined company enter local telephone markets outside its traditional territory within a specified period or face a substantial penalty. Regulators also required the divestiture of Ameritech Cellular assets in Chicago, which were sold to GTE in 1999. These measures addressed concerns about the merged company’s position in both fixed-line and mobile communications. After the merger, Ameritech ceased to operate as an independent corporate group. SBC changed the legal name of Ameritech Corporation to SBC Teleholdings, Inc. in 2003 and marketed the business as SBC Midwest. Following SBC’s adoption of the AT&T identity after its acquisition of AT&T Corporation, the holding company became AT&T Teleholdings, Inc. in 2006 and operated under the AT&T Midwest name. Some subsidiaries retained Ameritech in their legal names, but the consumer-facing Ameritech brand disappeared. Ameritech’s historical significance rests on its role in the regionalization of the American telephone system after divestiture and the subsequent reconsolidation of the industry.

Ameritech emerged from the structural separation of AT&T’s local telephone operations in 1984. The divestiture followed the resolution of a major federal antitrust case and divided the former Bell System into a long-distance and equipment business associated with AT&T and seven regional local telephone companies. Ameritech became the regional holding company for five former Bell System companies in the Midwest: Illinois Bell Telephone Company, Indiana Bell Telephone Company, Michigan Bell Telephone Company, Ohio Bell Telephone Company, and Wisconsin Bell. The new company was headquartered in Chicago and inherited a large local-access network serving five states. Its principal responsibility was to operate and expand fixed-line telephone infrastructure, including exchanges, customer access lines, switching systems, and related local communications services. Residential and business telephone service remained the foundation of the organization. For roughly its first nine years, the inherited Bell names remained part of the public identity of the operating companies, although the companies were frequently described as being Ameritech companies. In January 1993, Ameritech introduced a unified commercial identity and retired the separate Bell brands from its marketing. The underlying companies continued to exist as legal entities, but they conducted business using formulations such as Ameritech Illinois, Ameritech Indiana, Ameritech Michigan, Ameritech Ohio, and Ameritech Wisconsin. This change made Ameritech the principal customer-facing brand across its regional footprint. The regulatory and technological environment changed substantially during the 1990s. The company pursued activities beyond traditional local wireline service, including mobile communications through Ameritech Cellular, which had previously operated under the Ameritech Mobile Communications name. Ameritech Cellular built a presence in major cities in the company’s territory. Ameritech also participated in Americast, a cable television venture with other telephone companies, reflecting the industry’s attempts to combine telephone, television, and related communications services. Ameritech Advanced Data Services represented another diversification. Its Chicago network access point was among the original National Science Foundation exchange points in the United States. The facility connected higher-education and research networks through the Star TAP program and also supported commercial networks. After the SBC merger, the operation was known as the SBC Network Access Point or SBC/AADS NAP. By the late 1990s, regional telephone companies were again becoming involved in large-scale consolidation. In May 1998, Ameritech and SBC Communications announced their intention to merge. The transaction generated regulatory concern because both companies controlled substantial local telecommunications operations and SBC already held interests in wireless communications. Approval required concessions designed to encourage competition. The FCC’s conditions included an obligation for the combined company to offer local telephone service in thirty markets outside its established territory within thirty months, or pay a stated penalty. The parties also had to sell Ameritech Cellular’s Chicago assets to GTE to avoid excessive concentration in the local mobile market. The FCC approved the transaction on October 6, 1999, and the merger was completed on October 8. Ameritech was absorbed into SBC’s organizational structure and no longer functioned as an independent publicly traded regional holding company. Richard Notebaert, who had been Ameritech’s chairman and chief executive, later became chief executive of Qwest in 2002. SBC subsequently phased out the Ameritech corporate identity. On January 15, 2003, Ameritech Corporation was legally renamed SBC Teleholdings, Inc. and operated under the SBC Midwest designation. On January 15, 2006, after SBC had acquired AT&T Corporation and adopted the AT&T name, the holding company became AT&T Teleholdings, Inc. and did business as AT&T Midwest. Further AT&T reorganizations brought other former regional telephone holdings into the structure. Although some subsidiaries retained Ameritech in their legal names, the Ameritech brand no longer operated as a major standalone consumer identity. Its history illustrates both the regional fragmentation produced by the Bell System breakup and the later return to national-scale telecommunications ownership.

1. 2006The former Ameritech holding company becomes AT&T Teleholdings

   Following SBC’s adoption of the AT&T brand, the holding company is renamed AT&T Teleholdings, Inc. and operates as AT&T Midwest.

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2. 2003Ameritech Corporation becomes SBC Teleholdings

   The legal entity is renamed SBC Teleholdings, Inc. and conducts business as SBC Midwest.

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3. 1999FCC approves the SBC-Ameritech merger

   The FCC approves the transaction subject to competition-enhancing conditions, including market-entry commitments and a Chicago wireless-asset divestiture.

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4. 1999Merger with SBC Communications is completed

   SBC and Ameritech complete their merger on October 8, ending Ameritech’s independent corporate operation.

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5. 1998Ameritech announces its planned merger with SBC Communications

   Ameritech announces an intended merger with SBC Communications valued at approximately $62 billion, beginning an extended regulatory review.

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6. 1994Ameritech Advanced Data Services joins the early U.S. network-exchange infrastructure

   The Chicago-based AADS network access point becomes one of the original National Science Foundation exchange points, serving research, education, and commercial networks.

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7. 1993Unified Ameritech branding replaces inherited Bell marketing

   Ameritech retires the separate Bell brands in customer-facing marketing across its five-state territory while retaining the operating companies as legal entities.

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8. 1984Ameritech begins operating after the Bell System breakup

   Ameritech is established as one of seven Regional Bell Operating Companies and becomes the holding company for five former Bell System telephone companies in the Midwest.

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Regional integrated telecommunications operator serving the U.S. Midwest

• Local telephone serviceFixed telecommunications1984

  Ameritech’s principal offering was local fixed-line telephone service across Illinois, Indiana, Michigan, Ohio, and Wisconsin. The service depended on the inherited Bell System local networks operated by the company’s five regional subsidiaries. It served residential, business, institutional, and government customers and included the basic operation, maintenance, and expansion of local telephone access infrastructure.

• Ameritech CellularWireless telecommunications

  Ameritech Cellular was the company’s wireless communications business, previously known as Ameritech Mobile Communications. It operated cellular networks in major cities across parts of Ameritech’s regional territory. The Chicago assets were sold to GTE in 1999 as a condition associated with the SBC merger, while the broader Ameritech identity was subsequently absorbed into SBC.

• Americast cable television serviceCable television

  Ameritech participated in the Americast venture with other telephone companies during the 1990s. The venture represented an effort by regional telephone operators to enter cable television and offer communications services beyond traditional local voice networks. It operated only in selected areas and did not become a continuing standalone Ameritech consumer line.

• Ameritech Advanced Data ServicesInternet exchange and network services1994

  Ameritech Advanced Data Services operated a Chicago network access point that connected research, higher-education, and commercial networks. Through the Star TAP program, the facility supported exchange among eligible academic and research networks and commercial systems. After the SBC merger, the operation was associated with the SBC Network Access Point and SBC/AADS NAP names.

• 2006Align the former Ameritech business with the AT&T brandStrategy

  SBC acquired AT&T Corporation and adopted the AT&T name for the combined telecommunications group.

  What changed. SBC renamed the holding company AT&T Teleholdings, Inc. and operated it as AT&T Midwest.

  Aftermath. Ameritech disappeared as a standalone operating brand, although some legal subsidiaries continued to contain the name.

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• 2003Replace the Ameritech corporate identity with SBC MidwestStrategy

  Ameritech had been integrated into SBC after the 1999 merger.

  What changed. SBC changed the legal name of Ameritech Corporation to SBC Teleholdings, Inc. and adopted the SBC Midwest doing-business-as designation.

  Aftermath. The Ameritech name was removed from the principal corporate and consumer identity.

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• 1999Complete the SBC Communications mergerM&A

  The FCC required conditions intended to protect competition in local and wireless telecommunications markets.

  What changed. SBC and Ameritech completed their merger on October 8, after the FCC approved the transaction on October 6.

  Aftermath. Ameritech ceased to operate as an independent company and was integrated into SBC.

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• 1999Divest Chicago cellular assets to GTEOther

  Regulators were concerned that SBC’s existing wireless interests combined with Ameritech Cellular could create excessive market power in Chicago.

  What changed. Ameritech Cellular’s Chicago assets were sold to GTE as part of the merger-related regulatory conditions.

  Aftermath. The divestiture addressed a specific wireless concentration concern before the merger was completed.

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• 1998Agree to merge with SBC CommunicationsM&A

  Regional telecommunications companies were pursuing expansion and consolidation, while Ameritech and SBC sought greater scale.

  What changed. Ameritech announced an intended merger with SBC Communications valued at approximately $62 billion.

  Aftermath. The transaction underwent extensive regulatory review and was approved only after competition-related commitments were accepted.

  Announced transaction value. $62 billion (1998 announcement)

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• 1993Adopt a unified Ameritech customer brandStrategy

  Ameritech operated five former Bell System companies whose inherited names remained familiar in their respective states.

  What changed. The company retired the Bell names from public marketing and used the Ameritech identity across its five-state territory while preserving the companies as legal entities.

  Aftermath. Ameritech became the principal regional consumer brand for the company’s fixed-line operations.

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• 2006Ameritech holding company adopts AT&T Teleholdings name

  After SBC adopted the AT&T identity, the former Ameritech holding company became AT&T Teleholdings, Inc. and operated as AT&T Midwest.

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• 2003Ameritech Corporation renamed SBC Teleholdings

  SBC changed the legal name of Ameritech Corporation to SBC Teleholdings, Inc., while the business adopted the SBC Midwest designation.

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• 1999FCC approves SBC-Ameritech merger with competition conditions

  The FCC approved the merger after requiring measures including out-of-territory local-service expansion and the divestiture of Ameritech Cellular assets in Chicago.

  M&ARegulation
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• 1999SBC and Ameritech complete their merger

  SBC Communications and Ameritech formally completed their merger on October 8, ending Ameritech’s independent corporate existence.

  M&A
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• 1999Ameritech Cellular Chicago assets sold to GTE

  Ameritech sold its Chicago cellular assets to GTE as part of the regulatory arrangements associated with the SBC merger.

  M&ARegulation
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• 1998Ameritech announces intended merger with SBC Communications

  Ameritech announced a proposed combination with SBC Communications valued at approximately $62 billion. The transaction prompted scrutiny from federal and state regulators concerned about competition in local and wireless telecommunications.

  M&ARegulation
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1. Ameritech
2. FCC approves SBC-Ameritech merger subject to competition-enhancing conditions