When Michael Armstrong started buying Cable companies in the late nineties, the strategy was simple to explain. The cable companies gave AT&T a direct high bandwidth pipeline into the home, bypassing the need to pay regional bell companies for use of their network. Additionally, AT&T would be able to offer Cable TV, Local & Long distance phone, cell phone, and broadband internet access all on one bill. With the core AT&T long distance business crumbling, Armstrong broke up AT&T under the belief that components of the business were undervalued. Armstrong spoke at a few of my classes and when I asked him if breaking up the company was premature he stated that at the time when Worldcom and other Telecos were cooking the books, the had to find a way to appease investors and give them a return on their money, and the best way was too break up the company.
Almost every week it seems like companies are trying to piece together the products that AT&T had gathered. Today Time Warner announced that they are considering getting into the cell phone business. They will most likely resell cell service from another provider, but they are intrigued by the concept of offering the exact same bundle that AT&T was interested in offering.
Everyday it appears that Armstrong made the moves to turn AT&T into a competitor, and then tore it apart in a short sighted move. The only people that got rich off of Armstrong's moves were the investment bankers.
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