ATT/T-Mobile Chases Off Yet One More Customer, Only This One Has Thousands Of Readers

Karl Denninger pulled the plug on his ATT/T-Mobile accounts, and details why in his latest post.

While running TV spots touting the joys of their brave new alliance, once again our friends at T go about their daily business of crewing customers to the wall. It's who they are, it's what they do. They will, sooner or later, go down the crapper, because they have obligations awaiting them that can't possibly be met. That's where the taxpayer comes in, to provide the safety net. But, that's another story for later.

Meanwhile, they alienated a customer whose opinions matter a lot, to a lot of people.

Does anyone at a place like T ever sit down and do the math that says:

'OK, we may make a few hundred bucks on this quarter's earnings, but we've pissed off a long-time customer in the process. What will that cost, since he'll never ever come back? His children and family will never be our customers for the next twenty years or so. He and his friends all go church, PTA, golf course, pub, and compare notes with one another. Our credibility gets dinged with, say, fifty potential customers every time we screw one over. Does this make sense for our business?'

OS drives a vintage 2000 Dodge pickup around his county--trash to dump, plants for the garden, golf clubs, etc. It's really been reliable, and even fun to tool around in. However, every one of those trucks around here from that same vintage were sent out of the factory with paint jobs that completely, utterly, failed. They look atrocious. And don't get OS started about the dealership, and the assholes at Mercedes-Benz credit who raped the family on the financing...OS now faces a decision in the next year--put some bucks into fixing up the old Dodge, or buy an F-150 or Toyota.

Notice what's not on that list of choices?

With a business culture like this, do we wonder why we struggle as an economy?

How Many Ways Can You Say: 'ATT Sucks'?

Here's one.

OS's latest adventure with Mama T came Thursday, when he needed to have some inside wiring work (for which he loyally pays monthly), attended to.

'We'll be there next Thursday by 5, sir.'

'But, my phones are all out, and I'm paying for this service already. I have to wait a week?'

'We'll be there next Thursday by 5, sir. Will anyone be home between 1 and 5?'

'But, my phones are all out, and I'm paying for this service already. I have to wait a week?'

'While we have you on the phone, sir, we want to sell you a package whereby we capture all your phone service, cable TV, and internet--so we can continue to serve you at this high level of quality....'

And, on Monday, they start gouging for internet usage...

T is in trouble. They are scratching for any dollar of revenue they can find anywhere from any of its hostages customers...

Accounting sleights-of-hand abound to obscure the reality of unfunded pension obligations about to blow up in the shareholder's faces. A customer approach that seeks only to sell stuff to the the next sucker, and screw the present customer. OS still wonders if the day will come when ATT is declared a bank, so it can go hoover up sum-oh-dat-free-munney-hunney that Ben loves to hand out. 'Cuz, lissen ya'll, theze guyz iz gunna go broke, and the day is coming sooner rather than later. Wait about six months, when all those customers start seeing phone bills that look like mortgage payment.

Excrement, meet motorized air-moving device.

(Disclosure. No interest in T, except gonna look to short sometime this year. Looking for another phone carrier in the meantime....)

The Bailout of ATT: It's Only A Matter Of Time, And A 28 Billion Dollar Shortfall

Jesse's site always includes articles of interest on the left side, for the brave of heart.

When OS is feeling brave, he reads one. This one, about ATT's creative accounting methods to avoid having to tell shareholders the ugly truth of its pension obligations, makes for interesting reading.

When things get too ugly, let's just pretend all those pending losses actually occurred in the past. Stuff the future down the Memory Hole.

But, in the end, the reality remains:

The accounting change does not affect AT&T's cash flow or pension funding requirements. Its pension and post-retirement benefit obligations totalled $87 billion at the end of 2009, the latest figure reported. The plan assets are $28.7 billion less.

"The underlying economics of AT&T's underfunded post-retirement liabilities remains unchanged, and is a significant drag on value when appropriately accounted for," said Sanford Bernstein analyst Craig Moffett.

Well, yes, in matter of fact, these things do matter.

Pretty audacious, is it not? OS thinks that they are playing 'chicken' with the culture. After all, they're imbedded in all fifty states, have a huge employee base (much of it unionized), and T sits in pension funds from sea to shining sea.

So, when things melt down (not if, when), we'll see T execs in front of Congress and every state legislature, demanding cash and/or tax rebates and breaks forever, lest T collapse, taking all those employees, customers and pension funds down with it.

Or Da Fed will declare it a bank, and the cash pipe will be opened.

Wait for it. It's coming.

This is not a rant about accounting. It is a rant about a business culture that has decided that reality is for suckers.

Why anyone's pension plan carries one share of T, following this announcement, will be a mystery.

(Disclosure: No position in T. Not a chance of that ever changing, either.)