When AT&T announced its intention to acquire BellSouth, it offered Washington the chance to approve a reconstruction of the old AT&T, which regulators broke up in perhaps the largest ever corporate divestiture. If recent history is any guide, Washington will approve the deal.

From the 1930s through 1980, AT&T, then short for American Telephone and Telegraph, was one of the world’s largest corporations. Competition at AT&T was largely internal as it faced few rivals in telecommunications services and equipment manufacturing. True to the Schumpeterian view of monopolies, AT &T invested heavily in research, development, and politicians.

Despite those investments, AT&T failed to escape the attention of the Reagan antitrust authorities. The Reaganites negotiated a corporate divestiture, and AT&T disintegrated into seven regional local operating companies and one company retaining the remnants of the old AT&T: its name, manufacturing business, long-distance business, and international business.

The divestiture was not structured to create eight companies that would compete head to head. In fact, immediately after divestiture, each was largely its own monopoly. But each company also had the technical and financial wherewithal to grow and ultimately compete with one another.

The divestiture in the early 1980s was driven by Washington, not businesses, which were on the whole pleased with – and frightened by – AT&T. After the divestiture, major operational decisions were reviewed by regulators and an omnipresent federal judge in Washington, Harold Greene. That system remained in place until it was replaced by the Telecommunications Act of 1996.

Of the original eight divested companies, four remain. BellSouth, aside from its acquisition of wireless assets that now form a substantial share of Cingular, is remarkably the same. USWest was acquired by Qwest six years ago. BellAtlantic acquired NYNEX, GTE, and wireless assets; it changed its name to Verizon. SBC acquired Pacific Telesis, SNET, Ameritech, and wireless assets. Perhaps to emphasize its re-creation of the past, SBC changed its name to AT&T after acquiring that company last year.

Of dozens of telecom mergers in the past 10 years, only one has been blocked by antitrust authorities in Washington: WorldCom’s acquisition of Sprint in 2000. Under most applications of contemporary antitrust law, the merger of two geographically separated monopolies does not increase market power and therefore poses no antitrust concerns. Under this prevailing legal logic, the descendants of the former AT&T monopoly could sequentially recombine themselves. The CEO of AT&T, Ed Whitacre, has taken notice.

Washington antitrust officials are generally unconcerned about the reconstruction of the old AT&T because telecommunications markets are substantially different today from those of 25 years ago. Long-distance services are no longer likely to be a separable market. Cable and wireless services have changed the nature of telecommunications services. Microsoft, Google, Intel, eBay, Cisco, and others that for the most part were born since divestiture have commercial activities that might have been part of the old AT&T empire. No more. These new technology companies have no linkage to the old AT&T, and their market capitalizations dwarf the capitalizations of even the largest telecommunications carriers.

Yet Washington retains the rarely exercised potential to block telecom mergers. Ironically, it was AT&T from 1996-2004 that consistently opposed, unsuccessfully, every acquisition launched by the company then known as SBC. Merging parties inevitably made hollow promises to Washington, which in turn imposed toothless conditions. For example, SBC premised its 2000 acquisition of Ameritech on its need to compete nationwide. Taking SBC at its word, regulators required it to offer business services in dozens of cities outside its usual geographic region within a few years. Whether or not it met those promises in a timely manner, SBC will ultimately offer those very services as a result of acquiring AT&T and BellSouth, not Ameritech.

After it acquires BellSouth, AT&T will be the local carrier in 22 states covering more than half of the American population. Sequential acquisitions of Verizon and Qwest could leave AT&T once again with nearly ubiquitous coverage of the nation. The company that markets itself as the “New AT&T,” letters that have had no formal meaning for a decade, might just as well be known as “Another Telecom Takeover.”

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.