Western Railroad Discussion > A Vestige of the Southern Pacific Disappears Today

Founded in Abilene, Kansas, as Brown Telephone Company in 1899, successor United Telecom acquired the Southern Pacific Railroad Internal Network Telephony, or SPRINT, in the 1980s.  Merged today into T-Mobile.

https://www.kansascity.com/news/business/article244303122.html

Bob Willer
Overland Park, Kan.

I think the name Sprint lives on in the internet backbone business.  The fiber optic network, some of which is built along railroad right of way, is still a valuable asset.  It's just not a consumer or end-user business.
 

Weren't a lot of these valuable assets, including extensive land holdings, stripped from Southern Pacific in conjunction with the failed ATSF merger, leaving them a debt ridden railroad with limited assets of value?

Sean

radar Wrote:
-------------------------------------------------------
> I think the name Sprint lives on in the internet
> backbone business.  The fiber optic network, some
> of which is built along railroad right of way, is
> still a valuable asset.  It's just not a consumer
> or end-user business.
>  

broken_link Wrote:
-------------------------------------------------------
> Weren't a lot of these valuable assets, including
> extensive land holdings, stripped from Southern
> Pacific in conjunction with the failed ATSF
> merger, leaving them a debt ridden railroad with
> limited assets of value?
>
> Sean
>
phil anshutz  put in a bunch of fiber for level 3 i think

OSWishram Wrote:
-------------------------------------------------------
> Founded in Abilene, Kansas, as Brown Telephone
> Company in 1899, successor United Telecom acquired
> the Southern Pacific Railroad Internal Network
> Telephony, or SPRINT, in the 1980s.  Merged today
> into T-Mobile.

The merger was completed on April 1, 2020.

Today August 2 T-Mobile officially stops all use of the Sprint name. 

radar Wrote:
-------------------------------------------------------
> I think the name Sprint lives on in the internet
> backbone business.  The fiber optic network, some
> of which is built along railroad right of way, is
> still a valuable asset.  It's just not a consumer
> or end-user business.
>  

Sprint Corporation merged into T-Mobile on April 1, 2020 in its entirety. 

Any/all use of the Sprint name is being permanently discontinued. The backbone infrastructure will now fall under the name "T-Mobile Wholesale"

broken_link Wrote:

> Weren't a lot of these valuable assets, including
> extensive land holdings, stripped from Southern
> Pacific in conjunction with the failed ATSF
> merger, leaving them a debt ridden railroad with
> limited assets of value?

What actually happened was that one holding company (SFSP) was ordered by the ICC to sell the Southern Pacific Railroad to another holding company (Philip Anschutz's AnsCo).  Both holding companies held another railroad (SFSP had Santa Fe; AnsCo had Rio Grande), and both were highly diversified with other valuble non-railroad companies and assets.  That Anschutz chose not to commit resources to rehabbing the SP can't be laid at Santa Fe's feet.

Anschutz founded Qwest Communications in Denver to take over SP's network in the very late 1990s. I worked for them in 2000-2002. Our Internet backbone map mimiced the railroad main lines from coast to coast. Anschutz/Qwest worked with railroads nationwide to gain access to their ROW and lay fiber.
We had enough capacity at the time to handle all Internet traffic if AT&T, Williams, Verizon, all went down at the same time.
Helluva business model, a little bit too much Wall Street chicanery. Our CEO did federal prison time. And I was laid off.

broken_link Wrote:
-------------------------------------------------------
> Weren't a lot of these valuable assets, including
> extensive land holdings, stripped from Southern
> Pacific in conjunction with the failed ATSF
> merger, leaving them a debt ridden railroad with
> limited assets of value?
>

If I recall correctly, PHLone told us that SP got half a billion dollars cash for divesting Sprint. It ended up in Santa Fe's coffers after the failed SPSF merger.

Best regards,

Rob L.

OSWishram Wrote:
-------------------------------------------------------
> Founded in Abilene, Kansas, as Brown Telephone
> Company in 1899, successor United Telecom acquired
> the Southern Pacific Railroad Internal Network
> Telephony, or SPRINT, in the 1980s.  Merged today
> into T-Mobile.
>
> https://www.kansascity.com/news/business/article24
> 4303122.html
>
> Bob Willer
> Overland Park, Kan.

And now what does this do toward a renaming of the SPRINT CENTER in Kansas City?  Possibly YES or NO.

rrman6 Wrote:
-------------------------------------------------------
> OSWishram Wrote:
> --------------------------------------------------
> -----
> > Founded in Abilene, Kansas, as Brown Telephone
> > Company in 1899, successor United Telecom
> acquired
> > the Southern Pacific Railroad Internal Network
> > Telephony, or SPRINT, in the 1980s.  Merged
> today
> > into T-Mobile.
> >
> >
> https://www.kansascity.com/news/business/article24
>
> > 4303122.html
> >
> > Bob Willer
> > Overland Park, Kan.
>
> And now what does this do toward a renaming of the
> SPRINT CENTER in Kansas City?  Possibly YES or
> NO.

When does that naming rights contract end? If it's more then a couple of years it could end up as the T-Mobile Center.
I guess it would depend on how fast they want to make the Sprint name go away.

Evan_Werkema Wrote:
-------------------------------------------------------
> What actually happened was that one holding
> company (SFSP) was ordered by the ICC to sell the
> Southern Pacific Railroad to another holding
> company (Philip Anschutz's AnsCo).

I thought it was they just had to sell one of the railroads. No? In the end we know they did sell the SP to Anshcutz, but were they required to sell to anyone in particular?

https://www.latimes.com/archives/la-xpm-1986-07-25-mn-245-story.html



Edited 3 time(s). Last edit at 08/02/20 20:56 by ble692.

ble692 Wrote:

> I thought it was they just had to sell one of the railroads.

The ICC order was to sell "one or both" railroads.  Many on Wall Street at the time favored selling both railroads - they liked SFSP better as a real estate and resources company than as a transportation company (the Santa Fe side also had substantial non-rail holdings and business enterprises).  In the end, most of the non-rail holdings of what became Santa Fe Pacific Corp had to be sold anyway to fend off a hostile takeover bid in the late 80's after the merger rejection and the sale of SP.  I can't vouch for the "half billion" mentioned above, but if it was anything like the proceeds from the other divestitures, it went straight into stockholders' pockets to keep them from backing the takeover. 

The cash went to the stockholders proved successful in repelling the hostile takeover.  Krebs talks about this in his book.  He favored selling the SP because, as he put it, "I couldn't see going into a room of Santa Fe directors and selling the Santa Fe.  And the Santa Fe was clearly the better railroad."  Krebs went on to detail the divestitures, not including Sprint, and related that the spin offs all did poorly or were gobbled up, while the Santa Fe performed quite well. 

On a more off topic note, I'm hoping to see the integration of the Sprint and T-Mobile networks soon.  I have T-Mobile, long story inherited, and hopefully Sprint's better coverage will improve T-Mobile's.  However, I was told the two companies have differing technologies so this may be later rather than sooner.  

Nick Tharalson,
Marion, IA 

ntharalson Wrote:
-------------------------------------------------------
> On a more off topic note, I'm hoping to see the
> integration of the Sprint and T-Mobile networks
> soon.  I have T-Mobile, long story inherited, and
> hopefully Sprint's better coverage will improve
> T-Mobile's.  However, I was told the two
> companies have differing technologies so this may
> be later rather than sooner.  

Sprint's network uses CDMA while T-Mobile uses GSM. The 2 are not compatible. However, some newer phones are capable of being on either GSM or CDMA. 

3751 said...  
>
> Sprint's network uses CDMA while T-Mobile uses
> GSM. The 2 are not compatible. However, some newer
> phones are capable of being on either GSM or
> CDMA. 

many towers are 3rd parties, or competitors that lease space, whatever the customer pays for they will put up there

dan Wrote:
-------------------------------------------------------
> 3751 said...  
> >
> > Sprint's network uses CDMA while T-Mobile uses
> > GSM. The 2 are not compatible. However, some
> newer
> > phones are capable of being on either GSM or
> > CDMA. 
>
> many towers are 3rd parties, or competitors that
> lease space, whatever the customer pays for they
> will put up there

Um, yeah OK true, whatever. What does that have to do with GSM and CDMA incompatibility? Or the comment by ntharalson that I was responding to?

After the ICC rejected the SPSF merger in July 1987, one Wall Street bank analyst at the time expressed disappointment because "thousands" of miles of track could have been eliminated by the merger.  33 year-old Heather Gradison, wife of a congressman, was the ICC's sole vote in favor of the merger.  She was said in the New York Times to be in favor of radical de-regulation.

Some of us who read these posts were around when Sprint, along with others, took on 
AT&T (Mighty Ma Bell) in an antitrust suit which eventually broke up the Bell System.



Edited 1 time(s). Last edit at 08/04/20 14:10 by ceedy.

ceedy Wrote:
-------------------------------------------------------
> Some of us who read these posts were around when
> Sprint, along with others, took on 
> AT&T (Mighty Ma Bell) in an antitrust suit which
> eventually broke up the Bell System.

And yet today AT&T Inc. is probably larger and more powerful than it was pre-lawsuit.