Re: [telecom] What scratches your personal itch?

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On Monday, March 11, 2019 at 1:29:08 PM UTC-4, Fred Atkinson wrote:

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[snip]

The book, "Heritage and Destiny: Reflections on the Bell System  
in Transition" by Alvin Von Auw offers a different perspective
on this issue.

A key item was that the monopoly and telco policies were  
established by government regulators.  Their goal was to provide
universal service by cross subsidization.  The very basic entry
level telephone service was purposely priced below cost to
make it as affordable as practical, while optional service
items, such as extension phones and long distance, were priced at  
a premium to offset that loss.

Divestiture was, in essence, a court ordered end to those
policies.

Technology improvements over the years has rendered some of
the above book moot.  But I still recommend it as it gives
us a good history of the times and a different perspective.

Re: [telecom] What scratches your personal itch?
On Mon, Mar 11, 2019 at 01:10:12PM -0700, hancock4@bbs.cpcn.com wrote:
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I don't think that divestiture was ordered by the court, and even if
it was "ordered" on paper, the change was ordered by forces outside
the legal system.

As you describe, Congress wanted cheap rural phone service. They
achieved the goal by requiring businesses to pay more (in fact, a LOT
more) than the actual basis of Long-Distance calling. The rates were
exorbitant, and they were the major cause for the "Blue Box" fraud of
the Sixties and Seventies.

However, the prime mover for divestiture wasn't Blue Boxes, but mutual
funds: in the 70's, mutual-fund managers accumulated enough of AT&T's
stock to force the board to accept the infamous consent decree which
spelled the end of Mother Bell. Thus, they brought about an end to the
long-distance charges which were affecting the fund managers' other
investments, and (as a by-product) the end of local phone subsidies in
rural areas.

I don't think the Congress minded very much: all the farmers already
had their phones, and Western Electric built cables and instruments to
such high standards that the bill for that subsidy's end didn't come
due for decades.

YMMV.

Bill

--  
Bill Horne
(Remove QRM from my email address to write to me directly)

Re: [telecom] What scratches your personal itch?
On Tuesday, March 12, 2019 at 11:03:22 PM UTC-4, Bill Horne wrote:
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It wasn't just cheap _rural_ service, but cheap basic phone service
for everyone.  In the 1970s, one could get a basic city line for about
$3.50 a month TOTAL, including the telephone set and full maintenance.

In my opinion, long distance rates by the 1970s were not
exorbitant--they had been declining for years.  In the 1970s AT&T
introduced one minute minimum and deep discounts for late night and
weekend calling.  Businesses with heavy long distance volume (and they
did not have to be that big) could get inward or outward WATS lines,
and quite a few did.

In my opinion, the Blue Box fraud was inspired more by people wanting
the technical challenge, a desire to put something over the "big phone
company", and a desire to get something for nothing.


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In my  opinion (based on  talking to  many Bell and  corporate telecom
managers at the time and dealing with the transition on the job), Bell
recognized that its old business  model of building phones that lasted
forever and  renting them  was obsolete and  no longer  profitable nor
wanted  by  the  public.   That  is, Bell  realized  the  rental  from
extensions no longer covered the cost of sending a man and a truck out
to  fix them  when the  phone  or its  wiring failed.   Bell was  also
hurting  from a  high amount  of churning--customers  moving.  By  not
sending someone out  to install or disconnect service it  would save a
lot of money.

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