AT&T Wants to Give You an 80s Makeover

[Donnachaidh]

http://www.commondreams.org/view/2011/05/28-3

If you were around in the 80s, you might be experiencing a horrible flashback right about now.

No, it’s not because legwarmers and spandex are in style again. It’s because AT&T, that monopoly that once lorded over your rotary phone, has resurfaced with a scheme to rule your mobile phone as well.

Back in the 80s, AT&T’s power was near absolute. That’s why antitrust authorities stepped in to break up the monopoly and protect the American people against abuse.

Now, with AT&T’s planned $39 billion takeover of T-Mobile, we’re reaching the danger point again. And this time control over one of the most vital forms of communication is at stake.

More at the link --

[PSPS]

1. The author needs a history lesson

A couple of factual errors in the OP:

1. The AT&T of today has no relationship whatsoever to the AT&T of the Bell System era. The Bell System ceased to exist in 1982 and the AT&T company, brand and logo were acquired by SBC (Southwestern Bell Corporation) in 2005.

2. The Bell System wasn't broken up to "protect the American people against abuse." The antitrust case never made any sense since AT&T pricing and accounting was completely under the control of state and federal regulators. The suit should have been ended, but Reagan was afraid to do so for political reasons.

[TexasProgresive]

4. Agreed=all landline service in the US was operated by regulated monopolies

There was a need to rework the regulations to allow for innovations but the breakup of Bell has actually allowed them to work towards being unregulated monopolies. Landlines are being thrown under the bus by Verizon and ATT. The real reason is they are still regualated to some degree. When landlines become extinct that phone companies will be in hog heaven. They will have what they always wanted- unregulated metered service. That's what you get with cell phones.

[drmeow]

5. Actually, cell phones do fall

under some of the regulation. The problem is cell phone service companies trick you. We had an annual contract which expired. Once it expired we continued to pay the same rate for the exact same services for many years (until we decided to upgrade to a plan with data) by not signing a new contract - we automatically got switched to a month-to-month plan. The reason why ... the cell phone company could not change our plan or rate because it was regulated. Instead of falling for the "get a free phone" gimmick which would have forced us to sign new contracts we would just buy a new phone when needed and move the SIM card. Rather than fight with getting rate increases approved through the regulation process the cell phone companies rely on tricking you into voluntarily agreeing to a rate increase. But that doesn't mean there isn't any regulation.

[TexasProgresive]

6. The regulation of cell phones does not mandate service. n/t

[karynnj]

8. "to allow for innovation" was bogus too

While AT&T was a regulated monopoly, it had the luxury of funding Bell Labs which in the early 1970s employed about 17,000 people. The Labs was a source of REAL innovation - including cell phones, the transistor, solar panels etc. After divestiture, competition was mostly on creating new pricing plans and marketing - not really innovation.

[TexasProgresive]

10. There was a problem with Bell not allowing any equipment other then

theirs being attached directly to a phone line- modems, answering machines and fax machines among others. And while Bell Labs did all that innovative work it was a slow slog getting it into telecommunications gear.

[karynnj]

12. So, do you think that there was a rash of real innovation

in telecommunications since divestiture?

I think you are speaking of the Carterfone decision, which was LONG before divesiture - 1968. http://en.wikipedia.org/wiki/Carterfone

[TexasProgresive]

14. It was a combination of things that made change happen

The IRS amortization schedule for telcom equipment was something like 30 years. So the telcoms were loath to upgrade. When I first started at GTESW we had cordboards for the operators and electromechanical switching for Direct Dial LD. Local switching was done by Stroger step by step electromechanical switches. Bays of this stuff was still being added in central offices in the early 80s. Digital switching finally began to enter into telecommunications with the #1EAX, #1ESS, Stomberg-Carlson DCO, Northern Telcom DMS 100, TOPS, TSPS.

As far as the Carterfone decision in 1968 telcoms were still forcing modem users to use acoustical couplers. I don't know when they allowed any equipment to be electrically connected to their network- they owned it all from the phone, the drop, the cable and the Central Office.

The Carterfone is a device invented by Thomas Carter. It manually connects a two-way mobile radio system to the public switched telephone network (PSTN), making it a direct predecessor to today's autopatch.

The device was acoustically, but not electrically, connected to the public switched telephone network.

Note the word acoustically.


Acoustic coupler in use

Personally I am not in favor of the break up of the Bell System but I do believe it needed a serious upgrade.

[karynnj]

15. AT&T did a huge amount of work on the electronic switching machines

- in fact, when I interviewed in NJ in 1972, the other choice would have been Naperville, where they hired a large number of people to work on a new version. Could it be that AT&T upgraded their network faster than GTE?

In addition, AT&T made money based on an FCC rate of return - that would actually reward them for higher costs.

[WinkyDink]

2. That break-up was a disaster.

[JustAnotherGen]

3. Google: Divestiture 1984

And I fear this for another reason . . . people forget (conveniently) the Tech/telecom burst of 2001. The banking Fiasco of 08 completely overshadows it. However, I worked for the Glotanic/Global Double Crossing/Global Crossing at the time. I'm actually one of the key whistle blowers.

If this merger is allowed - we are going to do it again. The money is irresistable. I remember those days of being 25 and flying on a private company jet to Bermuda.

Here's how it will go:

1. AT & T gobbles up the other guy.
2. Sprint lodges (already has) a missile.
2.a. Doesn't matter - deal goes through
3. Fed enters a new era of Divestiture
4. 2K to 3K 'Competitive Wireless Carriers' (instead of CLECS) pop up.
5. They start swapping 'networks'. Looks like big money. People invest. But no money exchanged.
6. People lose. Employees (top three layers of the organization) walk away with huge payouts.
7. New bubble bursts. Global Double Crossing, MCI, Telstar, Convergence, Norvergence, Trucom, Level 3, etc. etc.
They'll have different names, but the 'little pups' of yesteryear? We are now all in our late 30s'/early 40's and we now how to set up Carrier Contracts and make it look good to Wall Street.

On that note - as long as the little guy goes unscathed and people don't lose their jobs - let the games begin. I'd like to see a lot of folks on Wall Street seriously crying because those 'techno geeks' got another one over on them. ;-)

[karynnj]

7. The AT&T of the early 1980s was a fantastic corpoation that did right by their employees, their

customers and the world. One of AT&T's early Presidents was the person behind AT&T becoming a regulated monopoly. Thomas Vail understood the dangers of a company becoming a monopoly, but he also saw the technology of that time suggested that one company could best spread telephone coverage through the entire country - even to areas where it was not economic to provide it. I admit to not being impartial on this. I was hired in 1972 by AT&T Bell Labs, which was an incredibly wonderful place to work. I retired from the Labs in 1998, when a package too good to refuse was offered and I stayed home with my three daughters, the oldest of whom was 13.

In return for being allowed to provide phone service to nearly the entire country, AT&T agreed to regulation, where their rate of return would be set by the regulators, they had to connect any independent teleco to their long distance network and they had to be the provider of last resort. (ie if you wanted phone service from somewhere far outside a city in Alaska, you could get it. A big deal before the era of cell phones.

Common Dreams, in their ideologically driven piece of nonsense, argues that they caused harm. Yet the truth is that the one component of the CPI that increased nearly every year was telecommunications. AT&T funded a large research wing that not only regularly developed better and cheaper ways to send calls across the company, it did a huge amount of basic research - producing a huge number of major inventions. BTL (Bell Telephone Labs or more commonly Bell Labs) was one major reason why the US was always by far the country that won the most patents.

Even then numbers do not tell the entire story - these were some of the patents that most changed the world. One was the invention of the transistor, necessary to the miniaturization of electronic devices. This breakthrough helped AT&T improve switching machines, but they allowed the world open use of that patten. I watched one commerce committee hearings several years ago on technology. Senator Inoye became my favorite Senator for at least a day or two because he spoke of how shortsided it was to breakup the Bell System, ultimately killing Bell Labs. (Parts still exist, but there is nothing like there was in the 1970s.)

As to being an excellent company to work for - I knew this before I was hired at Bell Labs. The reaction of relatives was that a job with "Ma Bell" was for life - and it was a good job. Now, what of the "poor" competitors? Maybe you should look into them - they were created by speculation on the stock market and initially what they "sold" were phone calls that in fact were completed over the AT&T network at close to cost - a cost AT&T itself could not meet as their rates were REGULATED to be based on distance - not cost. (therefore a cost from a small town in upstate NY to Wisconsin would be charged the same amount as a NYC to Chicago call if they were in the same mileage band even though the later was MUCH cheaper to provide. It was ideology and the speculators being tight with legislators that led to the country's policy being that AT&T needed to be broken up.

The AT&T of today is not the Ma Bell before the 1980s, not even the remnant of AT&T after the breakup. It is really the regional company that was led by Southwestern Bell - the Texas part of the Bell System.

[REP]

9. HQ in TX, but covered MO, KS, AR and OK as well

I had to know the tariffs for the MOKA region (varied from state to state) and I still have some interesting documents on denying service/charging deposits based on things like occupation or means of income (hair sylists and TANF recipients equalled high risk to Bell).

[karynnj]

13. Correct

They were the worst of the RBOCs that we dealt with.

[rucky]

11. First the NKOTBSB and now AT&T-Mobile

this is getting ridiculous. I need another Millerbud.