Return-Path: Received: by massis.lcs.mit.edu (8.7.4/NSCS-1.0S) id IAA04955; Tue, 14 Jan 1997 08:50:05 -0500 (EST) Date: Tue, 14 Jan 1997 08:50:05 -0500 (EST) From: ptownson@massis.lcs.mit.edu (TELECOM Digest Editor) Message-Id: <199701141350.IAA04955@massis.lcs.mit.edu> To: ptownson@massis.lcs.mit.edu Subject: TELECOM Digest V17 #11 TELECOM Digest Tue, 14 Jan 97 08:50:00 EST Volume 17 : Issue 11 Inside This Issue: Editor: Patrick A. Townson Re: MCI Bait-And-Switch Beware (John Higdon) Re: MCI Bait-And-Switch Beware (Marty Tennant) Re: MCI Bait-And-Switch Beware (John R. Levine) Re: MCI Bait-And-Switch Beware (Torsten Lif) Re: MCI Bait-And-Switch Beware (Brand Hilton) Re: This Date in Telecom History - Divestiture (Nils Andersson) Re: This Date in Telecom History - Divestiture (Stewart Fist) Re: This Day in Telecom History - the Telegraph (John R. Levine) Re: This Day in Telecom History - the Telegraph (Nils Andersson) TELECOM Digest is an electronic journal devoted mostly but not exclusively to telecommunications topics. It is circulated anywhere there is email, in addition to various telecom forums on a variety of public service systems and networks including Compuserve and America On Line. It is also gatewayed to Usenet where it appears as the moderated newsgroup 'comp.dcom.telecom'. Subscriptions are available to qualified organizations and individual readers. Write and tell us how you qualify: * ptownson@massis.lcs.mit.edu * The Digest is edited, published and compilation-copyrighted by Patrick Townson of Skokie, Illinois USA. You can reach us by postal mail, fax or phone at: Post Office Box 4621 Skokie, IL USA 60076 Phone: 847-329-0571 Fax: 847-329-0572 ** Article submission address: ptownson@massis.lcs.mit.edu Our archives are located at mirror.lcs.mit.edu. The URL is: http://mirror.lcs.mit.edu/telecom-archives They can also be accessed using anonymous ftp: ftp mirror.lcs.mit.edu/telecom-archives/archives A third method is the Telecom Email Information Service: Send a note to tel-archives@mirror.lcs.mit.edu to receive a help file for using this method or write me and ask for a copy of the help file for the Telecom Archives. ************************************************************************* * TELECOM Digest is partially funded by a grant from the * * International Telecommunication Union (ITU) in Geneva, Switzerland * * under the aegis of its Telecom Information Exchange Services (TIES) * * project. Views expressed herein should not be construed as represent-* * ing views of the ITU. * ************************************************************************* Finally, the Digest is funded by gifts from generous readers such as yourself who provide funding in amounts deemed appropriate. Your help is important and appreciated. A suggested donation of twenty dollars per year per reader is considered appropriate. See our address above. All opinions expressed herein are deemed to be those of the author. Any organizations listed are for identification purposes only and messages should not be considered any official expression by the organization. ---------------------------------------------------------------------- Organization: Green Hills and Cows Date: Mon, 13 Jan 1997 23:48:49 -0800 From: John Higdon Subject: Re: MCI Bait-And-Switch Beware Dave Keeny wrote: > Federal law allows telephone conversations to be taped as long as at > least one of the participants agrees to it -- this allows you to record > your own conversations; however, state laws may differ and the legality > is not always clearcut ... >> From http://www.cpsr.org/dox/factshts/wiretapping.html : >> California law does not allow tape recording of telephone calls >> unless all parties to the conversation consent... Yet another case of California's parochial myopia. What on earth would stop someone in CA from calling anyone (including someone in the state), then three-waying someone else into the conversation who happened to be located in a state that allows recording without both parties' consent? The person making the recording is indeed one of the parties to the conversation, so he is satisfying the Federal and his state's law. California law would not apply to someone living in another jurisdiction. And being in compliance with Federal law, California could expect no cooperation from any other agency in dealing with this recordist. Furthermore, it would be very difficult to prove that such a recording was NOT made in the above-described manner. In other words, I could call a downtown business, record the conversation clandestinely, and then later produce the recording as evidence claiming that it was made by someone in, say Arizona, who happened to be on the line. Who could prove otherwise? John Higdon | P.O. Box 7648 | +1 408 264 4115 | FAX: john@ati.com | San Jose, CA 95150 | +1 500 FOR-A-MOO | +1 408 264 4407 | http://www.ati.com/ati/ | ------------------------------ Date: Mon, 13 Jan 1997 21:27:14 -0800 From: Marty Tennant Reply-To: marty@sccoast.net Organization: low tech designs, inc. Subject: Re: MCI Bait-And-Switch Beware > But one other area where the telco's have us beat is with regards to > tariffs. If a telco rep promises you a great rate that happens to > exceed legal tariffs, the telco MUST ignore the rep's "mistake" and > charge the legal (tariffed) rates. There would be nohting you could > do, unless you could prove it to be intentional (fraud). > [TELECOM Digest Editor's Note: This is quite true. The tariff always > prevails. Regardless of what anyone says at telco which happens to be > in error, the rules to follow are the ones written into the tariff. Tariffs, as we know them, are going away, at least for interstate long distance. Exercising "regulatory forebearance" given them by the 1996 Act, the FCC has ordered long distance companies to STOP filing tariffs with them. Image the welcome drop in paper going to DC. Companies will only have to keep one copy of their rates in one location of their choosing. Some carriers are actually opposed to this, as it puts them in a situation that might require individual contracts with their customers. This might stop the lying sales reps that don't care if they tell the truth over the phone. marty tennant low tech designs, inc. ------------------------------ Date: Mon, 13 Jan 97 09:20 EST From: johnl@iecc.com (John R Levine) Subject: Re: MCI Bait-And-Switch Beware Organization: I.E.C.C., Trumansburg, N.Y. > But one other are where the telco's have us beat is with regards to > tariffs. Hey, I thought that long distance companies don't file tariffs any more, since AT&T became "non-dominant" and the new communications act kicked in. John R. Levine, IECC, POB 640 Trumansburg NY 14886 +1 607 387 6869 johnl@iecc.com, http://iecc.com/johnl, "New witty saying coming soon." ------------------------------ From: Torsten Lif Subject: Re: MCI Bait-And-Switch Beware Date: Mon, 13 Jan 1997 13:31:46 -0500 Organization: Ericsson Messaging Systems, Woodbury, New York, USA I wrote: > Another angle: Verbal contracts are legally as binding as writing, if > you can prove what was said. Do the third-party "witnesses" that are > called in record the conversations in some "safe" manner? Could I > insist on having the salescritter repeat the offer for the recording > and then really hold the company to it? To which Pat added: > [TELECOM Digest Editor's Note: They get real indignant when you tell > them you are going to record the conversation. You must by law inform > the other party that you are going to record it. They really do not > like it however. Be sure to include the question, "Are you personally > authorized to make promises and commitments on behalf of ? I don't know how well a tape from my answering machine would stand up in court, considering the near-state-of-the-art audio editing equipment in any PC these days. But the Telco has to call in a witness to have verification that I actually agreed to this. Do these witnesses keep recordings or do they make written notes? Are they impartial enough that I could call upon them to testify against the Telco if I feel the promises haven't been met, or would they be reluctant to bite the hand that feeds them? Torsten ------------------------------ From: Brand Hilton Subject: Re: MCI Bait-And-Switch Beware Date: 13 Jan 1997 18:10:50 GMT Organization: Nortel, Inc. After reading all this about AT&T and MCI, I just wanted to throw in a plug for a company I've recently started using for long distance: VarTech(sp?). Their rate plan is fairly simple. $5.00 a month and 10 cents a minute in the US, INCLUDING IN-STATE, any time, day or night. You don't have to sign up for anything. The first time in a calendar month you use 10811, you get charged the $5.00 monthly fee. So, if you go a month without making any long-distance calls, you're not out any money. 10811 + 1 + Area Code + Number I've been thoroughly satisfied so far. Brand [TELECOM Digest Editor's Note: The main problem with companies which charge a monthly service fee (as per your example of five dollars) is that one needs to make enough calls in a month's time to amortize or 'even out' that initial service charge. If someone made only two or three long distance calls in a month's time (fairly typical for many Americans) and each call was just a few minutes in duration, those calls are going to be quite expensive when you pay ten cents per minute plus five dollars. I do not think most people who use plans of this sort realize that you need an hour or more of long distance calling per month before that five dollar monthly fee has been absorbed into the cost of each call sufficiently that the rates 'per minute' come into a really competitive range with 'more expensive' carriers, and maybe two hours of calling per month before it gets to the point you are at the ten cent per minute rate advertised by the company making the offer. In other words, if someone offered you a plan of fifteen cents per minute flat rate, you would have just as good a deal until you (as a moderatly heavy *residential* user of long distance) got to the point of two or three hours of traffic month. That is why we often say that for all intents and purposes where *residential users* are concerned, all the various companies charge the same amount. None are cheaper; none are more expensive. For resiodential users then, the thing to look for is customer service and quality of connection rather than price. PAT] ------------------------------ From: nilsphone@aol.com (Nils Andersson) Subject: Re: This Date in Telecom History - Divestiture Date: 13 Jan 1997 18:52:41 GMT Organization: AOL http://www.aol.com In article , hancock4@bbs.cpcn.com (Lisa Hancock) writes: > As to long distance competition, AT&T's long distance rates were on a > steady decline for years and were pretty reasonable. I question > whether "competition" really made a difference. I think it was > technology that did it. I do not doubt that it was both. Now I can call anywhere in the US 7/24 at 10cents and most international locations at 25 cents a minute. I do not believe that would have happened without the breakup. The proof is that other countries that had access to the same technology have not have nearly the same price drops yet, although with global deregulation I expect it to happen. > I also think companies like MCI got an unfair start by skimming the > cream -- serving high volume profitable corridors What is wrong with that? > leaving AT&T to serve the low end and provide emergency > capacity for outages. (For years, whenever you had trouble on MCI > their operator would tell you to dial 10288+ to make your call. I > wonder how MCI would have grown if it did not have the backup > capability.) What is the problem? I pay one price (10cents/min) for normal bulk comm, and a higher price, as much as 45c/min for fallback/emergeny/ oddball communications. Seems fair to me. > As to owning your own equipment, everybody knows the old Western > Electric 500 and 2500 sets were sturdy enough to take a direct nuclear > hit. Today's sets, even those made by AT&T are cheap and fragile. > You can't buy the good sets, except through the second hand market. If extreme realiabilty is your formost criterion, then the old AT&T clunkers were of course winners. (And AT&T had a strong incentive to do this, as they would have to go out on a service call if one broke.) There are, however, other valid criteria, such as lightness, built in speed dial, lighted dials, dial-in-handset, etc. A lot of people even care about color and design (I do not, but lots of people do). As I own several sets, the risk that one might fail does not bother me, I will simply replace it when convenient. > Are consumers really better off? I would argue that most customers actually are better off, but of course this does not apply to all. The ending of cross-subsidies where long-distance subsidies went to local and network hookup has by definition forced those whose use was almost exclusively local to now pay their own way. OTOH, expanding technology has brought down costs overall, and I doubt that the total phone bill has truly become significantly higher in real terms (after inflation) for very many people, for the same usage, that is! > [TELECOM Digest Editor's Note: > None of the later entrants on the scene wanted any > competition; they just wanted to rip off what they could from the > network and they convinced the government to help them do it. PAT] Actually, that is not what happened. As in any partially regulated market, the typical plea to the government from any given company was to open up for more competion in the areas to which it did not have good access, but to disallow more competion in the areas where they already did. (The most laughable example was when at roughly the same time, the LD operatore argued FOR opening the local markets - intra-LATA - to competion, but AGAINST opening the long-distance market to local telcos, while the RBOCs took the opposite view, on both items.) This is self-serving and in many cases disingeneous, but also very predictable. Regards, Nils Andersson ------------------------------ Date: Tue, 14 Jan 1997 08:35:46 +1000 From: fist@ozemail.com.au (Stewart Fist) Subject: Re: This Date in Telecom History - Divestiture Lisa Hancock (hancock4@bbs.cpcn.com) writes: > A lot of significant changes in the Bell System happened regardless of > competition. For instance, owning your own sets was a separate decision, > as was long distance competition. I've been collecting estimates from around the world for some time, as to how much telecommunications costs have been dropping over the years. These vary widely, of course, but in general they suggest that the "real costs" of maintaining, improving and introducing telephone networks and the supporting plant and equipment (ignoring management and marketing, etc.) has been dropping since 1983 (the year when digital ICs and optical fibre began to make an impact) by a compound rate of between 5% and 7.5%. Thus if the core networks had remained monopolies and efficient (difficult to do with monopolies, I admit) the prices would now be much much lower than they are under competitive regimes. What non-US economists and politicians are constantly doing with telecommunications, is comparing the government-monopoly-rip-off regimes with lower US long-distance prices and believing that this comes about just from competition. However in most countries governments (like successive Australian governments), take out profits, taxes, and discount/subsidies. The Australian government now gets about $2.5 billion a year [Revenues are $15 b] as direct profits which are virtually hidden taxes. Then, they take out taxes (effectively they tax themselves), and there are huge hidden subsidies and discounts to government enterprises -- both for services and for R&D -- probably amounting to at least another $1 billion. The Defence Department for instance, gets Telstra to build its over-the-horizon radar system, and little outback towns nearby, suddenly acquire 12-fibre optical cable connections, 500 miles from the nearest major residential city. These all artificially inflate the prices charged to the paying customer -- and make monopolies look to be expensive. On top of this, the competitive regimes (such as in Australia now with the private Optus offering long distance) results in duplication, thousands of new marketing staff (16,000 in Telstra from one account), and enormous advertising and promotional budgets. Telephone services have taken over in Australia the role once played by cigarette companies: you can't watch live Aussie TV for two minutes without seeing a Telstra logo. Enormous over-engineering also results from companies preparing for competition -- since this is the way to defend yourself against price cutting wars. With Optus and Telstra, Australia now has 100 fibre pair between Sydney and Melbourne, while only six are ever used. This overengineering is duplicated around the country. Such escallation in costs is especially evident with duopolies in small countries, but it is also true of more open competition in larger markets. Also economists forget that with competitive regimes in telecomm- unications, the competitors must also be collaborators -- they need to interconnect for starters, and they also need to maintain goodwill in various departments (mainly with the dominant carrier) both to share resources and to utilise each other's plant. But governments publically demand "competition"; so the companies often put on a public face of furious fighting. I suspect that both Optus and Telstra probably have subsections of their PR departments specifically charged with publically bad-mouthing each other, for purely political reasons. This "proves" to the politicians and economists that their economic rationalism is successful! The members of a duopoly may not fix prices formally, but they do informally at capacity planning meetings: "We are not planning on increasing the cable capacity to Queensland. Are you planning any discounts which would increase our requirements?" "No, not this year." "Nor are we." And they also each know that their best interests lie in a facade of public pricing discounts (Family and Friends plans, etc.) which have very little effect on revenues, while jointly maintaining prices at a high level. Most dominant carriers have increased revenues after the duopoly was introduced -- not through greater efficiencies (often staff/line ratios have increased due to the new marketing staff) -- but because price caps are raised to allow the new competitor to recover its (duplicated) capital outlay. > I also think companies like MCI got an unfair start by skimming the cream > -- serving high volume profitable corridors leaving AT&T to serve the low > end and provide emergency capacity for outages. Here I disagree. MCI (and Optus) can only skim the cream if there is cream to be skimmed. While I agree with maintaining government-owned dominant carriers (on the core network, anyway) where they still exist, I don't see why anyone should be prohibiting from competing with them in niche markets, if anyone can find a creamy niche. It is the carrier's responsibility not to leave any cream. The problem here is one of tariff rebalancing, so that prices reflect costs. USOs should be openly paid from taxation revenues (or from equal imposition on all carriers) -- not through hidden cross-subsidies and discounts which result in cream and non-cream areas of operations. USOs can be then auctioned to the best/cheapest provider. Without this form of market discipline, the carriers can never be held responsible for bad practices and inefficiencies. > As to owning your own equipment, everybody knows the old Western > Electric 500 and 2500 sets were sturdy enough to take a direct > nuclear hit. Again, I disagree. I think the Carterfone decision of the FCC (levered through by the famous FCC commissioner Nicholas Johnson), is probably the most useful and significant piece of regulation-change in the history of telecommunications. The carrier has no more right to own or control your equipment (other than to insist it meets standards) than the electricity provider has to own your refrigerator. The Carterfone decision set the demarcation point (between them and us) at the home boundary. I would take it back even further. I suggest that, when I rent a local-loop along suburban streets back to the exchange, then I have the right to control what travels across it, and to which service/s (plural with small multiplexers) it connects at the exchange. The exchange building should always be a legislated "peer point" where licensed service providers have access and rack-space, to make their own competitive connections. (It is not in most countries.) Then you have peripheral competition in the provision of services -- which is what everyone wants -- not duplication of national networks. For this to happen, all it requires is for legislation to shift the demarc back to the other end of the local loop. Instead of it being at my end, it is set at their end -- where the cable enters the exchange. Line rental is then paid by me (to the owner - probably a telephone company, but not necessarily) for my use of the local loop twisted-pair -- for whatever reasons I want, with whatever technology (provided, as always, it conforms to standards and doesn't effect other users). The access link needs to be separated and legislatively distinguished from the telephone network. This then brings it into line with everything else I rent. If I rent a car, I can drive it on anyone's roads (not just toll-roads owned by Hertz), and I can carry in it anyone I want. The rental company does not control the contents, or the direction, provided I stay within reasonable standards. So shifting the demarc back to the exchange is just the Carterfone decision taken logically to its limit. It takes the demarc to the point where it separates the "exclusive use" components of the telephone network (CPE and local loop) from the "share use" (core network and swiches). That, then allow competition to work at the periphery. The core can take care of itself. Stewart Fist Technical writer and journalist. Homepage:< http://ourworld.compuserve.com/homepages/stewart_fist > Archives of my columns:< http://www.abc.net.au/http/pipe.htm > Development site: Phone:+612 9416 7458 Fax: +612 9416 4582 ------------------------------ Date: Tue, 14 Jan 97 06:48:00 EST From: johnl@iecc.com (John R Levine) Subject: Re: This Day in Telecom History - the Telegraph Organization: I.E.C.C., Trumansburg, N.Y. > Does the second 'T' in AT&T still have meaning in this age? > [TELECOM Digest Editor's Note: Do either of the letters 'T' in > ITT mean anything these days for the company which bakes bread > among other things? How long has it been since International > Telephone and Telegraph had any involvement with either? PAT] Sure. The second T in AT&T before 1919, when they controlled Western Union, and perhaps later on when they started the TWX business which, after a lot of buying and selling, they still have. Telegraphy is, after all, data rather than voice communications, and AT&T sure does a lot of that. Today's ITT (the company's official name, the letters don't stand for anything any more) is a far cry from the company of Sosthenes Behn and Harold Geneen. Not only do they not make Twinkies any more, they're completely out of the phone business. They own the Sheraton hotel chain, three Caesar's casinos, the Madison Square Garden group in New York, and some other hospitality industry businesses. The only vaguely phone related business they're still in is ITT World Directories which publishes phone books. John R. Levine, IECC, POB 640 Trumansburg NY 14886 +1 607 387 6869 johnl@iecc.com, http://iecc.com/johnl, "New witty saying coming soon." ------------------------------ From: nilsphone@aol.com (Nils Andersson) Subject: Re: This Day in Telecom History - the Telegraph Date: 13 Jan 1997 18:52:32 GMT Organization: AOL http://www.aol.com > [TELECOM Digest Editor's Note: Do either of the letters 'T' in > ITT mean anything these days for the company which bakes bread > among other things? How long has it been since International > Telephone and Telegraph had any involvement with either? PAT] At some point in the early eighties, ITT started an effort to develop digital switches. They hired away a bunch of talent from AT&T at a substantial premium, set up the lab with tight security and developed away. I am not sure how technically successful they were, but the marketing effort that was carried out in parallel flopped, the Norwegian Govt Telco was the only significant customer. One day the access cards would no longer open the doors to the lab; that is how the engineers found out that they had been laid off. As the one sale did not justify finishing the effort, ITT satisfied the customer contract by subbing out the bid and they bought I believe Ericsson switches. Sic transit gloria mundi!!! Regards, Nils Andersson ------------------------------ End of TELECOM Digest V17 #11 *****************************