Ma Bell Regroups

A blog is supposed to have fresh new content posted regularly. I am remiss in keeping my blog active. Visitors, parents, holidays, and other projects are my excuse, but it only takes a few minutes to put something up there. There are plenty of great topics that I missed as a result, but SBC’s assumption of the AT&T name is just too much to pass on.

Free markets have a funny way of reaching equilibrium when people and governments try to manipulate them for their own benefit. Sorry to disappoint those in the blue states, but SBC’s acquisition of AT&T and Verizon’s acquisition of MCI prove that things that don’t make sense have a way of working out. I learned this fact very early in my career from a sage Department Head (Clark Ryan) in AT&T Bell Labs. As a logical thinking Electrical Engineer, I never thought that the structure of the divesture of AT&T in 1984 made sense, but logic had nothing to do with it. The design of the breakup was orchestrated by bureaucrats, lawyers, and accountants, not engineers for the most part.

Think back to the early 80’s when AT&T’s long distance and equipment businesses were the cash cows for the company. Business and long distance services were providing most of the revenue and profit for the company. Western Electric, which was to become AT&T Network Systems, dominated the market for almost every major category of equipment. Through these two divisions, AT&T could continue its dominance on the U.S. telecommunications market…or so they thought.

Shedding the labor and capital intensive local telephone business seemed like pure genius at the time. Most wire centers needed expensive upgrades to digital switches and an upgrade to the outside plant. Billions of dollars needed to be invested in this part of the business which would affect earnings for decades. If AT&T could divest them of this burden, then they were free to invest in computers, ala NCR, and international expansion. Their lack of success in computing is well chronicled. Their international expansion in equipment fared much better, but selling services proved much harder.

The divestiture was approved by Judge Green and the Regional Bell Operating Companies (RBOC) was created. AT&T was left standing with its business and long distance services, equipment arm, and world renowned Bell Laboratories. Up and coming executives like Joe Nacchio, Carly Fiorina, and Rich McGinn were the futures of the company…or so it seemed at the time. The wheeler-dealers in the company at the time continued to make bad business and investment decisions. The equipment and computer arms of the company were cut off into NCR, Lucent Technologies, and Avaya. Later Lucent spun off the semiconductor division into Agere Systems. Carly and Joe headed to greener pastures and Rich took over the helm at Lucent Technologies. All three underperformed at leading their companies while making exorbitant salaries.

What was left at AT&T was a failing long distance business and lack-luster performing business services. Their brief foray into wireless and residential broadband services ended by selling the divisions off to Cingular and Comcast, respectively. AT&T did not have much of a future for itself except an excellent brand and a host of top tier business customers. In contrast, the RBOC have worked for years to break down the artificial barriers imposed by divestiture. The Telecommunications Act of 1986 allowed them into long distance as long as they could prove that there was competition in markets where they wanted to offer long distance services.

The writing was more than on the wall. Customers wanted a full service provider. SBC and Verizon wanted to fill that missing link in their service offering which is why SBC decided that it made sense to purchase AT&T and Verizon sought MCI. These moves put back together the network that divestiture broke up. Business and residential subscribers could now purchase services from a single provider no matter where they were located. Billing and maintenance are greatly simplified for the consumer. Of course, there were the usual regulatory and consumer complaints but these two acquisitions made perfect sense to give customers the products and services they desire.

As consumers, we have competition and lower prices due to economies of scale. AT&T and Verizon can now offer subscribers the services they want without artificial barriers. They can offer most of these services globally to their customers. A new class of “megacarriers” is beginning to emerge from the ashes of divestiture. Look for these companies to make more acquisitions of video companies. Finally the shackles of divestiture are disappearing and the consumer will benefit from it.

Tag: AT&T, SBC

Is It Time To Switch VoIP Carriers?

In an earlier blog article I stated that I am a dedicated Vonage customer.  I have used them as my sole wired voice provider for three years now, but I am concerned that their corporate objectives are diverging from mine as a consumer.  As I stated in a previous article, they are working on an aggressive expansion campaign and coming in line with the FCC mandate for E-911 capability.  They are laudable goals to legitimize Vonage as a reliable carrier who is for sale.  My needs are different from Vonage’s vision.

I had hoped during this year that Vonage customers would have seen many new services like those that their competitors are offering.  Wired’s recent pronouncement that BroadVoice was the #1 VoIP service prompted me to check them out.  After reviewing their feature line up and included calling countries, I promptly signed up.  A week later my Sipura 2100 ATA arrived via FedEx.  I quickly set it up and two minutes later I had dial-tone.  No special configuring was required on my cable modem, router, ATA, or PC.  Just plug it in and it works!  This is how VoIP should be.

I could easily place calls on my analog phone and voice quality was good.  My MOS comparisons against Vonage gave BroadVoice a slight edge by more than 0.2 points.  The web portal allowed me to easily configure selective ringing, do not disturb, and anonymous call rejection.  All features Vonage does not offer.  I could even provision the second line of my ATA for another VoIP provider like Free World Dialup (FWD).  After further digging I found out that BroadVoice supports VoIP peering with FWD, so I can call FWD users directly from my phone with a special dialing code and they can call me.  At this point it was clear to me that it was time to put in my local number portability request.

I filled out the form and faxed it to BroadVoice.  Their LNP group promptly e-mailed me back confirming submission to Vonage.  Committed; now the little problems begin.  While on a business call, I lost one direction of my conversation.  I called back and it happened again.  Later that day, the whole call was dropped.  I called customer service (611) and they moved me to a new server.  I only experience the problem once since then.  It happened because I changed the proxy server on the ATA and not on the application server side.  Occasionally the calls are choppy or have too much echo.  This problem is not due to bandwidth issues on my cable modem side.  There must be bottlenecks somewhere else in the network.  

Four weeks after submitting my LNP request, my primary home number is still with Vonage.  At least the call quality has improved.  Not all of the BroadVoice features are better than Vonage.  Vonage sends a WAV file with each voice mail message.   BroadVoice only sends an announcement that there is a voice mail, but it contains all of the CID information.  Vonage’s Click-2-Call feature works great with Outlook and Firefox.  BroadVoice has yet to offer a similar capability.  They have their Call Manager that can pull numbers from an Outlook contact list.  It only works with Internet Explorer and I cannot get it to work on my desktop computer.  BroadVoice Customer Service cannot figure out the problem.  Besides I use Firefox.  I don’t want to use IE just to use their Call Manager.  BroadSoft offers direct integration with Outlook.  Hopefully BroadVoice will offer it to their customers soon.

My main concern is that my LNP request has not been fulfilled.  Four weeks have passed since I submitted the request.  Wireless carriers are required to fill a LNP request within 72 hours.  Why not wireline carriers?  The FCC is so concerned with E-911 why not with LNP for VoIP?  Again we are witness to inconsistent and outdated regulation of this industry.

I have been a loyal and dedicated Vonage customer, but loyalty only goes so far.  As a consumer, BroadVoice provides me the calling features and flexibility that Vonage cannot touch.  They will probably continue because they use BroadSoft’s products.  My main concern is reliability and call quality.  They too will improve with time.  I subscribed to Vonage at about the same point in their development and lived through it.  The marketplace for voice services is becoming competitive again.  Let’s hope that we can keep broadband access open and competitive.

Tags: Vonage, BroadVoice, VoIP

Winter Reaches the Colorado Foothills

Winter has reached our corner of the Earth. I took this picture while driving down the road during our first snow. Not much accumulated though.

Please stay tuned for my next blog article on the regrouping of AT&T.

Vonage in Exploratoratory Talks with Sprint-Nextel and T-Mobile USA

Two weeks ago the Wall Street Journal announced that Vonage is holding exploratory talks with Sprint-Nextel, T-Mobile and “traditional” phone companies. This announcement confirms my article on October 19 that recommended these two companies take a serious look at Vonage. Their moves into IMS demonstrate that they are working hard to build a case to provide all business voice services. The purchase of Vonage would be a strategic asset that would instantly give them not only a network but credibility as they roll out a converged service. The WSJ rumors that selling Vonage would yield $2 billion for its owners.

Tags: Vonage, VoIP, Sprint

They Get It

Another story last week that caught my eye was the announcement by CBS and NBC that they will offer some of their programming on-demand through Comcast and DirecTV. For a small fee consumers can watch their favorite program from these networks when they want. Premium cable channels like HBO and Starz have been providing some of their programming on-demand to subscribers for almost a year. ABC offers their hit shows for $1.99 per viewing on iPods through Apple’s iTunes. The networks and cable companies get it. Instead of restricting content ownership, the networks are offering their customers the opportunity to view their programming when they want to view it and on devices they want to view them. They are not threatening customers and disabling their computing devices with malware like the recording industry. They are providing them what they want and making more money doing it. The recording industry wants to control the entire music industry. Recording industry executives should take cue from their television counterparts and embrace this new medium for content and distribution; not fight it.

Tag: on-demand, TV, cable