Path: utzoo!utgpu!news-server.csri.toronto.edu!mailrus!accuvax.nwu.edu!nucsrl!telecom-request From: Steve Elias Newsgroups: comp.dcom.telecom Subject: A Sprint Employee Comments About ATT and Divestiture Message-ID: <12474@accuvax.nwu.edu> Date: 21 Sep 90 12:12:59 GMT Sender: news@accuvax.nwu.edu Reply-To: eli@pws.bull.com Organization: TELECOM Digest Lines: 92 Approved: Telecom@eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu X-Telecom-Digest: Volume 10, Issue 670, Message 1 of 9 Patrick -- here are some edited email messages from my Sprint friend. I've cleaned up the grammar and stuff (I guess Telemail has a fairly hokey editor.) Comments from a person who works for Sprint. He is writing his own opinions, not the official company line: ---------- About 800 from intrastate, there is nothing illegal about it from an OCC standpoint. I don't know what the deal is about ATT having a different 800 # for intrastate but I think it goes back to the days of band 5 wats type stuff. I will check this. Again, the ATT guy was right [I was wrong -- eli]; It's not that ATT is giving switching stuff away, it's giving away PBX and telephone equipment and services. I will get back into this when I get a chance to give a more in-depth reply. One other thing: ATT was extremely inefficient prior to divestiture, going from 400k employees to 240k wasn't because they needed the money, it was to cut out fat. Also, when you are digital, you need less manpower to maintain. ---------- Subj: Re: Divestiture -- Keep on Truckin The guy has a few points, he's not quite right on all of them. But he did point out a few flaws in your [Eli's] argument. I can't go into them all right now but I will mention a few things. 1) Most important: ATT can combine long distance and equipment. NOBODY ELSE CAN to that extent because nobody else owned a company like Western Electric. For large customers looking for all in one vendors (ie: tariff 12) this is where it makes a huge difference and where the free "pops" in the equipment arena hurts (this is illegal by the way, but is under the table). The thing that stops MCI and Sprint is that it's impossible for us to do that unless say, we get Northern Telecom to throw in some free stuff to subsidize our contracts -- not likely. You get the idea, one side of the company subsidizes the other (in the ATT world which is a luxury OCCs don't have.) 2) The residential market is NOT relatively unprofitable; it's extremely profitable because overhead is much less than in say, the WATS area of the business. Also, the big argument about price ceilings and floors in the FCC had to do with ATT lowering rates for tariff 12 type large customers to lock them in and subsidizing this by raising residential rates. To some extent this is exactly what has been done. 3) Don't let anyone kid you, ATT was at one time the largest company in the world. Even today, in an unregulated environment, they could blow anybody away. It isn't in their best interest to do that now because, then, they would be right back where they started and the feds would crank down harder. The idea is, to gain as much market as possible but make sure a few of the OCCs get some crumbs to keep the 'competitive market' alive. ---------- Subject: Monopolies (was: Re: Divestiture -- Keep on Truckin) ATT is probably about 10-15 times our size; closer to 10 I think. Also, you forgot to mention 800. ATT has major control over that market: about 90%. There are also only a limited # of exchanges available to OCCs. Also, there isn't yet portability of 800 numbers so pretty much when you have a good number or want a specific number, it depends who has the exchange. Again, ATT has 90%. ---------- The deal of the consent decree (the deal of the century) ended up with ATT taking the most profitable parts of Ma Bell (Long Lines and equipment) and dropping the least profitable (RBOCs). The original goal of Justice in the whole antitrust suit was to separate Western Electric from ATT. This fight goes back to Eisenhower (I think) in 1954. Read _The Deal of the Century_ by Stephen Cole. [all previous text written by the US Sprint person, edited by Steve Elias.] Peace. eli [Moderator's Note: Thanks for sending this along, but I again ask why it is your friend at Sprint feels it is necessary to remain anonymous. No one else does that here, and we have had many far more controversial messages than your friend has sent along. PAT]