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From: macy@fmsystm.uucp (Macy Hallock)
Newsgroups: comp.dcom.telecom
Subject: Re: More COCOTery
Message-ID: <13130@accuvax.nwu.edu>
Date: 7 Oct 90 14:06:00 GMT
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Organization: F M Systems, Inc.  Medina, Ohio USA  +1 216 723-3000
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X-Telecom-Digest: Volume 10, Issue 719, Message 6 of 8


John Higdon (Telecom Critic At Large) and others said:

>> Okay, I'm finally gonna ask.  Who, out of all the comp.dcom.telecom
>> and TELECOM Digest readers, is a COCOT owner?

>I will be very surprised to find one single COCOT owner on this forum.

Well, I came close....

As most of the Digest readers know, I owned (until this week) an
interconnect company in Medina, Ohio.  Medina is 30 miles outside of
Cleveland in GTE-land.

Three years ago my brother and I got fed up with GTE's attitude about
pay phones ... my father and other brother own a property managment
business and had gone through a lot of grief with GTE over pay phones
and suggested that we could do a better job.

This gave us almost twenty decent locations in Medina to get started
in the COCOT business.  COCOT's seemed a natural extension of the
phone biz for us, so off I went to NATA to look for hardware ... and I
found a lot of junk, but a couple of decent phones were actually made.

I ordered two types for evaluation, and in they came along with
software to permit remote administration.  I was now out $3000, 'cuz
these guys only deal COD CASH!

I played around with the stuff for a few days and installed one in
front of our building on a standard business line (GTE did not yet
have their COCOT tarriff in place, they had been dragging their feet
with the PUCO for two years...)  I also started looking at how to deal
with credit card and collect calls.

That's where I got a reality check ... AOS's were the problem.  Credit
cards validation was a problem.  A small time COCOT operator had to
either deal with high priced and somewhat slimey AOS services or not
at all.  AT&T did not want to talk to me, much less provide any
assistance.  Sprint and MCI did not have their operator services up to
speed at that time.

As long as I did local and sent-paid coin calls, COCOT's were OK...but
not practical in today's communications environment.  GTE would not
give me equal access to their services, either.

I went back to selling key systems ... and told my father and brother
how to file formal PUC complaints against GTE over pay phone problems.

(Coming soon ... my attempt to enter the long distance resale business
 ... another reality check for a small businessman..)

Other comments:

The communication business is now very different than five years ago.
There are only three successful niches left in private CPE telecom:

     - The very small one or two man key system business.
       Low margins and very personal service.

     - The large, customer oriented regional company.
       Succeeds in quality service, brand name products
       and a wide range of services.  Very marketing oriented.

     - The large national company.  Usually direct sales by
       the manufacturer.  Looking for large, national accounts.
       Sells with a "safe to deal with" mentality.

This tracks with John Higdon's comments about COCOT companies.

Note that there is no niche left for the small to medium size telecom
specialist.  There is now no growth path for the small shop, except to
sell out.

(BTW - I sold out my PBX business to a larger office automation
company, owned by a friend in Cleveland, and now work for him.  F M
Systems in Medina continues to do alarm work and a few small key
systems, just to aggravate GTE... under the auspices of my brother.  I
help him out on computer issues and spend most of my time in Cleveland
on PBX's and phone engineering now.  My wife hasn't seen me in a
week ...) 


Macy M. Hallock, Jr.     macy@NCoast.ORG      uunet!aablue!fmsystm!macy