Path: utzoo!utgpu!news-server.csri.toronto.edu!bonnie.concordia.ca!uunet!samsung!usc!zaphod.mps.ohio-state.edu!casbah.acns.nwu.edu!accuvax.nwu.edu!nucsrl!telecom-request
From: johnl@iecc.cambridge.ma.us (John R. Levine)
Newsgroups: comp.dcom.telecom
Subject: Re: Multi-Location WATS Discount
Message-ID: <16225@accuvax.nwu.edu>
Date: 20 Jan 91 02:07:20 GMT
Sender: news@accuvax.nwu.edu
Organization: I.E.C.C.
Lines: 39
Approved: Telecom@eecs.nwu.edu
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 11, Issue 52, Message 3 of 7


In article <16195@accuvax.nwu.edu> TELECOM Moderator writes:

>[Moderator's Note: Mr. Van Buskirk, I was wondering what advantage
>there is to AT&T to work through aggregators in this way?

According to an article in {Data Communications} (not a bad magazine,
available free to qualified readers) the AT&T aggregator business
exists because of tariff peculiarities.  AT&T can't cut their prices
other than via Tariff 12, a cumbersome scheme that they use to make
special deals with very large customers.  There are few enough Tariff
12 customers that they were listed in a table in the article, and are
all Fortune 100 companies.  Other than that, all you get is list price
volume discounts.

The aggregator business allows AT&T to compete with other LD carriers
for smallish but still price-sensitive accounts, since the price
charged through the aggregator reflects the total volume of calls the
aggregator sells.  The scheme they use is actually one that was
intended for companies that have many locations and want each location
to be billed for its own calls.  The aggregators resell this service,
so the effect is that each of the aggregator's customers get a bill
straight from AT&T, but at a lower price than they'd pay if they went
direct.  I forget how the aggregator makes money, either it's a fee
they charge their customers, or AT&T rebates part of the ultimate
customers' bills.

AT&T is apparently finding all of this a headache, both because it's
hard to administer (aggregator customers come and go much faster than
the companies for whom the deal was intended open and close offices,)
there are credit problems (whom do they go after if the customer
doesn't pay) and there is of course complaining from the competitors
that AT&T is undercutting their published prices.  They are extremely
reluctant to sign up any new aggregators at this point.


Regards,

John Levine, johnl@iecc.cambridge.ma.us, {spdcc|ima|world}!iecc!johnl