Path: utzoo!telecom-request Date: Sun, 9 Jun 91 02:34 PDT From: John Higdon Newsgroups: comp.dcom.telecom Subject: Re: Hollings and Pac*Bell Reply-To: John Higdon Message-ID: Organization: Green Hills and Cows Sender: Telecom@eecs.nwu.edu 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 443, Message 1 of 5 Lines: 106 Charlie Mingo writes: [The usual uninformed, simplistic response citing the short term effects of monopolistic behavior.] Since my points, which I thought to be more than clear, were not understood by all, I will support them one by one. > Although I take no position on the > Hollings bill itself, it sounds perverse to me to attack a company for > offering quality service at a low price. Regardless of how it manages to do that? If it does so by taking from regulated ratepayers and then undercutting legitimate competition through its control of the network AND subsidization from capital derived from other captive customers, you do not feel that worthy of attack? Especially when those regulated ratepayers are taking it in the shorts with rate hikes and rapidly deteriorating service. Too bad those "inefficient" competitors do not have a nice regulated ratebase cash cow that they can squeeze more capital from when desired. > "Predatory pricing," for example, is defined as selling > a product *below the cost of production* for the purpose of eventually > monopolizing a market. Mr. Higdon provides no evidence... Sorry. Here is the evidence. For $4.50, Pac*Bell provides The Message Center. Nothing else is necessary. CF/No Answer, CF/Busy, and standard CF are included for voicemail purposes. Last time I checked, the going rate for the forwarding services alone exceeded $4.50. Either Pac*Bell is overcharging its forwarding customers, or it is giving away the store to its VM customers. Which is it? > This is a natural advantage which large, established > companies have over smaller ones; pricing one's goods to reflect one's > lower cost structure is neither anticompetative nor "unfair." It is also an advantage enjoyed by companies that control the MEANS of service delivery, have sources of income that are decreed in statute (FCC and PUC R&R), and have colusion with other entities. And I disagree: this is BOTH anticompetitive AND unfair. > Mr. Higdon also writes that "[w]hen the field has been thinned out > sufficiently, then the price can be whatever [Pac*Bell] wants." It > should be clear that Pac*Bell cannot raise the price of voicemail in > the future above what independent providers currently charge, without > allowing the competition to reestablish itself. I do not understand this at all. Why not? What magic force will prevent Pac*Bell from marching right up to the PUC to claim that it must charge more for the service? It will not be hard to make a convincing case, since it probably should have been charging more all along. Only at this point it can have ALL the business. > Likewise, his argument that Pac*Bell should be prevented from > offering voicemail, because it alone is in a technical position to > provide special services (such as "stutter" dialtone and free call > forwarding), is similarly flawed. Consumers would not be better off by > making these desirable features unavailable merely to protect > inefficient competition. (Of course, if it is possible to extend these > feature to competitors' services, Pac*Bell should be required to.) > The key concept here should be service to consumers, and not > "fairness" to competitors. In your imaginary, fairytale world, maybe. I am sorry to be so harsh, but you are obviously light years away from the day to day grunge of this business. Other VM companies can, indeed, offer any techincal service Pac*Bell provides IF they are willing to, themselves, buy the means from (guess who) Pac*Bell. This is the multi-layered whammy. Pac*Bell offers stutter dial tone. That is easy; the system lives in the CO anyhow. Mr. Service Bureau can do it by paying Pac*Bell for a dedicated data circuit to each and every switch that Mr. B wishes to serve. So now Pac*Bell has a bigger piece of Mr. B's income, it enriches itself, keeps Mr. B's prices higher, etc., etc. For Pac*Bell, it is a win/win/win situation. Pac*Bell only provides things like stutter dial tone activation when it deems such a feature useful for its own marketing purposes. VM bureaus have been requesting it for years. Now it is available because Pac*Bell, itself, wants it. But Pac*Bell gets it free (or rather buried under unauditable paperwork), while it SELLS it to others. Another example: From Pac*Bell payphones a call to any Bay Area Cellular One (owned by McCaw and PacTel) number cost twenty cents, untimed regardless of distance from the phone to where the number is based. Calls to GTE Mobilnet numbers from those same payphones go full toll. Why? The cellular companies buy a connection package to link to the landline carrier (Pac*Bell). The "no toll" payphone package costs MUCH more than the standard one. But since there is common ownership between the cellular company and the landline carrier, it makes no difference what the higher charge is; it all circulates in the same pocket anyhow. But cross subsidy is not permitted, you say. Maybe not, but until someone produces a full, verified audit of Pacific Telesis and its subsidiaries then I am going to assume that which appears to be self-evident. If you want to fall for the Pac*Bell line of "we can do it better and we can do it cheaper", then go for it. But please do not expect all of us to bury our heads in the sand with you. John Higdon | P. O. Box 7648 | +1 408 723 1395 john@zygot.ati.com | San Jose, CA 95150 | M o o !