🚀 go-pugleaf

On Saturday, February 3, 2018 at 5:21:33 PM UTC-5, Dan Espen wrote:
> hancock4 writes:
> 
> > On Saturday, February 3, 2018 at 1:39:07 PM UTC-5, Dan Espen wrote:
> >
> >> > AT&T's management did not destroy Bell Labs.  It was destroyed by the
> >> > lawyers who forced the breakup of AT&T.
> >
> >> Actually, the breakup was proposed by AT&T.
> >> They may or may not have lost the anti-trust suit.
> >> At the time, I thought not.
> >> Within the company, the story was that AT&T would be free to enter
> >> the computer maker market thereby becoming the next big thing.
> >
> > IMHO, at the time AT&T made the compromise decision (circa 1980),
> > their path seemed generally pretty reasonable, except, perhaps,
> > for keeping Western Electric.  
> >
> > I think given the atmosphere of the time--there was a lot of anti-Bell
> > feeling among regulators, legislatures, Judge Greene*, DOJ, and 
> > newcomers who wanted a piece of the market, that AT&T was doomed 
> > in court.
> >
> > * Oslin's book says Greene was clearly out to 'get' the Bell System--
> > he thought it was an evil monopoly and he sought a reform agenda.
> >
> >> Ridiculous.
> >
> > Wanting to get into the computer business was certainly a good
> > decision by AT&T.  The company had outstanding talent and 
> > experience in electronics and software.  It had the name.
> > It had Bell Labs and W/E to develop and manufacture stuff.  
> > Unfortunately, like so many other large American companies,
> > it just didn't 'click' in the computer marketplace.
 
  
> With no reasonable sales force and lots of very able
> competition, they didn't stand a chance.
> I felt that way at the time.

Your point about the lack of a sales force is a good one.  Though
the old Bell System had a sales force--such as encouraging customers
to get a premium telephone set or advanced equipment, basically 
the old AT&T was not used to marketing products in a competitive 
marketplace.

Indeed, in terms of selling computers, many companies did not
develop their sales forces the way IBM thoroughly trained it
sales force.


> > Remember, IBM was terrified in the 1950s of big players
> > like RCA and General Electric who had so much more than
> > IBM did, yet IBM prevailed.
> >
> > Indeed, at the time, everyone thought AT&T would give IBM
> > stiff competition in computers (and IBM would give AT&T
> > competition in communications).
> >
> > For whatever reasons, AT&T didn't succeed at computers.
 
  
> IBM went though an anti-trust case at around the same time.
> There was every reason to believe AT&T would have the same outcome.


There were a number of significant differences between the IBM and
AT&T break-up lawsuits of the 1970s:

. IBM had changed its ways:  IBM significantly revised its pricing
policies, eliminating bundling.  This made it a lot easier for
hardware vendors to compete, and also allowed software vendors
to come into the marketplace.  Some of the government's issues
were no longer valid.

. IBM settled a major lawsuit with Control Data.  This lawsuit was
a big part of the government's case, and when settled, the
government could no longer use the documentation (as traditional
in civil cases), hurting the government's case.

. AT&T had more enemies.  IBM served only business customers,
and generally (outside typewriters) large ones.  In contrast,
AT&T served 85% of the people and businesses* in the continental
U.S.  Everybody wanted lower telephone rates, and in those days
of social unrest, AT&T was a big target, more so than IBM.
  Further, MCI wanted very badly to get into the long distance
market freely.  Other companies wanted to sell telecommunications
equipment.  AT&T had a 90% market share*, and others wanted a
piece of that pie.  Nobody bothered to think about what they
would give up (except the military, which was worried.)


* The other 10% telecom market share was served by the 
independent telephone companies, primarily General Telephone.  


After Divestiture, many businesses found that won a 'hollow'
prize.  Sure, they saved money on long distance and equipment.
But, now they had to spend money on telecom administration--
doing things the Bell System used to do for them.  They had to
physically maintain their business telephone networks and
found it wasn't as easy as they thought.  The Bell System
let go a lot of people, and companies ended up hiring them.
In terms of cost, it was "six of one, half dozen of the other."

For companies expanding at that time (my old employer was),
there was considerable disruption in acquiring and 
operating both data lines and voice lines.  Immediately
after Divestiture, AT&T and the Baby Bells began to 
finger-point at each other, failing to resolve problems
and delaying installation.  Coordination was terrible.
That employer had to go out and purchase specialized
network diagnostic equipment for the data lines and hire
people to operate it.  It wasn't cheap.

My employer certainly did not see this as a cost savings,
especially unit managers who had a staff of people sitting
idle since their computer terminals were repeatedly down 
due to line trouble.  It took a few very frustrating years 
to clean up the mess.