🚀 go-pugleaf

On Saturday, February 3, 2018 at 3:23:45 PM UTC-5, none William Pechter wrote:

> >AT&T could have divested Western Electric and kept the operating
> >companies and Bell Labs, but made the spectacularly wrong prediction
> >that there'd be more money in long distance than in POTS.

> Absolutely, that's a bad strategic call thinking that Long Distance would
> continue as the corporate cash call in the future and not seeing
> the local loop and modems/networks/video services as the future.

IMHO, in 1980, when AT&T made their plans, keeping long distance
seemed like a good idea.  Here's why:

. Regulators were tightly focused on local service, which included
considerable POTS that was expensive to serve yet generated little
revenue.  In poor areas, regulators made it easier for customers
to not pay their bills yet keep service, so revenue took a hit.
Urban areas had crime troubles, adding to expenses.  Local service
did not seem to have much of a future.

. In contrast, all the growth seemed to be in long distance, both
voice and especially data.  

. New technology would allow lower costs and thus higher profits
in long distance.

. Economies of scale were more and more important, and AT&T would
have them.

. Regulators were more focused on individual service, not as much
long distance.


> They should've negotiated a government funded transition to fiber to the home
> and the could've transitioned the country to a new Bell System.

In 1980, I don't think fiber technology was mature enough yet for
home service--too expensive (especially in terms of terminal
equipment.)  Also, at that time, I don't think regulators would allow
AT&T to carry TV signals--that belonged to cable.


> We're getting close to having less cable/phone/internet suppliers than there
> were operating Baby Bells.

True.