lars@ACC.ARPA (01/15/86)
From: SAGE::MAILER 15-JAN-1986 07:09 To: LARS Subj: [Netmail From: hammond%lafite@mouton.ARPA (Rich A. Hammond at lafite.UUCP)] Re: Touch Tone Access Charges Date: Wed, 15 Jan 86 10:02:01 est From: hammond%lafite@mouton.ARPA (Rich A. Hammond at lafite.UUCP) Message-Id: <8601151502.AA29329@lafite.UUCP> To: lars@acc-sb-unix.arpa, lars@acc.arpa Subject: Re: Touch Tone Access Charges 1) You posted from acc-sb-unix.arpa, but said your return address was acc.arpa. Since our hosts lists those as 2 different places, I sent it to both. As I understand the system: 1) Charges for Touch-tone service are set by the local operating companies with the consent of the PUC (or it's equivalent). The extra charge for Touch tone service is essentially a tax on the "rich" (since it is a "premium" service) transferred to the "poor" (who use pulse dialing). This is influenced by "politics" since the local companies are still a monopoly and some redistribution of costs vs prices is done. Thus, there is typically (another example) a "lifeline" service grade that allows people to have a phone, at a less expensive rate. The cost is picked up by all other subscribers. 2) The cost to the phone companies of new equipment is typically depreciated over a long (i.e. 20 years) period of time, so we are in fact paying for equipment that was installed quite some time ago. Paying the costs over the long term is like buying a house with a mortgage, the total cost is more, but the monthly outlays are small. 3) The actual cost of providing the service isn't the problem, the problem is revenue. The telephone companies want to continue to make as much money as before, so if they charge less for Touch-tone, then the pulse service (or some other service) has to go up in price. You can guess at the reaction of the Public Utilities Commision to such a proposal, since they view Touch tone as a "premium" service. 4) Arguments that the phone companies should simply take in less money I won't buy, since I didn't hear those complaining about the cost volunteering to work for less this year than last, which is what they are asking the phone companies to do. Rich Hammond hammond@bellcore-cs-gw.arpa ------
wmartin@ALMSA-1.ARPA (Will Martin -- AMXAL-RI) (01/16/86)
>4) Arguments that the phone companies should simply take in less money >I won't buy, since I didn't hear those complaining about the cost >volunteering to work for less this year than last, which is what they >are asking the phone companies to do. > >Rich Hammond hammond@bellcore-cs-gw.arpa You may not buy such arguments, but I certainly do. First off, I qualify under your criteria, though I disagree that such criteria have any bearing on this. I am a federal employee. There has been a federal pay freeze in effect. Inflation continues. Therefore, I AM volunteering to work for less money next year, as my salary remains the same while the value of the amount of money lessens. Therefore I (by your standards) must be speaking from a position of virtue and self-sacrifice, and my words thus have greater value, coming from such an admirable source. (need I add :-) ?) ('tis true, anyway...) Anyhow, to get to the meat of the matter -- the telcos (at least the oldline BOCs and probably AT&T itself) waste so much of the income they now extort from the customer base that they most certainly CAN take in less money and still provide improved service. From the little details (that add up to huge sums when taken in toto) like the fact that they don't bother to recycle the envelopes that come with the bills [if you turn in a perfectly good unused envelope when paying a bill in person they throw it away!], to the major wastage [Southwestern Bell just built a huge new office building in downtown St. Louis, putting in $400,000 worth of fancy marble in the lobby, and then covering it with another layer of decorative stone because they didn't like the way it looked!], vast executive-level salaries, fancy offices, and inflated administrative staffs, the telcos have a long history of throwing money away because they could always use their lawyers to manipulate the PUCs in every state to get just what they wanted. Consumer groups don't stand a chance against their resources, and they own enough legislators to control any and all applicable laws. When the telcos adopt the federal GS-schedule pay scale as their pay standard (which limits white-collar pay to the range of about $10 - $68 K which is enough to live on and get by if you live sanely), when the offices they work in have the same level of furnishings that mine have (adequate functionally but no particular fanciness or costs wasted on decor), and when all the corporate-level perks and indulgences like political and social donations are eliminated, THEN I'll accept that they are at a justifiable level of expense. If this situation was somehow forced upon them, and then an independent auditing calculated what the phone billing charges would be, I venture to surmise that our phone bills would be half or less of their current levels. Note that I am not saying that the "phone man" out there in the truck is getting overpaid and living a life of luxury at my expense. He might be, but I doubt it. The money is not going into the salaries of low-level personnel (though there are probably excessive numbers of clerical and secretarial types in the administrative offices whose jobs would be eliminated when those offices are pared down to strictly necessary levels); it is going into buildings, furnishings, empire-building, and the pockets of upper levels of a bloated and unneeded management, who have the maintenance of their own and their compatriots' comfort as their main interest, not the providing of the best possible telephone service at the lowest possible cost. Will Martin