[comp.dcom.telecom] AT&T and Regulation

ekrell@hector.UUCP (Eduardo Krell) (02/12/89)

In article <20406@shemp.CS.UCLA.EDU> gast@CS.UCLA.EDU () writes:

>If AT&T could engage in monopolistic paractices while they were 100%
>regulated, surely they would be better able to do so if they had no
>regulation.

Of course, you fail to mention that AT&T doesn't own any of the local
Bell companies anymore, which was the basis for the "monopolistic practices"
you mentioned.

>Consider the present world for a moment.  AT&T is now advertizing that
>if you are a BIG, BUSINESS customer, they will match any other company's
>prices.

Excuse me, but you don't have to be a BIG BUSINESS to spend $120 a month
in long distance calls.

> Why do they only want to offer lower prices for BIG, BUSINESS
>customers?  Why should the consumer pay higher prices so big, customers
>can pay less?

It's called economy of scale. The more you buy, the smaller the marginal
cost. It happens everywhere. When you buy groceries at a supermarket,
the bigger the package the cheaper the cost per unit.
If you or I, as individuals, want to buy say a Sun workstation, we'll
have to pay list price. When your University or a company buys a bunch
of Suns, they get a discount. How big a discount? It will depend on
the volume. The more you buy, the cheaper.

>   The little old man
>   who does not even know what a modem is probably does not care that
>   today's lines can handle 9600 baud transmission instead of 120 baud
>   transmission, or whatever the exact baud rates would be.  That same
>   man, however, is forced to pay for these improvements.]

But in the long term, those improvements benefit all users. For instance,
fiber optics vs copper. The capacity of fiber is orders of magnitude
larger than that of copper at a fraction of a price. Higher capacity
means less expeditures in expanding the network in future years
and lower costs means lower prices for the customers.

Eduardo Krell                   AT&T Bell Laboratories, Murray Hill, NJ

UUCP: {att,decvax,ucbvax}!ulysses!ekrell  Internet: ekrell@ulysses.att.com