Letters to the editor: “AT&T: Fall of an Icon”

Also, vision quest, Fore Systems

Fall of an icon

I enjoyed the article, “AT&T: Fall of an Icon”.  I teach courses at Washington University on telecommunications regulation and public policy, economics of telecom, and technology economics, and the topics in your article are ones I am familiar with, but seldom see written about in the trade press or popular press.  I appreciate the historical perspective of the article.  I raise four related points:

· Part of what this shows is the inappropriate level of constraints that tend to be placed on large market participants in historically regulated industries that now face changing technology and market conditions.  The constraints on AT&T (by the Justice Department and FCC) were obviously well beyond those appropriate for a firm attempting to compete in dynamic and converging markets.  Indeed, constraints on AT&T’s ability to leverage its “monopoly” power into the computer industry (initially the “data processing” industry) seem ludicrous in hindsight.

· I take some issue with a statement:  “AT&T had two choices: spin off its 22 local operating companies into seven Bell holding companies, while retaining equipment manufacturing and R&D — Western Electric and Bell Labs, respectively; or retain the Bell operating companies and divest equipment manufacturing and R&D.”  The choice was not so simple.  AT&T did have some choice on the degree of reliance on structural separation, or additional regulatory constraints and monitoring (this was described by some as the “Chinese Menu”; some from column A/structural separation, some from column B/additional regulation).  However, what was generally considered the most egregious anti-competitive actions (e.g., stranding MCI customers by terminating connection with MCI) were with respect to the local/long distance parts of the business, not manufacturing.  It seems highly unlikely that the Justice Department would have allowed AT&T to remain structurally integrated with the 22 local operating companies (even with divestiture of manufacturing and R&D) without significant additional burdensome constraints on AT&T.  While some at AT&T may have believed that such a choice was possible (divest local or manufacturing/R&D) I don’t think such a choice was realizable, especially with Judge Harold Greene presiding.

· Part of the disadvantage AT&T faced at divestiture was beyond the scope of their control, or prediction.  After the divestiture agreement between the Justice Department and AT&T was presented to Judge Greene, Greene required five changes to the agreement, four of which largely worked to the disadvantage of AT&T and to the advantage of the seven RBOCs.  In order of my impression of their importance, these changes were: 1) RBOCs kept yellow pages publishing; 2) ban AT&T from electronic publishing for seven years; 3) allow RBOCs to market (but not manufacture directly) telecom equipment; 4) allow RBOCs to file waivers (seeking exceptions) to their constraints.

·  Prior to divestiture, AT&T had started a process of “migration” moving customers from central office-based Centrex to customer premises based PBX equipment.  AT&T likely underestimated the extent to which the RBOCs could halt, and reverse, this process – making equipment manufacturing less attractive than expected. 

Steve Parsons

President, Parsons Applied Economics

Professor, Washington University

St. Louis, Mo.

 “AT&T: Fall of an icon” is the kind of reporting that can and should be taught in colleges and universities.  It was especially great to interview executives who actually were a part of the decision-making process at AT&T.  As a 25-year veteran of the industry and an ex-AT&T employee, I found the perspective to be just great.

Hopefully a new generation of IT professionals will read and look back and learn.

Nick Francis

President

The Madison Group

Cary, N.C.

Vision quest

I thoroughly enjoyed Daniel Briere’s column, “Where’s Walt Disney when you need him?” . I grew up among visionaries like Disney; they’re the reason I became an engineer.

Engineering was a daring, visionary profession that made the future a reality. Today, there is no vision, no daring, only the immediate bottom line. A while back, engineers ran the great technology companies in the U.S. Now, accountants run them and try to impose the rules of accounting all the way down to the lowly line engineer, stifling any sense of innovation. Any innovative idea must fit precisely into the process plan only at the appointed time. Otherwise, no innovation needed, thank you.

This mind-set is rippling down throughout our culture and government. Everything is about immediate gratification. Nowhere do you see commitment, strategic thinking, long-term investment, basic research, or innovation. If this trend doesn’t turn around, we will soon take a technological “back seat” to the rest of the world, which isn’t quite as short sighted and a lot more ambitious.

Jonathan Hujsak

San Diego

Fond memories of Fore

Regarding Johna Till Johnson’s column, “A fond farewell to Fore Systems”: Thanks for remembering us. I had the honor of being the first sales person at Fore and ran worldwide sales until the Marconi/GEC acquisition. Fore was a special place, with the right technology at the right time, with the best culture of any high-tech company I have ever seen. Most people do not understand the value of culture and the value of the people who make up that culture. Every day I get e-mails from former employees who joyously talk about their Fore days as the best days of their lives. Thanks again for the sweet article.

Mike Green

Chairman

SalesGene Corp.

Pittsburgh

Thanks to Johna Till Johnson for her column, “A fond farewell to Fore Systems”. I worked there for almost five years as a quality assurance engineer. In QA, we did our very best to “break stuff,” but it wasn’t easy; as Johnson states, the gear was rock solid.  We took great pride in our work.

We thought of ourselves as extended family — so much so that last year, more than 2,000 former Fore employees attended a reunion at Heinz Field in Pittsburgh. We rented out the banquet facilities so that we could toast the “little company that could…and did” at midnight on 04/04/04. We continue to stay in touch with one another, have an alumni Website and mailing lists for our own “Fore network.” I challenge you to find another company that has that kind of loyalty.

We don’t live in the past, but rather use our experiences at Fore to remember what an ideal work environment was. We had a reputation for being a group of twenty-something party animals that played foosball, had catered Friday happy hours and slept in hammocks.  We did do that, but we also worked our behinds off. Fore’s work philosophy was one of self-governance. There were no set work hours. I worked with people who would come in at noon and people who came in at 4 a.m. It was accepted that not all people work best between the hours of 9 a.m. and 5 p.m. Everyone received stock options, even the admins and mail clerks. The idea was that everybody was critical to the success of Fore, there were no exceptions.

We had a full gym and a cafeteria that had high chairs for the little ones. Babies and toddlers were welcome during the day, although not at meetings. I had lunch with my wife and son two or three times a week. I’d change his diapers in my office, while my boss and I were having development conversations, without fear of being reprimanded or embarrassed.

I’ll leave you with the standard demo that would usually close a deal for us. We would start streaming “Top Gun” across an array of switches to multiple PCs and workstations. Then one by one, we would remove the redundant network cards, redundant power supplies, and finally the dual processor cards that contained the CPUs. At this point all that was left was a single network card in each switch with the fiber connections stringing across the array of gutted switches with 90% of everything removed, piled on the floor and nobody ever saw a frame of the movie skip.

Michael Kurzawa

Oakmont, Pa.