From: deej@cbnewsf.cb.att.com (david.g.lewis)
Newsgroups: comp.dcom.telecom
Subject: Re: Omaha May Get Second Dial-Tone Provider
Date: 13 Dec 92 14:48:24 GMT
Organization: AT&T
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 12, Issue 904, Message 7 of 14

In article <telecom12.895.1@eecs.nwu.edu> Jack.Winslade@ivgate.
omahug.org (Jack Winslade) writes:

> Some material taken from {Omaha World-Herald}, Sunday, Dec. 6, 1992.

> 'In recent weeks, Teleport Communications Group of New York has been
> setting up operations in Omaha.  It is building a fiber-optic network
> and plans to compete with US West, Nebraska's regional telephone
> company, for some local business phone services.'

> The article reports that the parent company of Cox Cable, Omaha's
> cable television franchise, is the majority shareholder of Teleport.

> Teleport stated that it currently plans only to compete for business
> customers, but they 'do not rule out competing for other local phone
> services.' ... 'Teleport initially will attempt to pick off some of US
> West's high-volume business customers -- telemarketers and businesses
> that transmit data -- by offering to connect them to long distance
> companies for less than US West's local access charges.'
 
> The article stated that US West has indicated that this may raise
> prices for residential customers.

This is a usual claim of monopoly telcos -- the high-end customers that
a CAP goes after cross-subsidize the "general public", and therefore
competition will result in higher prices for the LOLs.

It's interesting, though -- companies with a large number of rural
subscribers like US West claim that the rural subscribers are the ones
who will suffer, while companies with a large number of urban/suburban
subscribers like NYTel claim that the urban/suburban subscribers are
the ones who will suffer.

Which has led Bob Atkinson, VP of legal/regulatory affairs at
Teleport, to offer to NYTel that -- given NYTel's claim that the local
exchange business is so unprofitable as to require cross-subsidy from
the 2% of customers that Teleport pursues - Teleport will buy NYTel's
local exchange business at book value.  Funny, but NYTel doesn't take
it seriously.

> A sidebar stated that Teleport is currently constructing a fiber-
> optic 'ring' around the area.  Businesses could use this either to
> communicate directly or to access LD providers.  Service will begin in
> January to some customers.

> JSW's notes ({WH} would never say this stuff): Among the cable
> subscribers I know (we do not subscribe to cable -- not enough time to
> watch free TV very much), the opinion of Cox Cable ranges from
> reasonable satisfaction on the high end to unprintable on the low end...

While Cox Communications is the majority shareholder in TCG, the TCG
management team is separate from the various Cox companies.  This was,
as far as I know, a condition of the buyout from Merrill Lynch - that
TCG remain intact.  The TCG corporate culture is a lot closer to AT&T
than to Cox, since probably half of the management have Bell System
backgrounds.  Of course, TCG is a lot more aggressive and responsive
that AT&T typically is ...

Disclaimer: I used to work for TCG.


David G Lewis                              AT&T Bell Laboratories
david.g.lewis@att.com or !att!goofy!deej     Switching & ISDN Implementation