High Expectations Blamed For Telecom Competition Squabbles
November 9, 1998
MARIETTA, GEORGIA, U.S.A., Rows between telephone companies, such as Thursday'sepisode in which AT&T Co. [NYSE:T] called a press conference to complain about Bell Atlantic Corp.'s [NYSE:BEL] performance in switching business customers to AT&T's local phone service in New York, result from a "chicken and egg" problem that might be solved by warning consumers to expect some problems in the early days of local phone competition, telecommunications consultant Jeffrey Kagan says.
Kagan, president of Kagan Telecom Associates and author of the 1997 book " Winning Communications Strategies," told Newsbytes he does not believe regional Bell operating companies such as Bell Atlantic are deliberately causing delays or problems with orders from AT&T and other would-be local-exchange competitors. "I think it's simply a case of blazing new trails and having to work out the bugs as they go along," he said.
Kagan said it is inevitable there will be problems in implementing local competition, just as there were when long-distance competition began in the early 1980s. The difference is that consumers then expected some hiccups, and were prepared to accept them in exchange for savings, but consumers today are cutting phone companies very little slack, and carriers such as AT&T are worried about possible damage to their highly valued brand names if customers have bad experiences.
The best answer, Kagan said, would be for the entire phone industry to work together to tell consumers they should not expect perfection during the transition period to local competition.
"It's in everyone's best interest for the consumer to be educated," Kagan told Newsbytes. The new competitors would benefit from protecting themselves against customer dissatisfaction by better managing expectations. The incumbent carriers would benefit because the sooner local competition becomes a reality, the sooner they will be allowed to enter the long-distance market.
Much of the problem at the moment is that the only way to work the kinks out of systems for things like hot cuts -- the process of switching a local connection from one carrier to another -- is to use them to process plenty of real live orders. But competitors are hesitating to ramp up their local-service marketing and start putting those orders through because they are afraid problems with the orders will annoy their customers and send them back to incumbents in a huff.
By persuading customers to cut them some slack, telephone companies could get on with putting the orders through and working the bugs out of the systems, Kagan said. That kind of cooperation would be better than mutual recriminations. "What AT&T did yesterday just throws fuel on the fire. It doesn't solve the problem."
In yesterday's press conference, Michael Morrisey, AT&T's vice- president of law and government affairs, told reporters that Bell Atlantic failed to execute 89 to 99 percent of orders for hot cuts within the agreed-upon five-day period. He did not say the failures were deliberate, though he suggested Bell Atlantic was less than enthusiastic about helping customers move to AT&T. A Bell Atlantic spokesman described the AT&T complaint as "another in a long series of delaying tactics" aimed at keeping Bell Atlantic out of the long-distance business.
The AT&T complaint was not unique. Recently the Colorado Public Utilities Commission supported complaints by long-distance carriers interested in entering the local market about the way US West Inc. handled the unbundling of network elements in that state. Competitive local exchange carriers across the country have complained about the incumbent carriers' procedures for interconnecting competitors' networks with their own.
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