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To: Kenneth E. Phillipps who wrote (1781)	8/3/1998 12:29:00 PM
From: DenverTechie	Respond to of 12823

Excellent article on local phone competition, Ken. This is exactly what Time Warner ran into in Rochester, and they had to learn it the hard way. Customer inertia is huge and the competition plays on the reliability thing (perception is reality) to dissuade changing providers. There is usually not enough difference between the $20 per month they charge vs. the $16 or $17 a month a competitor has to charge to have even a slim profit margin to make it worthwhile in the consumer's mind. So most of the competitors now, including TW, concentrate on business accounts as the article states. I agree with its conclusions completely.

To: Kenneth E. Phillipps who wrote (1781)	8/3/1998 10:57:00 PM
From: Ray Jensen	Respond to of 12823

Kenneth, to follow up on the San Jose Mercury article, I read in today's Sacramento Bee that AT&T is giving people that signed up for their local service (provided via leased lines from Pac Bell) a $58 dollar incentive payment to discontinue their AT&T local service and switch back to Pac Bell. Yes, when the ILEC is mandated to charge only $11.25 per month for flat rate local service by the Public Utilities Commission, the PUC shares part of the blame for a lack of local competition in many parts of California. However, Cox is doing pretty good in its bundling of services approach in Southern Calif. Ray.