Date: Fri, 13 Mar 1992 13:31:44 -0500
From: Craig Neidorf <
[email protected]>
Subject: File 3--Standing Up to Stop the Bells
Did you hear about 1-800-54-Privacy? Did you decide to call? I did
and the following is the information I received a few weeks later. It
outlines some of the serious ramifications of what is going to happen
if we do not actively support Congressional bills S 2112 and HR 3515.
The information comes from the American Newspaper Publisher's
Association (ANPA). Keep in mind, they have a vested financial
interest in information services as do many others, and in many ways,
the newspaper industry can be and has been just as dishonest and
deceptive as the Regional Bell Operating Companies. However, in this
particular situation, the ANPA has the right idea and does a pretty
good job in explaining why we need to act now and act fast.
You know who I am, and what I've been through. My experiences have
given me a unique perspective and insight into the methods and goals
of the Regional Bell Operating Companies. They are inherently
deceptive and if given even the slightest chance, they will screw the
consumer and engage in anti-competitive market practices.
Additionally, their tactics threaten our personal privacy as well.
The RBOCs must be stopped before its too late.
Craig Neidorf
[email protected]
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
1-800-54-Privacy
444 N. Michigan Avenue
Suite 900
Chicago, Illinois 60611
February 14, 1992
Dear Consumer:
If you're like many people, you may have been hesitant about leaving
your name and address on our 1-800-54-PRIVACY phone line.
Why?
Quite simply, no one wants to give out information about themselves
without knowing exactly how that information is going to be used.
But the truth is, you reveal information about yourself EACH AND EVERY
TIME YOU PICK UP THE PHONE. By tracking who you call, how often you
call and how long each conversation lasts, the seven regional Bell
telephone companies have the capability to learn and know more about
you than even the IRS.
In fact, with modern computer technology, there is practically no
limit to what the Bells can learn about your personal life every time
you pick up the phone. And there is virtually no limit -- only one's
imagination -- to the ways they can take advantage of all the
information they glean.
Of course its one thing to have the capability to do this snooping.
It's another thing to have the incentive to actually do it.
Until October 7, 1991, the incentive just didn't exist for the Bells.
Prior to this date, the vast electronic networks of the Bell
monopolies were just neutral carriers of phone messages, data, and
other companies' fax, audiotex, and videotex services.
For example, when you last called a 1-900 or 1-800 line to get the
latest stock quotes, sports scores, or headlines, your local phone
company served simply as the pipeline for moving the billions of
electrons in your call. The company that provided you with the
information over the phone line was not -- and by law, could not be --
the phone company.
And that's the way things had been since 1984, when U.S. District
Court Judge Harold Greene issued his now-famous decree breaking up the
AT&T monopoly and spinning off control of local phone service to seven
regional Bell companies.
In the decree, the Court expressly prohibited the individual Bells
from entering three businesses -- cable TV, telephone manufacturing,
and electronic information services.
Why?
After presiding over the lengthy AT&T anti-trust case and being
exposed to hundreds upon hundreds of monopolistic abuses by AT&T,
Judge Greene's Court was firmly convinced that, if allowed to enter
any of these three current areas, the Bells would undoubtedly engage
in the same monopolistic behavior that characterized their former
parent.
In other words, while cutting off the hydra-like AT&T head, Judge
Greene was fearful that, given too much leeway, AT&T's seven so-called
"Baby Bell" off-spring might become equal or worse monsters
themselves.
From day one, however, the Bells undertook a long-term, multi-million
dollar lobbying campaign to fight Judge Greene's ruling and try to
convince the Justice Department, the higher courts, and even the U.S.
Congress that they should be permitted to enter the content end of the
information service business.
And, so, on October 7, 1991, after years of heavy lobbying, a higher
court came through for the Bells and practically ordered Judge Greene
to overturn his 1984 decree and open up the information services
industry to the Bells.
In the 71-page ruling, a very reluctant Judge Greene devoted
two-thirds of his decision to explaining why allowing the Bells to
sell information services was bad for consumers and bad for America.
For example, he went to great length to discount the Bells' claim
that, once given the green light, they would be better able to serve
the public than the thousands of already existing electronic
information services. To quote from his decision.
"In the first place, the contention that it will take the
Regional Companies (the Bells) to provide better information
services to the American public can only be described as
preposterous."
Judge Green also wrote:
"Moreover, the Court considers the claim that the Regional
Companies' entry into information services would usher in an era
of sophisticated information services available to all as so much
hype."
His decision also contains a warning regarding the prices consumers will be
forced to pay for Bell-provided services:
"The Regional Companies would be able to raise price by increasing
their competitors' costs, and they could raise such costs by virtue
of the dependence of their rivals' information services on local
network access."
Finally, here's what Judge Greene had to say about his court's
decision and the public good:
"Were the Court free to exercise its own judgment, it would
conclude without hesitation that removal of the information
services restriction is incompatible with the decree and the
public interest."
If Judge Greene's warnings as well as his profound reluctance to issue
this ruling scare you, they should.
That's because the newly freed Bells now have the incentive, which
they never had before, to engage in the anti-competitive,
anti-consumer practices that Judge Greene feared.
Besides using your calling records to sell you information services
they think you're predisposed to buy, the Bell's may well try to
auction off your phone records to the highest bidder.
As a result, anyone who ever uses a phone could well be a potential
victim of the Bell's abuse.
Consider the simple act of making a telephone call to an auto repair
shop to schedule body work or a tune-up. By knowing that you made
that call, your phone company might conclude that you're in the market
for a new car and sell your name to local car dealers.
Another example. Think about calling a real estate broker for
information on mortgage rates. Knowing you must be in the market for
a house, the Bells could sell your name to other brokers. Or they
could try to sell you their own electronic mortgage rate service.
Now let's say you and your spouse are having some problems and one of
you calls a marriage counselor. Tipped off by information purchased
from the phone company, a divorce lawyer shows up on your doorstep the
next morning.
Finally, think about calling your favorite weather service hotline --
a competitor to the weather service operated by your local phone
company. By keeping track of people who use its competitor's service,
the phone company might just try to get you to buy its weather service
instead.
Far-fetched? Not at all.
Nefarious? You bet.
That doesn't mean that, starting tomorrow, your phone company is going
to start tracking who you call, how long your calls last, and who
calls you. However, they could do it if that wanted to. And, based
on past experience, some of them probably will do so at one point or
another.
That's because the protest of gaining an unfair edge over the
competition --companies that have no choice but to depend upon the
Bells wires -- is just too tantalizing a temptation for the Bells to
ignore.
As you might expect, the Bells claim that these fears are totally
unfounded and that strict regulations are in place to prevent them
from abusing your telephone privacy.
However, there simply aren't enough regulators in the world to control
the monopolistic tendencies and practices of the Bells. Every single
one of the seven Bells has already abused its position as a regulated
monopoly. There is no reason to believe they won't in the future.
For example, the Georgia Public Service Commission recently found that
BellSouth had abused its monopoly position in promoting its MemoryCall
voice mail system. Apparently, operators would try to sell MemoryCall
when customers called to arrange for hook-up to competitors'
voice-mail services. Likewise, while on service calls, BellSouth
repair personnel would try to sell MemoryCall to people using
competitors' systems. BellSouth even used competitors' orders for
network features as sales leads to steal customers.
In February 1991, US West admitted it had violated the law by
providing prohibited information services, by designing and selling
telecommunications equipment and by discriminating against a
competitor. The Justice Department imposed a $10 million fine -- 10
times larger than the largest fine imposed in any previous anti-trust
division contempt case.
In February 1990, the Federal Communications Commission found that one
of Nynex's subsidiaries systematically overcharged another Nynex
company $118 million for goods and services and passed that extra cost
on to ratepayers.
The abuses go on and on.
In this brave new world, however, it's just not consumers who will
suffer. Besides invading your privacy, the Bells could abuse their
position as monopolies to destroy the wide range of useful information
services already available
Right now, there are some 12,000 information services providing
valuable news, information, and entertainment to millions of
consumers. Every one of these services depends on lines owned and
controlled by Bell monopolies.
This makes fair competition with the Bells impossible.
It would be like saying that Domino's Pizzas could only be delivered
by Pizza Hut.
It would be like asking a rival to deliver a love note to your
sweetheart.
It would be a disaster.
If the Bells aren't stopped, they will make it difficult -- if not
impossible -- for competitors to use Bell wires to enter your home.
They could deny competitors the latest technological advances and
delay the introduction of new features. They could even undercut
competitor's prices by inflating local phone bills to finance the cost
of their own new information services.
In the end, the Bells could drive other information services out of
business, thereby dictating every bit of information you receive and
depriving the American public out of the diversity of information
sources it deserves and that our form of government demands.
Can something be done to stop the Bells?
Yes, absolutely.
You can take several immediate steps to register your views on this
issue. Those steps are described in the attached "Action Guidelines"
sheet. Please act right away.
In the meantime on behalf of our growing coalition of consumer groups,
information services providers, and newspapers, thank you for your
interest in
this important issue.
Sincerely,
Cathleen Black
President and Chief Executive Officer
American Newspaper Publishers Association
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
ACTION GUIDELINES
Something is very wrong when a monopoly is put into the position where
it can abuse your privacy, drive competitors from the market, and even
force you, the captive telephone ratepayer, to subsidize the costs of
new information services ventures.
Can something be done to stop this potential abuse?
Absolutely.
WHAT YOU CAN DO. The first step is to call or write your local
telephone company to assert your right to privacy.
The second step is to write your U.S. Representative and U.S. Senators
and urge them to support House bill 3515 and Senate bill 2112.
Since the purpose of both HR 3515 and S 2112 is to prevent the Bells
from abusing their monopoly position, not to prevent legitimate
competition, the Bells would be free to sell information services in
any area of the country where they do not have a monopoly -- in other
words, 6/7 of the country.
However, the bills would delay entry of the Bell companies into the
information services industry in their own regions until they no
longer held a monopoly over local phone service. As soon as consumers
were offered a real choice in local phone service -- whether it be
cellular phones, satellite communications, or other new technology --
the Bells would be free to offer any information services they wanted.
Both bills are fair to everyone. They protect consumer privacy and
ensure that the thriving information services industry will remain
competitive.
Quick action is need to pass these bills. A hand-written letter
stating your views is the most effective way of reaching elected
officials. It is proof positive that you are deeply concerned about
the issue.
POINTS TO MAKE IN YOUR LETTER
You may wish to use some or all of the following points:
A phone call should be a personal and private thing -- not a
sales marketing tool for the phone company.
The Bells should not be allowed to take unfair advantage of
information they can obtain about you by virtue of owning and
controlling the wires that come into homes.
The Bells must not be allowed to abuse their position as
monopolies to drive existing information services out of
business.
The Bells should not be permitted to engage in activities that
would deprive Americans of the information diversity they deserve
and that our form of government demands.
The Bells should not be permitted to finance information services
ventures by inflating the phone bills of captive telephone
ratepayers.
AFTER YOU'VE WRITTEN YOUR LETTER
After you've written your letter or made your phone call, please send
us a letter and tell us. By sending us your name and address, you'll
receive occasional updates on the massive effort underway to prevent
the Bells from invading your privacy and turning into the monopolistic
monsters that Judge Greene warned about.
There's one more thing you can do. Please ask your friends,
relatives, neighbors, and co-workers to urge their U.S.
Representatives and Senators to support HR 3515 and S 2112. We need
everyone's help if we're going to stop the Bells.
1-800-54-PRIVACY
444 N. Michigan Avenue
Suite #900
Chicago, Illinois 60611
Downloaded From P-80 International Information Systems 304-744-2253
