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SMART Letter #13 - November 3, 1998
For Friends and Enemies of the Stupid Network
Copyright 1998 by David S. Isenberg
isen@isen.com -- http://www.isen.com/ -- 1-888-isen-com
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ANNOUNCEMENT: An Afternoon with George Gilder, December 10,
4-7 PM, Stevens Institute of Technology, Hoboken NJ.
For registration info, email robin@isen.com.
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CONTENTS:
+ Lead essay: Trail of Broken . . . battles the Baby Bells
+ Year 2000 Reflection, and a possible Leading Indicator
+ Conferences on My Calendar, Copyright Notice, Administrivia
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TRAIL OF BROKEN PROMISES:
Former consultant uses pen to battle the Baby Bells.
By David S. Isenberg
Bruce Kushnick doesn't get invited to fancy telecom meetings anymore.
When he began exposing the Baby Bells' patterns of broken promises, his
status dove from top telemedia consultant to industry pariah.
Kushnick has been over the edge so many times that he's smoothed a
groove in it. He was a horrible student in high school, but left
Brandeis magna cum laude. He often went homeless, crashing in MIT dorm
rooms on nights when their occupants were trysting. Along the way, he
took acoustics from Amar Bose, linguistics from Noam Chomsky,
artificial intelligence from Marvin Minsky and music from Leonard
Bernstein.
In the early 1980s Kushnick's interest in psychoacoustics and computer
music led him to the forefront of the emerging interactive voice
response (IVR) industry. He designed a system that would let record
stores enter sales figures into a centralized database via telephone so
record companies could track the effects of airplay on record sales.
This was revolutionary stuff in the early '80s, when 300-baud modems
cost more than $1,000.
In 1985 Link Resources hired Kushnick for his voice processing
expertise. Phone companies and the business community smelled money in
IVR, and he quickly became the media's star consultant du jour. His
name appeared regularly in The New York Times and The Wall Street
Journal. His $5,000 IVR reports sold well and the conferences he
organized drew hundreds. He left Link in 1988 to form his own company,
Strategic Telemedia, which sold IVR work to all the big telcos.
And then . . .
Riding his success, one day Kushnick took a long look at Strategic
Telemedia's own telephone bill to figure out where his money was going.
"I didn't understand any of the charges," he says. Curiosity piqued, he
examined his 87-year-old Aunt Ethel's phone bills and found that over
the last 14 years she had paid more than $1,500 in unnecessary phone
rental and wire maintenance charges. He tried to get explanations from
his clients at the big phone companies, but he couldn't.
Also, his work on ISDN and fiber optic networks was beginning to
uncover evidence of deliberate rollout delays, despite public Baby Bell
enthusiasm. "I felt that my old clients, the Bells, had deceived me,"
Kushnick says.
So Kushnick quit, and started New Networks Institute, thinking, "I was
going to make a lot of money selling high-end research," he says. "But
I discovered that I was biting the hand that had fed me."
Collaborating with Probe Research, a Cedar Knolls, N.J., consulting
firm, Kushnick produced a report called Telephone Charges in America,
documenting a 275% increase in phone charges in the preceding decade. A
second collaboration, Consumer Attitudes Towards Telephone and Cable
Companies, a consumer survey that established the fact that people
didn't understand their long distance bill, may have led to Sprint's
"dime-lady" campaign.
Today, Kushnick is writing a book, The Unauthorized Biography of the
Baby Bells (for details, visit www.newnetworks.com). In it, he shows a
state-by-state pattern of Baby Bell promises in exchange for regulatory
relief, followed by broken promises, and increased profits, dividends
and stock prices.
The story of Bell Atlantic of New Jersey (BA-NJ) exemplifies the
pattern. In 1992, the New Jersey Board of Public Utilities granted BA-
NJ freedom from rate regulation "on all services deemed to be
competitive in nature" and a freeze on otherwise falling residential
POTS rates. In exchange, BA-NJ seems to have promised to spend $1.5
billion "above business as usual" to create a state-of-the-art fiber
optic network and broadband services. The program was named Opportunity
New Jersey (ONJ).
According to the New Jersey Office of the Ratepayer Advocate, "BA-NJ
has utterly failed to fulfill its obligations under the Plan." In a
March 21, 1997, document, the agency contrasts the $2.6 billion that
BA-NJ claims to have spent on network upgrades from 1993 through 1996
against the $2.4 billion it would have spent in "business as usual"
under the old, stricter regulations. In the same period, BA-NJ paid out
$477 million in excess dividends. Furthermore, the agency stated,
"there appears to be no intention to provide any broadband services
over [BA-NJ's] high-speed network."
Kushnick's book documents this pattern of abandoned promises and
unfulfilled quid pro quos in every Baby Bell territory. To nobody's
surprise, not one big-money telecom interest has stepped forward to
support his work. He's deep in personal debt. When I ask about his
credit cards, he just laughs. He's betting everything on his book. Once
again, Bruce Kushnick's mission has taken him to the edge.
(Note: Bell Atlantic representatives were understandably unhappy with
the way its performance under Opportunity New Jersey is depicted above.
A future Intelligence at the Edge column will delve into their side of
the story. - DSI.)
This article appeared in America's Network, 11/1/98.
http://www.americasnetwork.com/issues/98issues/981101/981101_edge.html
Copyright 1998 Advanstar Communications.
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YEAR 2000 REFLECTION:
"We are seeing more seizing on stories to support already
drawn conclusions: of progress suggesting the problem is solved,
or stories of severe effects of interconnectedness, indicating a
future of chaos and social disruption. Its important to be as
interested in information that disconfirms our bias as supports it.
This is a system, friends. Watch the tendency of emotions to lead
perceptions without further questioning. Not a good sign on
either side. We need to learn to weigh evidence, not shoot
half the messengers." by Doug Carmichael in Y2K Week #62,
(to subscribe -- highly recommended! -- contact doug@tmn.com)
A YEAR 2000 LEADING INDICATOR?
Just a couple of months ago I was at Home Depot looking at
five different models of gasoline-engine powered generators,
musing about whether I'd need one for Y2K. I went to Home
Depot again last night, and there was one generator in an
otherwise empty space. It was a beat-up looking demo model.
Underneath, where they kept the new "in-the-box" machines,
was more emptiness -- not a single generator in stock. (David I)
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CONFERENCES ON MY CALENDAR
+ November 2-6, 1998, Washington DC: Next Generation
Networks (NGN98). Produced by John McQuillan for the
Business Communications Review crowd. This is a
conference that takes itself very seriously so I will
leave my fool's hat at home and wear my business suit.
http://www.bcr.com/confer/ngn98/Default.htm
+ An Afternoon with George Gilder, December 10, 4-7 PM,
Stevens Institute of Technology, Hoboken NJ. Sponsored by
isen.com, inc., and the Advanced Telecommunications
Institute of Stevens Institute of Technology. We are
busting our butts to get the registration process going,
to get a web page, etc. Tell your friends, customers,
suppliers, employees, boss, enemies, to get the info by
sending email to robin@isen.com . . .
+ Solutions 99! -- Denton TX: Sponsored by University of
North Texas, Feb 9, 1999. Contact Mitch Land .
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COPYRIGHT NOTICE:
Redistribution of this document, or any part of it, is
permitted for non-commercial purposes, provided that
the two lines below are reproduced with it:
Copyright 1998 by David S. Isenberg
isen@isen.com -- http://www.isen.com/ -- 1-888-isen-com
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Date last modified: 5 Nov 98