Hell's Bells: A Radio History of the Telephone; No. 8

I mean, they had that kind of power, they could literally go out and buy up every single person who could conceivably come in and testify against. I think what's really at issue is that the phone companies are seeing the arena in which they're offering the service shrinking again. And from a policy perspective, divestiture and new reconfigurations of the cable and telephone industry, newspapers, tronic publishing and looking at the prospects of decided to continue with the breakup of some of these regional holding companies. My God, this is an exciting industry. Hell's Bells: A radio history of the telephone. Media philosopher Marshall McLuhan once remarked, We shape our tools and

then our tools shape us when thinking about how the future of telecommunications might affect us. It's useful to look back at the people who shaped the system in the first place and the values they built into the system for 12 years. A Michael Knowles of the Annenberg School for Communications at the University of Southern California was a researcher at Bell Labs. The culture that I saw in my many years at Bell Labs and at AT&T that I always saw there that impressed me was on the part of most employees and honest concern for the public and honest concern that they were an essential service business. If there were a storm or some disaster that knocked out four phone service, everybody was there pitching in to try to get it back. If there were a strike on the part of labor, then everybody in a management team was there pitching in to keep that service going into the strike could be resolved. There was always this concern about public service.

People have talked about it and have sort of smiled and cynically and said, well, really might not have been there. No, it really was there. And at Bell Laboratories, in terms of our research, we're always trying to open up new frontiers which were relevant to communication, trying to invent new technologies that would allow service to be delivered better at a cheaper cost. That was always in the front of our minds and in the front of our minds of our management. And it was honest. It wasn't just public relations before. They were interested in giving extremely good service because they were regulated by the PUC and the FCC and they would not get rate increases if they had X number of customer complaints about services. Dan Goldin is a former Bell employee who saw an opportunity in the AT&T divestiture and left to form his own competing interconnect company in San Diego. The Bell system only hired one out of 500 applicants. I was one of 500 applicants hired in 1969 because I was I volunteered for the draft in 1967.

I worked in the signal corporate United States Army, which really meant I did nothing for almost two years. And when I got out, I was in charge of showing training films, but I got wage credits and I had a job instantly waiting for me at the Bell system. They they started me at entry level, gave me some wage credits, and I came from a structured environment into an environment where the colors of the trucks were the same color, olive drab. They didn't put racing stripes on the vans until a racing stripe fad ended in 1970, I think 77. So, you know, it took them that long to figure out World War Two was over. So we had, you know, camouflage vehicles cleared through the early 70s. For me to make the transition for the United States Army to the Bell system was no problem. I even asked my supervisor where the paint was to, you know, if we had to if we scratched your truck, we'd have to paint it. And how often did I have to wash the truck and take care of it? And I'm sure he thought this guy's going to get along here just fine, you know, because I was used to a highly regulated, highly structured environment. The other side of this culture is a culture of conservative, is very conservative, longer term thinking in terms of technologies

and that sense of mission that they had. Um, the other thing I've noticed in terms of culture at AT&T is a belief in central direction, not in marketplace, a belief that somebody at the top should know better what people want rather than relying on the marketplace to vote. There was almost a sense that that was just too chaotic, could lead to horrible mistakes. So the culture of conservatism and a culture of central direction, not believing in marketplace, almost communistic in a way, you might say, in terms of that centralization and central authority and not believing in the marketplace. Now, for today, it's a question of to what sense does that culture still exist today? AT&T claims its market responsive and things of this variety. Yes, they are better.

But I wonder, since the same many of the same people are still there, how quickly can that type of thinking change? The same thing is true of the phone companies who are for many years subject to that culture, both sides of it. The commitment to service and the conservative type of thinking know how would the phone companies exist if they were allowed into these new areas, manufacturing a new information age services, would they really invent them? Would they be innovative enough that they look to the marketplace and try to understand, you know, the culture of the phone company as people, men and women who are promoted for their profitability? How profitable can they get? How much profit? Can they give the stockholders this is what they live by in the past, it was a mix of the profit we can give to the stockholders versus the service that we can give so that we can get our rate increases through the PUC. So they are a great service at the Bell system. Other companies gave was forced because that they had a lot of complaints their rate increases would be denied upon deregulation of the Bell system.

The only force out there now is profitability. So and the term profitability is being used and used and used and used. And the term service and the term dedication to service has gotten to be a secondary term. A lot of the people there do believe in that, and they try their best to give it and at the expense of getting in trouble with managers who think nothing about profitability. I was one such employee. I was called in and given management warning for going out at 3:00 a.m. the repair a fire department's phone system, because they didn't have a 24 hour maintenance contract. And they called me at home and I circumvented the entire dispatch network. And I went out on my own and I fixed their phone system. I was almost fired for that. I think what's really at issue is that the phone companies are seeing the arena in which they're offering a service shrinking. Audrey Krauss is director of Turn toward Utility Rate Normalization, originally founded by consumer activist Sylvia Siegel. Turn has been over the years, Pacific Bells most vocal critic. And they're not recognizing that they still offer a very important, essential

service and that their job is to do that well. And instead they're trying to branch out into all of this other stuff that they may or may not be able to do as well or as competitively or as cheaply as somebody else. I'm Ernie Sanchez. I'm head of the Communications Law Practice Group for Baker and McKenzie in Washington, D.C.. Telecommunications as a legal field used to be a relatively small field practiced by a few a few persons in rather significant seclusion. And now any kind of telecommunications issue before the FCC has an enormous a vast number of different kinds of participants, people advocating different points of view, an enormous number of small and medium companies that have an interest in the most arcane kinds of issues, arcane to the average person, but but very important to the people in the industry. Portability of phone numbers, architecture

of various kinds of telecommunication services, regulation of rates. There's just a vast amount of of tiny details that now have a magnified importance. By far, the biggest and most well oiled public image and public policy machine is to be found among the descendants of the old Bell system. Former FCC Commissioner Nicholas Johnson recalls how the old AT&T monopoly had the political muscle to do pretty much whatever it wanted. The Bell telephone system has taken pride in bringing you this program in a series of shows dealing with size and the enormity of the economic and political and legal power they brought to bear. Oftentimes, I think is is hard for us today to to imagine. But there was one rape case where the story was told that they showed up in Washington with literally a freight car boxcar full

of paper, and then they just sort of challenge the staff to go through it and and find anything wrong. I mean, they had that capacity to just kind of overwhelm the FCC. There was a rape case in Michigan where it turned out there was no one that the that the utility commission in Michigan could get to come testify because every single potential witness who was trained as an economist and knew anything about the business was on the payroll of Michigan Bell. I mean, they had that kind of power. They could literally go out and buy up every single person who could conceivably come in and testify against them. Well, the telephone companies are masters at it. They have people in every community. They have people that go to city council meetings, board of supervisors meetings. They encourage in in some cases, expect their managers to participate in local civic organizations to be active in local

charities. They're out there promoting what good guys they are. They contribute generously to campaigns for elections at all levels. They go out of their way to present themselves as this, quote, good corporate citizen at the same time. In another arena, they're out there screwing their customers, essentially in whatever way they can. It's it's part it's an unfortunate part of our political process that because these are wealthy, influential corporations, they have influence over our community leaders. And we see it not only with elected and appointed officials, but we see Pacific Bell going out in courting, courting grassroots community leaders, inviting them to discussion sessions periodically to present their points of view, informing them

in a very one sided way of the benefits of what they plan to do and not really giving them an opportunity to explore the drawbacks. We're very concerned about it. We've seen in in public hearings around the state, community leaders who have obviously been coached by their their the managers from Pacific Bell or other utilities coming forward at public hearings and supporting phone company applications and clearly not well informed about the implications of what the phone companies are asking for their constituencies in the 21st century. Telephone lines will unlock the knowledge that will help us learn, keep us well and set us free. When Pacific Bell managers meet with grassroots community groups, they bring along and exquisitely produced little video drama titled First Born Relax, like all good advertising, it resonates with the

values and desires of the intended audience without openly saying so. The videotape skillfully weaves the Latino passion for family, together with Pacific Bell's own struggle to give birth to its next generation of telephony, a future in which families gather in their living rooms before giant wall sized video systems to tearfully behold their new progeny. Welcome to the program. In Sweden, Pacific Telesis would like to develop this kind of technology today to get you ready for tomorrow. Yes, it's only a telephone now, but the 21st century is just a few years away. You see them dangling in front of the public, a vision, a vision of video, telephones, a vision, a video on demand delivered over optical fiber to every home, a vision of people working at home, a vision of broadband entertainment delivered over

facilities owned by the phone company. All right. So now you say, is this a realistic vision? Is this something new or not? And the answer is no. This is an old vision that's been around for decades. And when a vision has been around for decades and it hasn't moved much in that direction, you start to wonder that perhaps this is the wrong vision. As I've said before, vision is not reinventing the mistakes of the past. Vision is not duplicating what's been thought about, looked at over many decades before. Vision is something truly new, something that has not been thought of. A whole new direction, something innovative and vision and thinking of the future is very hard to do, is very difficult. I mean, they would spread a lot of advertising around in newspapers and magazines so that in the same way that women's magazines historically have done very little to warn women about the the greatest

cancer risk to women, which is lung cancer, from smoking cigarets because they're taking advertising money from cigaret companies in the same way you very seldom will read much. That's critical of the telephone companies in the newspapers that are running these full page ads paid for by the telephone companies. So they have they have that kind of power as well. Another example of how they do this was with the caller I.D. proceeding that came before the commission a while ago, where it was strongly in the interest of the telephone companies to demonstrate some support for their services. They wanted to introduce it among representatives of battered women's shelters. Well, the California Alliance Against Domestic Violence, which represented scores of battered women's shelters in this state, opposed the application for permission to introduce caller ID and submitted very moving testimony about the potential dangers,

the life threatening dangers to battered women of their battering spouses being able to track them down through caller ID. One shelter in California spoke in favor of caller ID as being proposed by Pacific. That shelter had a Pacific Bell manager on its board of directors and was the recipient of corporate contributions from Pacific Bell. So yes, we still are dealing with companies that either singly or together are capable of not just hiring one of these enormous corporate law firms, but multiple enormous corporate law firms and run up legal fees in the millions higher multiple lobbying firms, public relations firms, whatever. And that's a kind of power that most of us who

raise money for our civic activities through bake sales are not used to dealing with. So I worry about these phone companies. I worry about these regional holding companies. I worry about these seven so-called baby bells in terms of vision. I don't think they understand the term yet. I don't I think they're just simply maybe deliberately dangling something from the past, hoping that the public and others won't realize what it is that the laundry is old, that something from the past it hasn't been cleaned up, is not sparkling new. And by dangling that vision, I think they're hoping that somehow the Congress and the politicians and others will free them from constraints so that they're free to go into whatever new businesses they wish to go into. I personally like the idea of a little government intervention is possible. I'm sort of sympathetic to the idea that everybody should be in control of their own destiny and that these phone companies, if they so desire, should be allowed to go into

whatever new businesses they'd like to go into. The issue then becomes, however, who's going to pay for these new businesses? They're going to go into that. They want to start making licorice flavored milk and packaging it and selling it fine. But don't use the profits from the regulated phone business to do that. Don't use the profits from the monopoly business. To subsidize these new ventures that they're going to go into and people are worried that that subsidization will occur, if not directly, then simply that since the regional company owns the local phone company that the profits of the local phone company accrue to the holding company. The holding company will then use those profits to make licorice flavored milk, which would probably be a big market disaster. There's been in general in our society, a tendency to to embrace new technology and new ideas and not really look

carefully and critically at all the implications. But just to sort of assume that anything that's part of our growing industrialization and technological revolution has got to be OK. I don't think that that's the case. And I think a lot of consumers are increasingly aware that that's not the case. One can think of these technologies as being sort of two sided or two faced. UC Berkeley sociology professor Claude Fisher is author of the book America Calling a Social History of the Telephone to 1940. One is the technology in the hands of the particular user is a tool for him or her to use to facilitate whatever goals, lifestyles, cultural tastes they have. So with regard to the telephone. One way to think about it is how the individual uses it to keep in touch with family and friends, or perhaps to conduct business or perhaps to organize a social life or chooses not to.

But another way to think about these technologies is not individual user by individual user, but to think about the technology as a sort of omnipresent part of our environment. And in the case of the telephone, you start to realize that we have here a device which is in the homes of 95 percent or so of all Americans, and that its existence is part of the taken for granted of our daily life. Everything from the assumption schools have that if the child is sick, there will be a telephone in the child's home and they can call a parent to pick up the child. The assumption on a job application form that you have a telephone and if you're going to get the job, the employer will call you the assumption among various merchandizers and stores that if you have questions about products or something, prices, that you will call them up. And you see the evolution in our society in terms of

the telephone numbers put on business letterheads, the telephone numbers that are requested and all sorts of official forms, the way in which the telephone becomes taken for granted. And that then becomes part of the social structure part, you might say, the constraints where the individual no longer in that sense has as much free choice. If the society is built around the assumption that everybody is reachable by telephone, then to buck that assumption is to pay a high cost. To be somebody in the society without a telephone is to pay a price in terms of access to resources and access to people so that in some sense, at some stage, you no longer have much of a choice about whether to have telephone or not. The same thing might be said, for instance, about automobiles. When a city such as a lot of the cities in Southwest grow under the assumption that everybody's got an automobile and they have terrible public transit systems, it makes it incumbent upon people to have an automobile.

So in that sense, the technology is from the point of view of any any individual, a tool they use. But it also is an environment where you become perhaps compelled to use the technology because the society around you is built on the assumption that everybody has the technology. Hello. Hello. Hi. No, I would say at least one lesson of the early history for today is that in the early stages of a new technological development, there are a variety of uses that are imagined, uses that are promulgated, uses that are promoted by the marketers for these devices. And it takes a while for the use of the technology to shake out. And I think what happens when this shakes out is that you see people adapting these technologies to the kinds of cultural patterns and lifestyle preferences that they've usually had.

And my hunch would be that with all these cellular phones, multimedia, optic fiber, fiber optic connections, computer television, telephone syllogisms and all the other things that you read. That many of these things will fall by the wayside and it'll be some what I would think, relatively simple and straightforward uses that will be profitable 10, 20 years from now. And it's unlikely that that we will see a plethora of many different kinds of uses. Very few people except the wonks among us, and maybe I'm one of them, is going to have all of these technologies and be engaged in using them all the time, both computer bulletin board services and home shopping and and do your own videotape editing on your computers. Very few people will do that. I think you'll get a relatively simple and straightforward uses that will seem mundane.

I would suspect, given the magazine Slick magazine stories we see of today while we have Greg, because we have this is wonderful technology called the telephone. The wonderful technology of this network, this two way switch network allows you and me to send signals, voice signals, facsimile signals and data signals to anybody, anywhere in the world that's available to us 24 hours a day. And it's always their national disaster. Power lines go down. The telephone service seems to continue. I mean, is there so wonderful technology? It's 100 years old. We take it for granted. When people start thinking of new technologies, you're never going to hear them mention the telephone. It is not well understood. It's not well studied. It's not well looked at by the academic research community who wants to study the telephone. But it's the major, major technology of the information age. Is the network, the switched to way network? That's the major technology. It's the the ability to pick up a track called travel

agent, an airline to arrange a hotel to get a car rental to the call, to check your supplier to see what the goods haven't arrived yet to place in order to call for medical help to reach 911 in an emergency. The ability to call a friend because you're feeling kind of sad and need somebody to talk to for an hour or two. It's that wonderful technology that's there, the ability of a physician to take a copy of an X-ray and send it to a colleague on the other coast. They can discuss what this means. It's an industry with revenues of over one hundred and fifty billion dollars a year. The single largest component, the communication industry, is the telecommunications, the telephone data industry. Yet look at all the glamor that goes to film and TV and being a radio announcer, something of that variety. And yet the telephone industry that's the largest component of the communications industry, swamps all the others. If if they are and they all came back today and they saw where their vision went, they saw the excitement of that technology, cellular telephones. They reachable virtually any place you go.

People are talking today about universal phone number that no matter where you are, the network knows where you are and find the closest phone to ring pagers. All this technology today and how it's being used, it's a wonder and an industry that is high technology industry, an industry that continues to grow in terms of network usage and extremely profitable industry for most of the players. I mean, where do you find yet is an industry that's mature? So we have a mature industry with ever increasing growth and with very, very good profits. What's that equal, I say that's success, it's a great success this day and age of not being very happy with certain segments of industry in the United States, we have a segment that is an extreme success, and that's that telecommunications segment. And from a policy perspective, with divestiture and new reconfigurations of the cable and telephone industry and newspapers and electronic publishing and looking at the prospects

that the saga of divestiture might continue with the breakup of some of these regional holding companies. My God, this is an exciting industry. This is not a stagnant industry, is not a boring industry. New players, new reconfigurations will be occurring far into the future. Things aren't stagnant. They know once again with his history. Tell us what history tells us is stagnation and no change occurs rarely and usually change. So much see more coming. It's not over yet if it's never over. Hell's Bells, a radio history of the telephone was written and produced by Gregg McVicar of Pacific Multimedia with research by Tom Read and original theme music by Larry Council. The project director was Leo Lee.

Funding was provided by the Telecommunications Education Trust, established by the California Public Utilities Commission to order audiocassettes or written transcripts of the series. Send us a fax at five one zero nine three eight twenty eight fifty. And thanks for listening. This is Western Public Radio.