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If AT&T Had Managed the Phone Business Like Google

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Re: If AT&T Had Managed the Phone Business Like Google

#21

Post by drvdevd »

paxys wrote: post #17

I don't think people realize just how expensive and congested these networks were back in the day. Phone calls cost what they did because capacity was a real constraint. It's not that they were all ethical businessmen doing a public service as the article makes them out to be (some old business tactics of AT&T, Standard Oil, American Tobacco etc. would make the most ruthless big tech exec of today blush). They simply…

I do often think of smartphones as being an extended, new age version of the payphone and I guess after reading this - the ATT equipment. Since you don't really own the device it is very similar in a sense. It feels like the same model with the capacity just shifted around...

Re: If AT&T Had Managed the Phone Business Like Google

#22

Post by saurik »

mngnt wrote: post #16
pkulak wrote: post #6

I really thought it would be more subtle than that. Google sells its phones, charges for it's phone plan (market rates on both) and certainly doesn't advertise during calls. Google uses advertising to pay for services with near-zero marginal cost. That's a pretty new phenomenon, so it's not surprising that AT&T never thought to give away ad-supported hardware to use on it's limited capacity, circuit-switched network.

I think AT&T and telephone business are a bad analogy, exactly because Google kind of is involved in the telephone business and does not apply these stratagems there. For me the point of the article is the strategy Mr. Google uses currently in other fields: They offer you a product for free, a product way better that other (even paid) offerings, to capture the market and to collect data and serve ads inside those pro…

> I think AT&T and telephone business are a bad analogy, exactly because Google kind of is involved in the telephone business and does not apply these stratagems there.

Users didn't come to expect it, and contrary to the Silicon Valley playbook, it turns out that you actually can charge nearly 100% of people and they will pay you: you don't have to give it away for free to have penetration. To me this is more of a hypothetical on "what if a company like Google (specifically the Google of now) invented phones instead of AT&T?".

Re: If AT&T Had Managed the Phone Business Like Google

#23

Post by Jensson »

Every search engine uses ads to monetize itself. A search engine you paid for wouldn't get enough users to pay for itself, since the cost of indexing the internet is huge. Youtube is the same deal, there are more ads when watching cable TV you paid for than watching youtube. You can't say that Google made the ad situation worse there either. So Google isn't pushing ads into new areas, Google is just running a normal business and applying the normal ways to monetize the areas it operates in. It just so happens that they are the biggest web business around and on the web you monetize with ads, but they weren't the ones starting that trend.

Re: If AT&T Had Managed the Phone Business Like Google

#24

Post by Jensson »

saurik wrote: post #22
mngnt wrote: post #16

Earlier quoted context omitted.

I think AT&T and telephone business are a bad analogy, exactly because Google kind of is involved in the telephone business and does not apply these stratagems there. For me the point of the article is the strategy Mr. Google uses currently in other fields: They offer you a product for free, a product way better that other (even paid) offerings, to capture the market and to collect data and serve ads inside those pro…

> I think AT&T and telephone business are a bad analogy, exactly because Google kind of is involved in the telephone business and does not apply these stratagems there. Users didn't come to expect it, and contrary to the Silicon Valley playbook, it turns out that you actually can charge nearly 100% of people and they will pay you: you don't have to give it away for free to have penetration. To me this is more of a hy…

You can charge for a killer feature everyone wants when you have no competitors who can offer it for free.

And you might have noticed that even today nobody uses services which puts ads into private communications. People are willing to pay the tiny amount required to skip those ads.

And from cable TV we know that every service where people can tolerate ads will contains ads sooner or later even when people pay money for it.

Re: If AT&T Had Managed the Phone Business Like Google

#25

Post by Jensson »

vortico wrote: post #15

This is the best story I've read all week. More non-techy people should at least know how Google, Apple, Facebook, and Microsoft work (i.e. their business models), and this is a start to put it in perspective for people who don't normally care about these things.

People know that companies shows them ads to make money, do you really think they are that stupid?

Re: If AT&T Had Managed the Phone Business Like Google

#26

Post by yftsui »

paxys wrote: post #17

I don't think people realize just how expensive and congested these networks were back in the day. Phone calls cost what they did because capacity was a real constraint. It's not that they were all ethical businessmen doing a public service as the article makes them out to be (some old business tactics of AT&T, Standard Oil, American Tobacco etc. would make the most ruthless big tech exec of today blush). They simply…

Fiber is the most amazing invention from last century. Want to see what it was like in the 00s? Visit Yellowstone and stay inside for a night, during busy hours even phone calls are prioritized.

Re: If AT&T Had Managed the Phone Business Like Google

#27

Post by zw123456 »

Maybe some people don't remember or is was before their time, but for many many years, you could not actually own your own phone. You had to lease your phone from the phone company. It was not until the Carter Phone decision that paved the way and forced the phone company (Bell Telephone / AT&T, not Today's AT&T) to allow someone to attach their own device to the Phone companies lines. The Carter phone was one of the earliest modems and it was not even electrically connected to the wires it was acoustically coupled. But really they just did not want people using their network that way. The network design was based on a average holding time of 2 minutes per call, but once people started using it to transmit data between computers and people or between computers, the holding times went through the roof forcing them to spend a lot of capital to keep up with the demand. Maybe the analogy is more similar to wireless carriers that lock their phones ?

I am not sure there are any exact analogies here to Google or anyone else. The phone company was, prior to 1984, considered a natural monopoly and was given special exception from antitrust laws. Google is in no way considered a natural monopoly, although some could argue that the DoJ looks the other way just a little bit when it comes to some of the Tech giants, I will leave that argument to others to hash out. But in no way are they sanctioned to the degree that the Telephone companies were in the early days in my view.

Re: If AT&T Had Managed the Phone Business Like Google

#29

Post by ridaj »

paxys wrote: post #17

I don't think people realize just how expensive and congested these networks were back in the day. Phone calls cost what they did because capacity was a real constraint. It's not that they were all ethical businessmen doing a public service as the article makes them out to be (some old business tactics of AT&T, Standard Oil, American Tobacco etc. would make the most ruthless big tech exec of today blush). They simply…

I believe AT&T long subsidized its local operations with revenue from long distance operations. This took advantage of businesses' higher willingness to pay for long-distance in order to subsidize local access networks (as opposed to reinvesting all the long distance profits into more long distance capacity). It stopped not just because of capacity increases but because the govt created the incentive for competition in long distance, and imposed a ramp-down of the local access subsidy. When ISPs allowed ordinary people to finally communicate with the world without paying huge rates, AT&T successor companies fought hard in the 90s for Internet dialup to be treated like "interstate calls" because they made more money on them that way. If we were living in AT&T's internet, we'd pay more to access the websites that are far away, not because it costs more, but because business customers are willing to pay enough for it that it makes it more profitable than giving it for less to consumers.
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