Category Archives: AT&T

MBAs are lousy CEOs

Fortune magazine, in its December 1st edition, has published an intriguing article titled Google’s Larry Page: The most ambitious CEO in the universe.  It quotes a Google manager who’s worked with both Apple’s Steve Jobs and Google’s Larry Page:

Fadell, who before founding Nest led the development of the iPod and iPhone at Apple, says Page and Jobs approached innovation in radically different ways. “Steve was a marketer who really loved product and got the user-experience details right,” Fadell says.  “Larry is a serious technologist and someone who is really steeped in science and in theory, and he has a real love of product.”

Larry Page and Jeff Bezos
Larry Page and Jeff Bezos

I relate to Page’s approach, but Jobs’ obsession with user interface certainly also led to revolutionary products. Note that neither leader was an MBA or lawyer.  Jeff Bezos, an ace programmer (not an MBA), is taking Amazon where no retailer has gone before.

Steve Ballmer and Randall Stephenson
Steve Ballmer and Randall Stephenson

In contrast, Microsoft was led into near irrelevance by Steve Ballmer, a sales manager with an MBA.  The entity that calls itself AT&T is busy making enemies of its customers everyone under the leadership of MBA Randall Stephenson.  (This genius caused his employer to lose six billion dollars, yet took home 21 million dollars that year.) General Motors’ CEO Roger Smith (MBA) drove GM to produce millions of lemons which nobody wanted, leading to their chapter 11 bankruptcy.

For the moment, Google is in good hands. The jury’s still out (see Apple’s Software Quality Problems) on Apple’s Tim Cook (MBA). Even Microsoft may be headed in the right direction, now that Satya Nadella is CEO. True, he has an MBA degree, but he’s reputed to be a product guy — not a numbers guy.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695


President Obama endorses net neutrality

Yesterday, Reuters reported a piece of good news: Obama pressures FCC for strong net neutrality rules. They quote from Mr. Obama’s speech:

Simply put: No service should be stuck in a ‘slow lane’ because it does not pay a fee. That kind of gate keeping would undermine the level playing field essential to the Internet’s growth.

I’m puzzled. If Mr. Obama favors net neutrality, why did he appoint cable TV and cellular phone industry lobbyist Tom Wheeler as FCC chairman last year? In May, predictably, FCC Chairman Wheeler Proposes Net Partiality, which he couched in terms of “net neutrality”. Curiouser and curiouser.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Who wants a fragmented Internet?

Brazil, Russia, and China are the headliners. There are others. Each resides behind a controlled gateway. Some countries are tired of US hegemony.

In addition, the Mormon Church wants its own version of the Internet. Comcast, Verizon, AT&T, and Time-Warner Cable want to create Internet tiers. (Cable TV is built on a fragmented model.)

If all these parties slice and dice the Internet, it will be unrecognizable. And less useful.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Which service providers encrypt your data?

The EFF has moved its “Who has your back?” report. It’s now at The report explains,

We’ve asked the companies in our Who Has Your Back Program what they are doing to bolster encryption in light of the NSA’s unlawful surveillance of your communications. As of now, eight companies—Dropbox, Facebook, Google, Microsoft,, SpiderOak, Twitter,and Yahoo—are implementing five out of five of our best practices for encryption.

Graphic by Electronic Frontier Foundation

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Vacuum tubes’ magic, 1940

It’s hard to believe, but I remember when vacuum tubes were viable circuit elements. Yes, I’m that old. At about age 13, I began repairing and constructing vacuum tube circuits in 1959. Transistor prices fell rapidly and quickly replaced vacuum tubes in low power, low speed applications. Tubes remained viable in high frequency applications above 100 Watts through the 1970s. Transistors and integrated circuits pushed out vacuum tubes everywhere else.


High power transmitting tubes glowed magically. 250TH and 304TH plates lit up with dull orange to bright yellow colors as a function of plate current. 4-1000 plates glowed cherry red to pumpkin orange. Mercury vapor rectifier tubes such as 866s and 872s lit up their trapped vapors with a beautiful blue glow.

This Western Electric film from 1940 takes us through their vacuum tube manufacturing processes. They include a surprising number of skilled hand labor operations. Note how many women performed these delicate tasks.

Seven years after this film’s release, John Bardeen, Walter Brattain, and William Shockley co-invented the transistor. Today even 50 kilowatt transmitters are entirely solid-state.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Cell providers’ fat profits

Colin Berkshire just published an excellent article about the fat profits that are enjoyed by U.S. cellular phone service providers. His cost estimates seem reasonable, yet they amount to only two percent of revenue. He asks, US Currency Federal Reserve

So where does all of the money go?

He replies,

The only answer I can come up with as I pour through their financials is that the cell phone business is so poorly managed that there may as well not be any management. Large bureaucracy, corporate palace headquarters buildings, lots and lots and lots of executives, and a broken business model are what you are really paying for.

Colin’s summary:

Because Verizon and AT&T are essentially an oligopoly (often matching each others’ prices and structures nearly perfectly) there is little competition, no need for efficiency, and no need to build lots of pesky towers.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Exploding the phone

I’ve been reading a fascinating new book titled Exploding the Phone, by Phil Lapsley. It tells the stories of the guys (they were all males) who explored the Bell telephone system and unraveled many of its mysteries from about 1950 until the late 1970s. They became known as “phone freaks”, or just “phreaks”. Yes, they could place toll calls for free, but most of them were motivated by curiosity, not profit.

Exploding the Phone book coverThe Achilles heel of the original Bell long lines system was that it used in-band signalling between switching centers . . . and Bell, in uncoordinated fragments, published specs on the signalling tones that commanded their switches. This “security through obscurity” is a recipe for system abuse.

One of the young phone explorers — Joe Engressia — was blind from birth. The phone was his friend. He learned to whistle in unison with the signaling tones he heard as the telephone system set up and knocked down telephone circuits. Author Lapsley tells the telephonic biography of Joe and how he was eventually hired by Mountain Bell to troubleshoot their system — all by ear.

The book is loaded with mini-bios of other phreaks, including the infamous Cap’n Crunch, John Draper. One of John’s tricks resulted in remotely listening to phone conversations of the FBI’s field office in San Francisco. It also helped put him in prison.

What brought phreaking to an end? Bell replaced its in-band signalling with out of band signalling, a few phreaks served prison time, and this new tech toy called the microprocessor appeared. Eventually phone phreaks either quit or migrated to computer hacking.

Exploding the Phone tells their tales. It reflects five years of research: its last chapter is filled with references. I give it two big thumbs up.


Audio interviews with the author:

Phil’s excellent website:

Colin Berkshire discusses blue boxes from inside AT&T.

CTIA’s stolen cellphone blacklist

A stolen smartphone can fetch $200 to $300, so smartphone theft remains a problem. CTIA’s website includes tips on how to deter smartphone thefts.

CTIA logoThe CTIA (Cellular Telecommunications Industry Association) announced in November that it had integrated its stolen cellphone database with similar international databases. A recent Verge article describes the importance of the overseas stolen cellphone market and the controversy that surrounds a built-in “kill switch” for smartphones.

The CTIA insists that its new improved cellphone blacklist will make “kill switches” unnecessary. We’ll see what happens to the market value of stolen phones.

Kingsbury Commitment, 1913

Today is the 100th anniversary of the Bell telephone system’s regulated monopoly.

Bell System 1900 logo
Bell System logo in 1900

Until December 1913, the Bell system, under the leadership of Theodore Vail, had aggressively absorbed smaller independent telephone companies. It refused to grant competing phone companies access to its growing network, which crushed small would-be competitors. It had also acquired Western Union, which controlled the telegraph industry. Bell dominated both the domestic telegraph and the domestic telephone markets.

In 1913, the U.S. federal government was considering nationalizing the growing Bell phone system (Britain had nationalized its phone system in 1912) or breaking up Bell’s monopoly. Clearly, the government would take antitrust action of some sort, so AT&T negotiated with the Justice Department. On December 19, 1913, AT&T Vice President Nathan Kingsbury sent a letter to the Attorney General in which AT&T agreed “to divest itself of Western Union, to provide long distance services to independent exchanges under certain conditions, and to refrain from acquisitions if the Interstate Commerce Commission objected.” (Wikipedia)

1913’s Kingsbury Commitment allowed AT&T to operate as a monopoly until Judge Greene broke them up in 1984. They had a good run.

Inside Bell during its 1984 breakup

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Wiretapping for Fun and Profit


ABC News reports on wiretapping by the NSA of telephone conversations of Americans overseas:

Faulk says he and others in his section of the NSA facility at Fort Gordon routinely shared salacious or tantalizing phone calls that had been intercepted, alerting office mates to certain time codes of “cuts” that were available on each operator’s computer.

“Hey, check this out,” Faulk says he would be told, “there’s good phone sex or there’s some pillow talk, pull up this call, it’s really funny, go check it out. It would be some colonel making pillow talk and we would say, ‘Wow, this was crazy’,” Faulk told ABC News.


AT&T charges the federal government a $325 “activation fee” for each wiretap followed by a daily maintenance fee of $10.00. Verizon charges $775 for the first month of monitoring, followed by $500 for each additional month.

Parody: Gizmodo Original "Hope" Artist: Shepard Fairey
Parody: Gizmodo
Original “Hope” Artist: Shepard Fairey

These companies, rather than refusing to comply with unconstitutional orders, turn a profit on compliance.

Your tax dollars at work, violating your fourth amendment right to freedom from unreasonable search, while feeding the corporatocracy.

What’s taking so long to fire and indict intelligence chief James Clapper for lying to Congress about this during sworn testimony?

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

A tale of two AT&Ts

Colin Berkshire’s excellent three-part article titled A Brief History of AT&T begins by asking

How did it happen that the AT&T network became so poor, their prices so high, and how did the company become one so universally despised?

Within his article’s three parts (part 1, part 2, part 3) he explains,

The reason that AT&T service sucks is the same reason that Microsoft missed being the next Google, and why they missed the smartphone market and the tablet market and every other market this decade. It’s the same reason that HP has failed. It is the “MBA Manager Syndrome” of managers that don’t know their business and whose main skill is finance and politics.

450px-At&tPhoneSeeming vs Being

To begin with, the entity that calls itself AT&T is not your father’s American Telephone and Telegraph. It’s Southwestern Bell, renamed SBC for a while and merged with BellSouth, which in 2005 decided that the “AT&T” moniker had more je ne sais quoi than “SBC”. It’s headquartered in Dallas and is populated with corporate parasites: public relations people, lawyers, MBAs, and union workers. It is not a technical leader.

Lose $6B for your employer.
Take home $21 million.

Randall Stephenson, CEO of AT&T, at the 2008 World Economic Forum. photo: Robert Scoble
Randall Stephenson, CEO of AT&T, at the 2008 World Economic Forum. photo: Robert Scoble
All of their lawyers and all of their MBAs goofed in 2011 when AT&T’s attempt to buy T-Mobile was blocked by the Department of Justice’s Antitrust Division. As a result, AT&T had to pay $4 billion in compensatory fees to T-Mobile and lost another $2 billion in associated costs. In most corporations such losses would result in an overhaul of management, if not its board of directors. Not at AT&T ( Southwestern Bell). Its CEO not only kept his job, he took home $21 million last year. Nice work if you can get it.

I enjoy reading Mr. Berkshire’s articles. They reveal the inner workings and hidden mechanisms that only someone who’s worked within the Bell System would know.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Supreme Court helps AT&T wage war on its customers

I’ve learned that in 2011’s AT&T Mobility v. Concepcion decision, the U.S. Supreme Court allowed AT&T Mobility to place clauses in their contracts which force customers to settle disputes in private arbitration AND prevent customers from bringing class action lawsuits or even class arbitration against them. It sounds like the Supreme Court has joined forces with large corporations in their war on consumers.

CNET documented this in 2012: Why you can’t sue your wireless carrier in a class action. According to its author, Marguerite Reardon, “all four major wireless carriers in the U.S. include such arbitration-only clauses in their contracts”. How did we allow this to happen? Do you suppose that the carriers’ lobbyists (spending customers’ money) had something to do with it?

Will Carless wrote about this disgrace in May in Justice for Sale, Part Three: The War on Consumer Class Actions. He states,

By inserting “mandatory arbitration clauses” into their contracts, companies ranging from auto dealers to cell phone companies to health care providers have cut off their customers’ access to the courts, forcing them instead to settle disputes in private arbitration.

Welcome to The Machine. Welcome to 21st Century Corporatocracy.

Underground engine room. Metropolis (1927)
Underground engine room. Metropolis (1927)

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

2013’s Worst Company in America: EA

Electronic Arts (EA, a computer game publisher) has, two years in a row, been voted the worst company in America. I missed this contest a few months ago, but will place the 2014 edition voting on my calendar.

wcia_bracket_header_2013finalfinal-170wHere Are Your Contestants For The 2013 Worst Company In America. AT&T got knocked off by EA in the semifinals. How did EA do it? Did it win on arrogance, or out-point AT&T on poor service, declining product value, and rising prices? Is their management really worse than AT&T’s? Do their MBAs, lawyers, public relations, and sales people also outnumber their product people? Did their CEO’s misguided attempt to purchase a competitor result in a payout of $6 billion, yet he still kept his job and was even paid millions that year?

Better luck next year, ISPs

I see that Comcast made it to the finals. Let’s hope that more ISPs such as Comcast and AT&T make it to the final round in 2014. They certainly deserve it.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

The Failure of AT&T’s Advanced Communications System (ACS)

Today, it’s hard to find any information on AT&T’s failed packet-switched network of the late 1970s and early 1980s. AT&T’s History of Network Switching page doesn’t mention it. It’s one of the most costly engineering failures of all time, so it’s understandable that today’s AT&T (which is really a renamed Southwestern Bell) wants to forget about it. It was a project that was always just 90 days away from going on-line. In 1979, hopes were high:

The Advanced Communications System (ACS) is AT&T’s new, all-encompassing data service which will compete directly with SBS and XTEN. . . AT&T expects to have 137,000 ACS business customers by 1983.1

By 1981, hopes had dimmed slightly:

Although behind schedule, AT&T’s ACS (Advanced Communications System) should begin operation soon.2

800px-Boeing_307_in_Elliott_BaySometime thereafter, AT&T’s Advanced Communications System, brainchild of its vaunted Bell Labs, with over a thousand engineers aboard, sank beneath the surface, never to be mentioned again, like a malformed stepchild. They seem to have destroyed virtually all documentation of this disaster: no schematics, no mockups, no prototypes, no photos, no nothing. Apparently when you’re a monopoly, you can waste billions of dollars, and remain in business.

What happened?

I remember reading about this great new network in the late 1970s, and since its failure to appear, wondered what happened. Recently I found a description of this catastrophe. Colin Berkshire’s post-mortem report emphasizes the importance of good system architecture; patching of subsystems will never overcome poor system design. I’m surprised that design reviews at Bell Labs didn’t nip this dud in the bud.

Finally, here’s the story

And now, for your reading pleasure, learn how AT&T wasted over a billion dollars on their idea of a packet-switched network: How the Bell System Missed the Internet, by Colin Berkshire.


  1. Computer Technology: A Forecast For the Future, by William J. Kubitz, Associate Professor, Department of Computer Science, University of Illinois, Urbana-Champaign, published in 1979, page 148
  2. Computer-based national information systems: technology and public policy, by United States Congress’ Office of Technology Assessment, published in 1981, under “The Data Communication Industry” heading.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695

Inside Bell during its 1984 breakup

Colin Berkshire has written a fascinating article about the breakup of the Bell system. It’s titled Bell System Breakup and is in two parts:

Bell System 1900 logo
Bell System logo in 1900

He tells the story from the perspective of an insider, and adds insights that I’ve not found elsewhere. For example, did you know that AT&T’s Western Electric Company was lead contractor on NORAD, SAGE, Nike-Hercules, and Nike-Ajax command guidance systems, or that the world’s largest stockpile of binary biotoxins was kept just outside Boulder Colorado by the Western Electric Company?

Western Electric’s profits

Mr. Berkshire points out that the U.S. Department of Justice wanted to end the incestuous relationship between AT&T’s Western Electric subsidiary (manufacturer of telephone equipment) and its captive customers, the Bell operating companies. Why? AT&T kept its operating companies’ profits low to please the state public service commissions (which allowed them to maintain monopolies in exchange for low profits), while keeping its unregulated Western Electric profits high.

Teletype Model 43
Teletype Model 43

I remember seeing a system invoice from Western Electric to Southern Bell c 1979. One item was a Teletype Model 43 terminal, priced at 1400 dollars. (Western Electric owned Teletype.) I had recently purchased a new one for 800 dollars, so it was obvious that AT&T was moving profits from its regulated operating companies (e.g., Southern Bell) to its unregulated manufacturing subsidiary, Western Electric.

Mr. Berkshire tells a hilarious tale about AT&T’s defense against the DOJ’s prosecution. AT&T spent about 10 million dollars tying up 50,000 college economics professors with small grants to produce meaningless studies and reports, which prevented all of them from testifying against AT&T. You can’t fault AT&T for not thinking big.

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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695