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Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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December 27, 2005

Memo to Soros

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Posted by Dana Blankenhorn

george%20soros.jpgGeorge Soros (left) has emerged as one of the primary boogeymen of the Right Wing. Not only do the Warbloggers invoke his name in order to justify their continuing to wear Vast Leftwing Conspiracy tinfoil hats, but so do corporate conservatives, who resent his interference in their feeding at the Republican trough, and the scare he helped put into them during 2004.

But in fact Soros has been quiet since Kerry lost. Very quiet. Too quiet. On the whole he's gone back to doing what he did before, make money arbitraging currencies and commodities. This is a noble profession that dates back to the days of George Peabody. (Maybe you heard of the man Peabody left in charge of his enterprises. Junius Morgan. No? How about Junius' son, the one he named for the preacher, J.P.? Getting warmer?)

Anyway, George may be looking for a good, cheap way to turn America into a new, more profitable direction, and here's one right here. Fund TeleTruth.

zack%20exley.jpgI don't just mean write Bruce Kushnick a fat check. I mean build the kind of lobbying effort around TeleTruth's exposes of the Bell companies that Kushnick has always dreamt of.

What if Bruce had, say, Zack Exley on his payroll? Exley built's online effort, and before that was a great pain-in-the-ass to GWbush -- dot org. Great online rabble-rouser, Zack is. Would look good in a suit. Might enjoy eating well, staying at nice hotels, while doing something really important, namely giving Sam Simon something to worry about.

Simon spends millions of dollars of Bell money per year dominating American politics, driving up your telecommunication bills, and keeping the future from your doorstep. Ever hear of New Millenium Research Council, Innovation Alliance, USIIA, Keep USF Fair Coalition, Alliance For Public Technology (APT), the FCC's "consumer advisor council"? Simon has also used Bell money to corrupt some supposedly pro-consumer groups as the Gray Panthers, American Association of People with Disabilities (AAPD), Black Leadership Forum, and League of United Latin American Citizens (LULAC) turning them into Bell mouthpieces.

Pry these groups away from the dark side (at least on telecomm issues), pushback politically against the Bells on all fronts, and you'll be doing something big for technology. You'll be making innovation legal again. You'll be creating competition again. You'll be building opportunity again.

And the whole budget for that would be chickenfeed for a guy like you, George.

How about it?

Comments (5) + TrackBacks (0) | Category: Business Strategy | Digital Divide | Internet | Investment | Journalism | Politics | Telecommunications | law


1. Brad Hutchings on December 27, 2005 11:11 PM writes...

This is a real winner Dana. Let's see, if I decided to bundle my phone, TV, and broadband with SBC, I could get unlimited long distance, DSL, DirectTV and all the regular phone features for about $160/month. 15 years ago, when I was in college, my phone bill was typically about $150/month in 1990 dollars. And I didn't have Caller ID at the time, because in California, the same cranks who now want to reregulate the Bells now were arguing that Caller ID availability to the unwashed masses would make it impossible for young women to call rape crisis lines.

Seriously, if my balls were so big that I thought I could run the Bells better or in a more customer friendly manner (through regulation or otherwise), I'd sell them to a billy goat. I honestly hope the Democrat Party doesn't make this issue its big one for 2006, as there will be no pressure on the Republicans to do anything constructive.

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2. Jesse Kopelman on December 29, 2005 03:45 PM writes...

Brad, don't you think the decline in pricing of phone service is more a result of competition than any largess of the phone companies? 20 years ago getting competition in that industry required government action (the Bell breakup) coupled with deregulation. The current situation in telecom is starting to approach what we had pre-breakup. It is not farfetched to think that government action may be required again, at some point in the not oo distant future.

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3. Brad Hutchings on December 29, 2005 06:23 PM writes...

No Jesse. I do not think that decline of pricing and improvement of services are results of either "competition" (in the way Dana means, which is "direct") or phone company largess. They are a result of changing dynamics that have introduced all kinds of unexpected indirect competition to the POTS network. In 1990, people uniformly paid from about 10 to 20 cents per minute for "long distance" calls, a productization that could only have arisen from the regulated telecom market. With off-peak wireless minutes, VOIP, e-mail, Skype, IM, and plenty of other new technologies that circumvented this pricing and value system, a large segment today pays $25 - $35 for unlimited high quality dialed voice connections. Unless you're a shut-in or have no friends outside your county, these plans are must-have. The only time per-minute charges come into play for these customers is when calling countries that have old style telecom regulation (aka the rest of the world).

The Bells have had to respond to phenomena like my parents not having a long distance company and using their cell phone for outgoing out of area calls. The cell phone may be fine for my Dad. When he calls me, I just call him back using my unlimited long distance on my land line. Like ants finding the cookie you left on the counter, people will find the right trade-offs between price and quality and companies will have to compete in the total landscape (not just with their "direct competitors" to survive. No government action required.

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4. Jesse Kopelman on December 30, 2005 05:37 PM writes...

Without direct government intervention, that competition from cell phones you point to would not exist, nor would Skype or Vonage for that matter. Before the Bell breakup, the government's plan was to just give all the cellular spectrum to AT&T. AT&T didn't think cellular was particularly viable and would not have made much effort to deploy it. There probably never would have been PCS. Back in those days, the prediction for US cellular use by the year 2000 was only one million people. Without the government decision to arbitrarily make internet access different from tv or phone, even though it could use those same wires, the only way to get online right now would be to using dialup or pay your RBOC $150/month for 128 kbps DSL or $1,500/month for a T1. I doubt many people would have anything other than dialup and thus VoIP would be a non-issue for consumers. So, explain to me again how no government action was required to get your phone bill lower?

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5. Bruce Kushnick on January 1, 2006 11:11 PM writes...

Brad Hutching wrote:
> Let's see, if I decided to bundle my phone, TV, >and broadband with SBC, I could get unlimited >long distance, DSL, DirectTV and all the regular >phone features for about $160/month.
And let's see, by 2006 you should have had a 45 Mbps service in your house... you paid about $2000 for the service you never received from SBC-Pac Bell-Ameritech.

In fact the average local phone bill and long distance bill only goes down if you're a very heavy user and don't want competitive services.

After doing surveys of phone bills in 2004, CA, NJ, NY, the average customers are spend about 100%-300% more for the same service --- Depending on the city. If you were spending $150 it means you were a heavy user, and not average.

So what if the Bell companies are cross-subsidizing their other services, such as DSL, an inferior copper-based service, or their entry into long distance. --- through higher local phone rates.

When you realize that only 11% of the network has not been written off, that employees-per-line is down 65%, construction down 60% since 1984 as compared to revenue, which increased 128%, my local bill --Prices should have dropped. They haven't. My Local service is currently $50 bucks, it should be $20.

In fact, bundles cost 15-25% of households more because they weren't heavy users but were pushed onto them. --- The advertised price is never what the customer pays -- the extra fees add 35% more.

Yes, LD was always articially inflated then declined, but the reason is that the Bell companies could use the local access fees, which accounted for 40+% of the cost, to enter foreign lands and lose $25 billion since 2000.

Phone bills don't lie, and what was also a continuing decline in pricing has shifted because of the various bogus taxes and surcharges, many of which go back to the local phone company as revenue, like the FCC Line charge, which is expected to go up to $10 a line in 2006.

And while VOIP offers some relief -- the bells, using fake consumer groups, want to add Universal Service, other taxes and surcharges... raise USF.

Jesse wrote:
>Unless you're a shut-in or have no friends >outside your county, these plans are must-have.

Sorry to disappoint by the entire population must be friendless. The average customer, and I'm taking based on 1000 phone bills, just wants to be left alone and are NOT aggressive about what we care passionately about.

Case in point -- in 2003, Teletruth help a class action suit where 40% of the customers in Verizon NJ were missing their discounts.... you would think a few hundred-thousand companies would notice....

Phone bills are unreadable and the plans to most people are indecipherable... and I don' blame the customer but the companies and the FCC for this.

And about the future... FIOS is a closed in system that top speed is only 30 mpbs is asymmetrical and cost $199 in Korea and Japan you get 100 mbps, bi-directional for $30-50 bucks....

And you think that we've been well served by these guys? We're 16th in the world, and going nowhere quickly.

The time has come to examine the record and look for alternatives for bringing in the next generation of services. it ain't the Bells. They had their chance and blew it.

And I agree with Dana.... there needs to be a group to hold these companies accountable. I've been the kid with the finger in the dike... waiting for the repair crews.

Bruce Kushnick, Teletruth

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