Friday, May 04, 2007

Roasting AT&T's Whitacre

The editor in chief of Light Reading, one of the most arcanely technical sites on the web, takes time out to lambast Ed Whitacre. It's interesting precisely because it is so striking a departure from the site's normal tone and focus.

I saw what AT&T (nee SBC) did up in the Tri-Cities of Illinois and I watched Whitacre single-handedly create the net neutrality dustup that came back to bite AT&T so completely. If that were not enough, I still can't believe that AT&T, now the worlds largest Telecom, doesn't have the guts to go for the FTTH solution that even tiny Kaplan Telephone understands is necessary for it (and the community it serves') future. Whitacre has been enormously bad for his customers and their communities--I don't think that can be disputed.

But I had bought the idea that he was good--in a narrow, shortsighted, destructive sort of way, for the company and its short-term profit and shareholder returns.

Apparently not. In a letter addressed to Whitacre about his retirement package:
What kind of risks and innovation has SBC/AT&T taken recently? It's built a watered-down fiber-to-the-curb network that's dwarfed by many fiber projects worldwide. You are now the largest telecom incumbent operator on the planet, yet you're taking fewer risks than just about anybody. Less risk, higher pay. Not a bad deal if you can get it.

Perhaps the generous compensation package is in appreciation of all the fine lobbying efforts your team has conducted in Washington to preserve the incumbent footprint and defend yourself against innovation. If that is indeed the rationale for your pay package, then you deserve it. AT&T has shown true excellence in lobbying. Your team knows how to preserve the system.

Here's what I really think of this pay package: It's a farce. It's a symbol that the pure arrogance and imperial management style of incumbent telcos is here to say. It's proof that your company is focused more on maintaining the status quo and maximizing executive pay, than on innovation and the creation of shareholder value.
Click on over and get the gory details.


Anonymous said...

This is not a charity, this is a business that is only interested in return on investment. It doesn't matter what they sell as long as it makes a profit.
John, LUS (Charity)will loose money and Kaplan receives more USF dollars (Subsidies)that AT&T.

John said...

brave anonymous person says:

"This is not a charity, this is a business that is only interested in return on investment. It doesn't matter what they sell as long as it makes a profit."

Precisely. So? I suspect that you intend this as a stinging blow somehow. But nobody has ever argued otherwise. (Now, I'm not the sort of ideolog that considers raw greed admirable. But, hey that's me. No doubt an defect in my upbringing)

You also say:

"John, LUS (Charity)will loose money and Kaplan receives more USF dollars (Subsidies)that AT&T."

LUS has no intention of running a charity and hasn't so much as hinted at any such nonsense. It will cost real money to use the network. Obviously. There is no free component. I'll bet you know that.

Kaplan surely does NOT receive more Universal Service Fund money than AT&T. You might, if you thought a little longer, build a case for Kaplan receiving more as a % of its income. (Though I'd like to see the figures.) If so that would be natural. Kaplan is 100% rural and the USF fund, though horribly misused to satisfy the greed of giants like AT&T is INTENDED for rural communities. I don't see where you have a valid point. If you are trying to imply that local Kaplan is somehow more dependent on the Feds than giant AT&T you are ignoring the enormous effective subsidies for the long-haul business that USF works to partially offset. You're also pretending that AT&T does not benefit in ways that Kaplan never can from things like the Federal restriction on direct connects to the internet backbone that radically restricts the potential of new competitors.

AT&T was born as a monopoly and has never willingly shed or tried to shed its favored status. I cannot fathom pseudo-capitalists that favor its bureaucratic greed over real locally owned and run businesses...

Anonymous said...

sounds like you're from CUBA!!!


John said...

Cuba? The little island to the south with the cigars? You're joking, right?

Surely thinking Kaplan Telephone is a more admirable business than AT&T is not "communistic."

Gotta get with it Rick, Accusing folks of being communists is soooo 20th century. You need to get the new playbook. The current senseless way to accuse people of being unpatriotic is to mumble something about terrorists.

Just for the record, there is absolutely nothing unamerican about thinking AT&T is a greedy, monopolistic, federally-favored bureaucracy that has nothing to do with real businesses.