If AT&T Had Managed the Phone Business Like Google

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...

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.

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.

It seemed like it was a few months after the government broke up the telephone monopoly; prices dropped dramitatcilly.

I know this on a personal level.

I had a crazy friend in college who thought BHT (the preservative) could cure AIDS.

His phone bill was $350-500/month. He would call researchers around the country, even Dr. Fauci. (Fauci actually listened to him once, until he found out he didn't have any credentials.) He once called France to speak with a researcher at work, over Rock Hudson's treatment. The small business owner came in steaming. He said, "Who called France. The call cost me $500.00!"

Everyone was complaining about long distance charges.

It literally seemed like in was a few months after the breakup, and long distance calls were dirt cheap.

(It might have been longer than months, but it felt that way. It was then I realized the important antitrust laws, and how monopolies need to be slapped down.)

> how expensive and congested these networks were back in the day.

And the reason for that is that basically you needed a wire connecting from one phone to another: https://en.wikipedia.org/wiki/Circuit_switching

On the way to modern day digital packet switching (where you just send the bits for millions of connections down massive capacity pipes) there was multiplexing, etc. but it was a long and hard road.

100%.

I recently read "Software Engineering at Google" https://www.amazon.com/Software-Engineering-Google-Lessons-P..., and my take away was that engineering culture matters a lot to drive any success and innovation. Those who work there have the freedom to challenge anything, to steer the product, and as a result, find opportunities as described in the previous comment and fix it. The management works on shaping that innovation.

There is a graveyard in most Telecom company. ATT bought ad tech business AppNexus and media giant WarnerMedia back in 2018 (stone age of the internet) and didn't manage to operate it well, it's not the only one, Verizon has heavily in ad tech and media companies such as Yahoo!, but none of these companies brought the same internet culture shifting in the market as Google/FB/.. etc. We all love to hate social media companies, but these companies managed to tap into the opportunities presented and -arguably- didn't stop innovating.

I think the reference is to gmail, where Google famously placed ads based on the email's content and not search.

I think the core of the analogy is solid, that both AT&T and Google are monopoly providers of communications infrastructure - with divergent growth paths and business models.

To me the spoof does a good job of outlining how google's model is inherently somewhat predatory, and is that way precisely because it grew by starting out free.

It's intriguing to consider that the important public service of searching for services and products (which is most of Google's revenue) could be financed in a more transparent and straightforward way.

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 products. This doesn´t apply to Android so much, but take Gmail, Google Maps, Search, YouTube. All these services are ostensibly given away for free (like AT&T phones in the article), but have their performance compromised by ads everywhere plus they siphon the user data like a vacuum.

So to paraphrase your criticism: Google doesn´t sell its maps, but pushes the paid listing with larger map icons. Google doesn´t sell its search, but gives adverts when you´d expect the honest best result for your query. Google doesn´t sell the videos (barring the paid offerings), but prepends and interrupts them with ads.

This article just applies these tactics to something we are so familiar with - the phone service.

>>services with near-zero marginal cost

I might be loking at this from the point of view of current, digital, automated and interconnected networks, but the way I see it, a phone network has near-zero marginal costs, too. Once you have built the network, your marginal cost per-call are quite low. I´d say comparable to relaying an email or replying to a search query once the infrastructure is in place.

> It kind of ruined it for me to have suggestions like this that were totally impractical with 1920s technology.

This text is not about what could or couldn't be done 100 years ago. It is about today.

This is all true, except for the user data part. If Google were a billboard company that tried hard to get people to look at its billboard, that's fine. If they're constantly observing by scanning emails, calendars, browsing and location data that's another.

One of the competitive dynamics of phone books was that businesses were essentially extorted to buy advertising in any phone book whose publisher had the scale to give everyone in your town a copy.

If you didn't buy advertising in every one of N phone books, you lost roughly 1/N sales for each book you failed to advertise in.

More than one empire was built by introducing new phonebook after phonebook to town after town. Despite none of the towns needing another phonebook.

So it may be a bittersweet situation that Google's lock on search at least saves businesses from having to advertise in 20 search engines. Although given Google advertising is an auction, maybe there are no savings.

Fun?! When it came up two weeks ago I felt like it was making me more ignorant. Here's what I wrote at https://news.ycombinator.com/item?id=28473805 :

This makes no sense. It's like the author has zero knowledge of the relevant history, including things I learned in high school American history.

Don't read it unless you want to get dumber.

At the very least, here's some of the missing real-world context.

The Mann–Elkins Act made the telephone system a common carrier in 1910, fully 11 years before this scenario. You couldn't legally "have their legal permission" for this practice.

100 years ago would have been part of the trust-busting of Taft and Wilson, at the end of the Progressive Era. AT&T had to do business bearing that in mind - something Google doesn't have to do now.

More specifically, AT&T and the US government even had an out-of-court agreement concerning possible monopoly behavior - the Kingsbury Commitment - that ended with the Willis Graham Act of 1921 which said the ICC could regulate AT&T as a natural monopoly. Google doesn't face that now.

> "PRESIDENT: [Clearly alarmed] Monitor every call? Are you joking?"

One operator per phone call = very expensive. Ads won't pay for that.

There wasn't the automation ability to play those recorded advertisement. As it was, a vast army of switchboard operators was needed just to make the system work.

> "we give out the number of another beauty salon instead"

They wouldn't be surprised. That's exactly what happened. That's supposedly the reason for creating an early automatic telephone exchange. https://en.wikipedia.org/wiki/Strowger_switch The quote attributed to him is: "No longer will my competitor steal all my business just because his wife is a BELL operator."

> "You will bankrupt all of these businesses. .. That’s why we cap it at 25%."

AT&T knew how to extract a profit. Quoting https://www.cybertelecom.org/notes/att.htm

] "Having secured its monopoly position, AT&T engaged in the 1880s in a series of rate hikes under the justification of expanding the service. The public faced with no alternative service responded negatively. Responses included establishing legal authority to regulate the rates (See Common Carriage) and also the establishment of municipal networks."

Had AT&T taken this hypothetical Google advice, the public would have responded even more strongly.

> "Well, we already have a word for that. It’s called bribery, Mr. Google"

Are you kidding me? They would have said "It's called lobbying, not pax."

The 1920s C-suite would have had no qualms with the idea of lobbying in the interests of corporate power.

The WP entry for "Lobbying in the United States" even includes a political cartoon from 1889, titled "The Bosses of the Senate" - https://en.wikipedia.org/wiki/Lobbying_in_the_United_States#... , linking to https://commons.wikimedia.org/wiki/File:The_Bosses_of_the_Se... .

> We divested our telegraph business ages ago.

WHAT!? They didn't leave the telegraph business until 1991. Here's a copy of their press release. http://www.baudot.net/docs/att--exits-telegraph-biz.pdf .

A phone book is literally an alphabetically sorted key-value table. Several tables usually, the secondary one is just on businesses and those might be sorted by a third column of 'type' first.

Indexes for phone books also existed, I forget if they used to be notched in the side like better dictionaries.

You need just some millions to your name and to contact their sales people. But to protect themselves it will be sold in a way that makes it useful to you and still have plausible deniability. Like Facebook letting you advertise to users that liked or saw something, instead of just straight telling you who they are, though it is trivial to do so with some tracking on the website.

FWIW I pay for YouTube Premium and it's so worth it. No skipping ads.

I wish Google would do that with everything. Allow me to see zero ads by paying.

There's a bit of irony here, considering the "you too" model allows people to pay a monthly fee to skip the ads.

Maybe the AT&T those guys could teach something to these young'uns today.

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

Larry Page has been rumored to be chilling on his own personal island at this point like a movie supervillain.

Note that while Brin and Page are no longer accountable to anyone and don't speak up because they're "retired", as Google's controlling shareholders, they're still completely in charge of Google.