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News: Analysis & Commentary: TELECOMMUNICATIONS


Competition may not improve the Baby Bells' uneven service

Joe Turk still hasn't forgiven Ameritech Corp., his local phone company. Last fall, a lightning storm knocked out Turk's telephone in West Allis, a Milwaukee suburb--and more than a week went by before service was restored. Being out of touch was especially worrisome for the retired 63-year-old maintenance supervisor because of his heart condition. Now he can't wait to ditch Ameritech for another local telephone company. "No questions asked, I'm gone," he says. "Whoever it is--regardless of the cost--I'm switching."

Turk and thousands of disgruntled consumers like him are presenting a daunting problem for the Baby Bells. Deregulation will force local telephone companies to slash prices in order to keep a hold on their once captive customers. But at the same time, the companies can't neglect service. And there are disturbing signs that most of the Baby Bells are already coming up short.

TAKING IT ON THE CHIN. In Wisconsin, for example, complaints to regulators against Ameritech nearly doubled last year. Service complaints are also up at U S West, Nynex, and Pacific Telesis Group. And with customers griping, the Bells are taking it on the chin from state regulators. In January, New York's Public Service Commission ordered Nynex Corp. to rebate $50 million to 5 million consumers. Idaho is fining U S West Inc. for taking too long to fix telephone outages. And in February, Wisconsin's Public Service Commission filed a civil suit against Ameritech over low-quality and unreliable service. "They just haven't been up to our standards," says Scot Cullen, administrator of the Wisconsin commission's telecommunications division.

The most common gripes? Long waits to repair problems, install new phones, or reach a live person in the service center. In Westport, Calif., for example, Albert J. Miller's phone went out for 16 days after a December storm. He spent four frustrating days driving five miles into town to use a pay phone, only to get busy signals or be disconnected, before he was finally able to tell someone at PacTel about his problem. The whole incident left the patent lawyer angry and disgusted. "It was a comedy of misinformation and disinterest on the part of Pacific Bell," Miller says.

At his Seattle-based truck-leasing company, Robert Pontius has been waiting five months for U S West to install a second line. As a result, he has had trouble communicating with customers and employees in the field. "There should be a choice," he fumes.

Regulators say these are far from isolated cases. For routine repairs, Wisconsin wants Ameritech to restore service to consumers within 24 hours 95% of the time. Last August, the rate fell to 40%. U S West is doing even worse, fixing problems in 24 hours only 30% of the time in Minnesota.

What has caused service to slip is no mystery. Customers are rushing to add new lines for home offices and fax machines, taxing many Bells' installation capabilities. The companies are also struggling to handle huge increases in the number of phone lines in use. Yet at the same time, the Baby Bells are laying off thousands of workers to cut costs. U S West, for example, has trimmed its workforce by 4,400 since 1993. "There have been cases where people cut too fast and damaged their reputations," admits Randall K. Strahan, vice-president for service operations at Pacific Bell.

GONE FOREVER. The Baby Bells know they have a serious problem--one that could lead to massive customer defections. "We can't tolerate [poor service]," says Richard C. Notebaert, chairman and chief executive of Ameritech. "We have to be responsive." Some of the phone companies already claim to be getting better. For example, industry insiders say U S West neglected its phone business as it rushed into more exciting ventures such as cable TV. But now the company is building up its network capacity and hiring more employees for customer service. "We have to provide better service than anyone else," said Thomas Bystrzycki, executive vice-president for operations and technology.

Still, some experts suggest that gold-plated service, which phone customers took for granted back in the era of local monopolies, is gone forever--and people had just better get used to it. "We don't need seven-day-a-week, 24-hour-a-day customer repair service," says Dan Miller, chairman of the Illinois Commerce Commission. So Joe Turk and other disgruntled customers may be in for a nasty surprise. Tomorrow's competitive local telephone rates are unlikely to come with yesterday's red-carpet service.By Peter Elstrom in Chicago, with Peter Burrows in San FranciscoReturn to top

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