You've Come a Long Way, Baby
The chorus of praise hasn't stopped since the announcement that SBC will merge with AT&T. The storyline is attractive: Baby Bell grows up, buys parent; $15 billion in synergy; local and long distance back together; a new day for telephony. Alexander Graham Bell would be so proud, mostly because he'd recognize a lot of the equipment from 1875, especially the copper wires going into homes. Get real. This deal is about freezing the "phone" business, after winding back the clock to 1983 (or is it 1883?)
Bells are milking us for $20 a month for a service that's worth pennies, but already there are a few leaks in this huge price umbrella. With broadband, people are canceling second lines that were used for dialup. Primary lines are shut off in favor of cell phones. No wonder SBC's sales have been dropping. Buying AT&T will merely slow SBC's swirling descent. With the stroke of a pen, prices might still collapse on plain old telephone service. Watch out below.
In this day and age, there shouldn't even be a "phone" business. Communications is 20 years into a digitalization process, and the Bells don't like it one bit. Real competition actually works. Judge Greene divided Ma Bell geographically back in 1984, and competitive long-distance rates dropped 95% in 20 years. So why haven't local rates?
The incumbents have used every trick to avoid the competition a digital world brings: legal delays, bullying, lobbyists, fat dividends to keep stock up, and promises not to raise rates before elections. Whatever it takes. But they're almost out of options. Dig deep enough and you'll see that SBC's fate hangs on the thread of a carefully worded section of the Orwellian-named Telecommunications Reform Act of 1996.
Congress was duped by Reed Hundt into thinking they were getting real competition. The '96 Act insisted that regional Bells should share their lines with others, and voila, competition! Not so. Tucked in the legalese were pages of gobbledygook on how to set prices to share these copper wires -- a formula known as TELRIC, or total element long-range incremental cost. Rather than use historic costs that, with depreciation, would likely be close to zero, TELRIC is a fuzzy future cost. It's pie in the sky -- the hypothetical cost of stringing new phone lines today.
But that's like figuring the price of getting to Europe using the hypothetical cost of digging a tunnel under the Atlantic, instead of computing airfare. It gives Bells a license to steal. Only a fool would string copper phone lines today -- you'd run fiber capable of gigabit speeds -- yet copper is how we determine prices. A phone call is just 16K of data bandwidth. The math is easy. Based on current gigabit fiber line monthly fees, the value of phone service is 1.6 cents per month. That's it. Amazingly, SBC charges $18-$22 per month and complains that's below their costs! (By the way, that's what AT&T does for businesses today -- runs data lines of fiber to bypass SBC and lower corporate phone costs.)
Current line-sharing costs are not just slightly off, they're on a different planet. So how does SBC, Verizon, Bellsouth or Quest transition from phone-company to data-company? They don't. They pray TELRIC is written in stone.
The telcos whine to legislators that prices should be high to incent them to string new lines. That's bogus. Intel invests billions in R&D for new microprocessors specifically because prices of today's parts are dropping. Cisco just spent $500 million on their new terabit router because prices of their old routers have dropped. If they didn't invest, they'd be dead. It's just the opposite for SBC. It's the prospect of lower prices that stimulates investment, not higher prices, yet our telecom policy is exactly backwards. We need a Telecom Act of 2006.
Competition is here just itching to grow. Voice over Internet Protocol works over broadband and allows unlimited local/long-distance dialing for $30 a month. But almost half of those fees go to Bells like SBC to interconnect to their antiquated phone network, so it's not real competition. For the same reason, cellphone plans (which SBC and Verizon control) cost us twice what they should. Even cable modem service would be half-price without TELRIC. Because of nonsensical accounting, it's one of those "prices are high because prices are high" things.
Cool stuff is coming. Fiber is being strung away from the telcos. A mesh network of wireless transmitters on old telephone poles will offer cheap data plans with -- gasp! -- free phone calls. Burned badly, the stock market will pay for all this only if it sees a truly competitive market. SBC stock and the entire telecom market has been dead money for years. Buying AT&T only props up the corpse a little longer.
Mr. Kessler is the author, most recently, of "Running Money" (HarperBusiness, 2004).
小贝尔公司真的长大了么？
自从西南贝尔(SBC)与美国电话电报公司(AT&T)合并的消息宣布以来，外界异口同声的称赞声就不绝于耳。这个故事的确有其吸引人之处：小贝尔长大了，收购了母公司；150亿美元的协同效应；本地和长途业务相互支持。亚力山大?格雷厄姆?贝尔(Alexander Graham Bell)如若在世，必将能非常自豪地认出西南贝尔沿用自1875年的众多设备，特别是接入千家万户的铜质电话线。言归正传，这宗交易事实上让“电话”业务时光倒流回到了1983年（抑或1883年）。
小贝尔公司现在每月向我们收取20美元的服务费，实际成本仅为几美分，还好这个庞大的价格伞下早已出现了一些漏洞。有了宽带后，很多家庭取消了原先用于拨号上网的第二根电话线。手机得到广泛应用后，有些人连第一根电话现也关了。无怪乎西南贝尔的销售额一直在下降。收购AT&T充其量，只能减缓西南贝尔下降的速度。纯粹的传统电话服务价格眨眼间就可能大跌。不信，且听我道来。
在当今这个时代，甚至都不该有“电话”业务。通信数字化已发展了20年，但小贝尔公司压根儿就不喜欢这股趋势。竞争机制已经建立。1984年，格林(Greene)法官将Ma Bell按地区进行分拆，长途电话市场引入竞争后20年内价格下降了95%。那么，为什么本地电话话费不下调呢？
小贝尔公司竭尽所能阻止数字化世界可能带来的竞争，手段包括法律延迟、威胁、游说、以丰厚派息支持股价以及承诺在大选前不上调话费等等，但现在它们几乎已江郎才尽。只要稍加研究，你就会发现，西南贝尔的话费系于措辞严谨的1996年《美国电信法案》。
美国国会被雷德?哈德特(Reed Hundt)蒙蔽，认为这个行业已有了实实在在的竞争。96年电信法案要求小贝尔公司向竞争对手开放线路，以此鼓励竞争。但事实并非如此。费解的法律条文没有规定的是如何制定线路的开放价格，小贝尔公司的全要素长期增量成本(total element long-range incremental cost, 简称TELRIC)方案没有采用折旧后、可能接近零的历史成本，而是用了模糊的未来成本──当前铺设新电话线的虚拟成本。
这就好像在测算从美国到欧洲的交通成本时，弃现成的飞机票价格不用，而采用在大西洋底挖掘一条隧道的虚拟成本。这给了小贝尔公司可乘之机。今天在光纤传输速度可以达到10亿比特时，只有傻瓜才会新铺设铜质电话线。一对电话通话只占用16K数据带宽，接下来的算术很简单。根据目前传输速度10亿比特的光纤月费，电话服务的价值每月才1.6美分。真实情况就是这样。但令人惊奇的是西南贝尔还在每月收费18-22美元，并抱怨入不敷出！（顺便说一句，AT&T如今有一项业务就是铺设绕过西南贝尔的光纤数据线，降低企业电话成本。）
目前的线路共享成本绝非可以忽略不计。因此，西南贝尔、Verizon、南贝尔(Bellsouth)和Quest怎么会舍得从电话公司转型为数据公司呢？恐怕心底里它们还是在祈祷让TELRIC成为万古不变的法则！
电信公司向国会抱怨说只有保持话费高价，才能鼓励它们架设新的线路。这是胡扯！英特尔(Intel)投资几十亿美元研发新的微处理器，原因是当前的部件价格在不断下跌。思科系统(Cisco)花费5亿美元开发新的太拉路由器，原因是老路由器的价格下跌。如果它们不投资研发新技术，它们就会被淘汰。这与西南贝尔的情况恰恰相反，刺激这些公司投资的正是价格的下跌，而不是上涨，但我们的电信政策太过时了。我们需要一部2006年的电信法案。
市场竞争的加剧将不可抑制。借助宽带的互联网语音传输协议(VOIP)技术，提供每月30美元无限制的本地／长途通话计划。但这笔花费大约有一半会进入西南贝尔等小贝尔公司的口袋，用于接入它们陈旧的电话网络的费用，因此并没有实实在在的竞争。同样原因，（西南贝尔和Verizon控制的）手机计划也让我们付出了比实际高出一倍的费用。如果没有TELRIC，有线宽频调制解调器的服务费也应下调一半。
先进技术正在得到应用。光纤将成为电信公司的主要网络。在传统电话杆上安装无线传输器构成的密集网络，将提供廉价的数据计划以及免费的电话通话服务。如果没有真正具有竞争力的市场，终有一天股市将为此付出沉重代价。西南贝尔的股票以及整个电信行业的股票已多年不产生投资回报，现在收购AT&T充其量也只能让这种半死不活的状态持续的时间稍微再长一些。
编者按：本文作者安迪?凯斯勒(Andy Kessler)最近出版的新书名为《Running Money》(HarperBusiness, 2004)。
