Question

Case Study 3.2: AT&T The case of the BTC and its successor the American Telegraph and Telephone Company (AT&T) illustrates the business and policy issues associated with telephony service provision. Bell’s contributions as discussed in the Historical Note included perfecting the technologies necessary for transmission of voice using electrical wires. However, these by themselves were not enough to ensure the success of telephony service provision. Bell also created a company which in time would provide a universal telephony service to almost the entire North American market. The BTC (and its successor, AT&T) was greatly successful and grew to become one of the most valuable companies on the New York Stock Exchange. The success of the BTC was based initially on its utilization of Bell’s patented technology, licensing fees and ensuring competitors remained at a disadvantage. In the process BTC successfully defended its patents in courts over a period of some 20 years [1]. As it grew, BTC’s cost advantage allowed it to outperform and acquire competitors one after another: eventually becoming almost the sole provider of telephony services in the United States. Telegraphy and telephony were nascent industries: BTC established an R&D entity, and equipment manufacturing subsidiaries to provide it with the necessary technologies and devices as well as leadership in the field. In particular, Bell Laboratories – the research arm of the company – was the place which attracted many of the brightest mathematicians and scientists of the day. These researchers discovered and formulated principles not only associated with telecommunications but also many other fields as diverse as astronomy and quantum physics. In time Bell Laboratories became a world leading research institute and home to seven Nobel Prize laureates as well many other prestigious award winners. By any measure BTC’s technological endeavor was a great success. BTC’s business dynamics were characterized by the high infrastructure roll-out cost, and network effects. It was soon realized that no market could afford to have more than one operator as it was inefficient to duplicate wiring, and difficult to connect circuits between two operators. This led to the establishment of monopoly operators in different geographic regions, who were then acquired one after another by BTC, resulting in a near-monopoly operation in North America. Indeed, a theory was developed by AT&T president Theodore Vail in 1907, that the telephone, ‘by nature of its technology, would operate most efficiently as a monopoly providing universal service’ [10]. This monopoly control of the market was in conflict with anti-trust laws of the United States, and therefore BTC had to negotiate with the US government to allow it to run a monopoly business despite existing strong anti-trust laws. Over the years several anti-trust suits were launched but BTC continued to operate successfully for over 100 years. Despite all its advantages, BTC–AT&T fell into decline in the mid-1980s and was finally acquired by competitors, a fall which can be attributed to all three technological, business and policy factors. First, on the policy side, monopoly operation and lack of competition may have had a role in AT&T’s reputation for inadequate customer service. In 1974 another anti-trust suit was launched by the US government which resulted in a settlement which broke the monopoly operation that BTC had enjoyed. The company was divided into seven regional telephone operators known as Baby Bells. An eighth company connected these regional companies as a long-distance operator under the name AT&T. While BTC–AT&T had remained successful from the technological and business viewpoints, it had failed to stay with the policy shift and adjust accordingly. AT&T continued to operate profitably as a long-distance operator, carrying calls between regional Baby Bell telephone companies, and later as a mobile telephone operator. However, technological developments in whose development AT&T had played a prominent role led to its own demise. Bell Laboratories had been one of the major contributors to the development of optical fibre systems. These cables have very large capacities and can carry a very large number of simultaneous telephone calls. With the deployment of optical fibre cables in place of copper cables, and the deregulation of operator business, the cost of long-distance telephony dropped, and AT&T's business as a long-distance operator suffered. Mobile telephony was the other technological development which Bell Laboratories had pioneered. The growth of mobile operators and the competitive pressures on AT&T mobile division, in addition to its dubious strategic moves into content provision, finally led to high debt burdens and eventual fall. In effect, the technological break-throughs pioneered by AT&T had been used by its competitors in a more effective way. The ‘AT&T’ brand however was still very valuable and the acquiring companies adopted the name. The policy–business–technology developments of the last decades in the 20th century transformed the industry landscape and led to emergence of new companies. It also signaled the end of arguably the most iconic telecommunications company. Many telephone operators went through the same experience as AT&T. The majority were government-owned, and many have stayed afloat after deregulation. The emergence of mobile and broadband telecommunications has created new revenue streams as the case of Australian operator Telstra demonstrated. Nevertheless, the dynamics of technology, business and policy have been in play in every market, and have been instrumental in the success or failure of operator companies.

Case Study Questions: How did AT&T manage the technology–business–policy framework?

Case Study Question: Why was AT&T broken up?

Answer 1

AT&T, ECOMP Policy Framework: Capturing Network Intelligence in Policies:

AT&T, ECOMP is accountable for the look, creation, and life-cycle management of virtualized network functions (VNFs). in a veryll|one amongst|one in every of} its goals is to try and do this in a versatile, dynamic, policy-driven manner – belongings users dynamically management ECOMP’s behavior while not dynamical the system package. ECOMP’s policy element permits North American countries to specific, interpret and assess policies, so pass them on to alternative ECOMP elements or network components for social control.

Policies manage numerous aspects of ECOMP’s behavior, including:

1.Service style example: constraints concerning wherever to put VNFs
2.VNF modification management example: however package rollouts ought to be scheduled across VNFs and what health checks ought to be performed to validate changes
3. Management of the behavior of ECOMP elements – e.g., however and once ECOMP ought to collect information, and the way long ECOMP ought to retain that information.

ECOMP’s policy framework consists of the subsequent modules:

Policy creation: Enables policies to be specified by services designers and network operators via computer program and arthropod genus
Policy evaluation: Evaluates/executes applicable policies reactively (response to a query) and proactively (evaluates a policy and triggers actions)
Policy call distribution: Distributes policy selections to be implemented in alternative ECOMP elements
Policy validation: Validates policies, designed to attenuate the danger of introducing unhealthy policies into the ECOMP platform
The policy framework empowers operators and designers to manage ECOMP’s behavior. However, the domain information captured in ECOMP policies is usually distributed across several network operators and engineers, creating it a challenge to collate. Machine learning involves the rescue here by serving to service suppliers mechanically learn policies. within the case of management loops, machine learning permits signatures and responses to be mechanically captured.

When the software-centric network effort began, we have a tendency to had already been adopting cloud technology, totally on IT or company applications. Cloud technology provided the power to manage numerous workloads of applications dynamically, including:

1.Creating Virtual Machines (VMs) on hardware in close to period of time
2.Assigning applications and workloads to VMs in close to period of time
3.Dynamically moving applications and dependent functions to totally different VMs across numerous locations
4.Dynamically dominant resources on the market to applications (CPU, memory, storage)

AT&T has outlined 3 key objectives across our network virtualization initiatives:
1.Improve cycle time
2. Open our network
3.Increase potency
Policy: Modifiable Rules, Assertions and/or Conditions to change period of time higher cognitive process on corrective actions and configuration changes within the software-centric network system.

AT&T BROKEN UP:

AT&T dominated the phone marketplace for most of the 20thcentury. the corporate was therefore massive, it had been forced to interrupt up into eight smaller corporations in 1984. Today, the majority of these corporations area unit yet again a part of AT&T, at the side of cellular carriers ad cable suppliers. Here's however the corporate grew therefore massive that the govt skint it up.

What prompted the breakup of AT&T:

Intent on remaining a government-sanctioned monopoly, AT&T had very little interest in commerce network access to various service suppliers. Challenges to AT&T’s protected standing intense within the Seventies, prompting the FCC to permit restricted competition in long-distance services. native service, however, remained out-of-bounds to competition. This regulative disconnect between native and long-distance line of work continues these days, despite technological advances that have rendered obsolete any purposeful distinction between the 2. The landmark settlement needed AT&T to divest its native operative corporations and limit its services to the long-distance market.

Competition in long-distance service has yielded dramatic shopper advantages within the type of lower costs and improved service quality. Average revenues per minute for interstate and international calls originating within the u. s. born from sixty-two cents per minute in 1983 to ten cents per minute in 2001. In several instances, line of work across state lines and even international borders prices but native toll calls at intervals one state.

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