Sunday, April 25, 2010

Ma and Baby Bells: a Retrospect


Few days ago, Wall Street Journal reported that CenturyTel is acquiring and merging with Qwest. You probably don’t  know who are CenturyTel and Qwest.  Well, you are not alone. 

When studying Electrical Engineering and Computer Sciences in college and graduate school, I did not have any idea how good old telephone networks work (nor did I care).  The first time I heard any level of technical details of it was in late 70’s when a Bell Labs department head and graduate school alumni came to the department to give a seminar about insights into the occasional overloads and meltdowns of the networks and clever solutions to circumvent them.

A year later I ended up joining Bell Labs and began to work on networking technologies.   Bell Labs was the research and development center of AT&T, the one-hundred-years-old holding company of what was commonly known as the Bell System whose name was synonymous with phone services.   Most people did not know nor care what the Ts’ stand for; the current business of the name clearly likes everyone to forget about that as well and treat it as an abstract brand name (ok, it means Telephone and Telegraph and A stands for American).  In any case, like many during the American Gilded Age of the late 19th century, AT&T had tremendous growth in its early years since founded in 1885 out of the original Alexander Bell’s Bell Telephone Company of 1877.  It enjoyed the legal protection of the famous telephone patents and resulting monopoly till 1894 when the patent rights expired.  However with the vision and leadership of Theodore Vail, AT&T developed the first national long distance network and choked off its competitions by refusing to interconnect their local services.  Faced with anti-trust moves, Theodore Vail convinced the government the merits of having one centrally controlled network and universal services and managed to get AT&T’s monopoly formalized in 1913’s Kingsbury Commitment.  The concession of this first divestiture for AT&T was divesting of Western Union and agreeing to interconnecting local carrier’s networks (but not in between different carriers!).  Interestingly, only few decades earlier, Western Union was the most powerful telegraph company of the land who passed up the opportunity to buy Alexander Bell’s patents for $100,000 because they believed that telephone was nothing more than a passing novelty.   

AT&T/Bell System’s dominance and monopoly would last for the next 70 years till the 1984 divestiture.  It wasn’t until 1934 when FCC was set up by the Congress to be the regulatory body for communications.  By the way, in case you did not know, Theodore Vail’s first cousin - Alfred Vail is believed to be the one who invented the commonly used form of Morse Code in telegraph and other applications today, although his collaborator Samuel Morse got more recognition.

As a regulated monopoly, AT&T/Bell System needed to get approval from FCC and state Public Utility Commissions for proposed rate change at the interstate, and state and local level respectively.  As a point of reference, the 1981 rate of return was set at 12.75% by FCC for all companies it regulated at including the interstate business of AT&T.  In fact, AT&T stock was considered in those days a prime example of “widow and orphan” stocks for its stability like public utilities and relatively low rate of return.  
At its peak days, AT&T had about 1 million employees and controlled 22 local Bell Operating Companies across the nation for local accesses, one long distance company (AT&T Long Line), an International Division (AT&T Intl).  It had a manufacturing arm (Western Electric) that makes equipment for its operating companies and others, and a R&D unit - Bell Labs - that does anything between basic research (and earning Nobel Prizes), design, development, testing, and engineering of products and services.  At early 80’s, there were about 20,000 employees at the Bell Labs.  Universal Service of telephony was the mandate of the land that guaranteed everyone in U.S. can have the basic telephone service at a fixed rate, made possible through a copper wire to every house which are then terminated with standard jacks and leased Western Electric phones installed by your friendly Bell System, regardless where you live or if you had any neighbor up or down or sideways.  

To give you a sense of what the visions of communications was like in a regulated monopoly world, just consider the fact that there was an ambitious multi-billion dollar attempt in mid to late 70’s to develop a “Universal Data Service” that would provide a conceptually equivalent  service for data terminals and computers.  Well, the idea was ahead of its time and eventually was abandoned.  Indeed something like it is available to people today which is called Internet with a completely different technology and architecture!

Not only did I not know what telephone network was when I joined, I did not know there were pending anti-trust lawsuits against AT&T brought by MCI as well as U.S. Justice Department in 1974.  What is interesting is the underlying technical-business dynamics with the MCI case (MCI later became the second largest long distance service provider in the nation for quite some time).  Basically some smart guys figured out how to cherry pick the highly profitable business services of Bell System’s by employing low cost microwave towers on large buildings/high rises to connect and move volume business customers’ data and voices traffic  through AT&T’s networks.   After years of litigations, MCI did win a judgment against A&T in 1981 and an agreement was reached between AT&T and Justice Department in 1982 to break up Bell System along the line of local services vs. practically everything.  Baby Bells were born and separated from Ma on January 1st, 1984.  American telecommunication industry entered a new era with an increasingly turbulent and exciting landscape. 

Twenty six years later, you may ask what happened to Ma and Baby Bells?  The 22 Bell Operating Companies were originally grouped geographically and held by 7 Regional Holding Companies, also known as Regional Bell Operating Companies (RBOCs).  You may recall and recognize some of the names because more than likely you had been served by at least one of them: Pacific Telesis, Bell South, Southwest Bell, Nynex (New York), Ameritech, US West, and Bell Atlantic.  Facilitated by the Telecommunications Act of 1996, Bell Atlantic, Nynex later merged in 1997 to become Verizon who acquired MCI in 2006.  Southwest Bell renamed SBC Communications and acquired Pacific Telesis in 1997, Ameritech in 1999, the Ma - AT&T, and renamed the new company AT&T in late 2005.  Early 2006, it acquired Bell South to complete its redraw plan.  The last lone baby - US West, whose territory included the less populated and lowest growth mountain and north western regions was bought by Qwest in 2000.  Of course, Qwest just made to the news and is being acquired by CenturyTel that got me started going down the memory lane and this blog to begin with.  Is it all clear now? 

Oh, forgot to mention what happened to Bell Labs.  Bellcore (Bell Communications Research) was created during 1984 divestiture with a small portion of Bell Labs engineers and researchers and assets to support the Baby Bells while Bell Labs itself and name followed Ma.  Bellcore was later renamed Telecordia Technologies and acquired by SAIC in 1997, a company that focuses on government business, and later was sold to private equities in 2004.  During the 1996 self-initiated trivestiture and spin-off of AT&T, roughly 80% of Bell Labs and the name went with Lucent Technologies, the new equipment and product company which was later acquired/merged by Alcatel, a French telecommunication company in 2006 to become today's Alcatel-Lucent.  By the way, the third piece of the trivestiture of 1996 was NCR, the computing/"cash register" business that AT&T acquired only 5 years earlier.  It is the only piece that remained largely in-tact till today.

You may also ask why all the fuss and efforts in breaking up the regulated monopoly of Bell System, when the map changed so many times and you can’t even find the original lines of the division?  This question is so interesting that you can find numerous papers, studies and events like Has Divestiture Worked? A 25th Anniversary Assessment of the Breakup of AT&T for in depth discussions.

It suffices to say that one can’t predict the future when you can’t forecast technology well and don’t understand or control the market which is partially influenced by government policies.  There are unexpected consequences when one forges a business-political compromise and overlooks the fundamentals and the interplays of technology and social-economics.  Just look at the wireless services today which weren’t getting much attention before and during the 1984 divestiture.   Yet, less than 20 years after the divestiture, good old wired services began to give ways to the wireless ones at an incredible rate.  Neither of our kids has a phone number associated with the good old household telephone termination any more.   I am sure that is the case for most youngsters and many others now.  Meanwhile, broadband and Internet access services are becoming a must for many with the biggest competition of the “Bells” coming from Cable Services which wasn’t on most people’s radar screen in early 80’s either.  No, I did not see any of these coming in 1984.

Welcome to the fascinating and dynamic telecomm world that connects us to the rest of the world.  Let me assure you it won’t be long before you and I become a part of the network itself.  Talk to you soon!

Thursday, April 22, 2010

The Death of a Teacher


Few weeks ago, there was the passing news about the death of Jaime Escalante at age 79, a Bolivian-born American high school Mathematics teacher and educator.  Most people would not know who Jaime Escalante is but might have seen or heard of the popular 1988 Oscar-nominated Hollywood movie Stand and Delivery.  It was based on the true story of Jaime Escalante’s effort in late 70’s and early 80’s to implement an AP (Advanced Placement) Calculus program at Garfield High School, East Los Angeles, California.  I have a special interest in the story as my wife has been a community college Math teacher and had taught AP Calculus classes at a local private school in early 90’s.   Further, we both care a lot about education and are suckers for movies on teacher-student relations.

Garfield High is a public school with predominantly Hispanic American students.  Situated in East Los Angles, it has had many of the typical problems faced by inner-city schools across the country.  The worst part of the negative spirals traversed by many in such schools is despondence;  students, teachers, parents and siblings, friends and neighbors, school administrators and city/town representatives have simply giving up and no longer believe they can change the outcome and escape from the hopeless fate.  Escalante did not give up.  He immigrated to U.S. in 1964 and worked his way through the system to become a certified teacher.  He went to Garfield High in 1974 and almost quit the job when he went through the initial shocks.  He fought for what he believed in instead.  He persuaded initially a small number of students to take Algebra.  He did not yield to the threat of dismissal and complaints by some administrators and colleagues (for not following the process and coming to school too early and go home too late).   Few years later, his luck changed when the new principal Henry Gradillas - the reformer and unsung hero of the story – arrived at the Garfield High.  With the emphasis of academic achievements and support by the new principal, Escalante was able to begin to offer AP Calculus in 1979.  Of course, much of these time-consuming, boring but nevertheless critical details were not included in the dramatized version of the story in the movie. 

The Escalante story made to the national news in 1982 when ETS (Education Testing Service) suspected cheating in AP Calculus (AB) exam by the students from Garfield High and asked 14 of the 18 students who passed the test to retake it.  Twelve of the 14 agreed with close proctoring.  They proved their ability, cleared their names, and had their scores restored.  Chance is that ETS was alerted first by the “anomaly” of an extremely high passing rate from a historically disadvantaged and “non-performing” school.   The rest is history.  For more insight, see for instance the column written by Jay Mathews who is an education columnist for The Washington Post and was one of the original reporters who reported about Jaime Escalante in 80’s. 

One might think stories like Escalante’s should have convinced everyone that it is possible to change the status quo in education and it is possible to learn and to advance regardless race, gender, and social-economic status.   But 30 years later, there is no evidence that situation in American education system has improved much.   Perhaps people had short memory.  Perhaps the effort and perseverance required was too great for too many.  But more than likely it is simply because people have not thought about it hard enough.

The recent call for increased priority and attention on education by the Obama government is a welcome change.  However, federal government and department of education have a limited influence on the needed reform given the unique decentralized-control of education policy and budget by state and local governments (paid for largely by property tax).  As an indicator of the level of anxiety and cumulated frustrations, in last Tuesday’s annual local school budget voting with a “historical high” turnout of about 25%, 60% of 459 school districts in New Jersey deemed the proposed cost cuttings (including layoffs of teachers and staff) and small increase of tax is not acceptable and rejected the proposed budgets, compared to a typical 30% reject rate in past years.   

The results are not surprising given the recession and economic uncertainty.  As the educational funding is directly linked to local property tax, education is not immune from being overly politicized.  Politicians and ideologues often capitalize on the anxiety of the voters to promote their agenda and priority.  In New Jersey, newly elected governor Chris Christie did not hesitate to cut state allocation of education funds to locals to make voters feel more pain and thus the need to push the burden to others including the teachers and staffs.  With an education system like America’s, it is not too hard to divide parents, residents, teachers/staffs and administrators and pit them against each other.  How then could the system possibly work well when everyone ends up busy paying lip services and defending their own interests rather than working for the real goal – help the next generation to be more competent and competitive.

There is no secret that teachers’ total compensation is not high at all compared to many other professions even after you include the retirement and healthcare benefits and discount the summer months.  As there will never be a consensus of a “right” pay or “fair” pay in a market economy, I would leave that debate to a separate discussion at another day.   Instead, I think it is far more productive to talk about what differences can teachers and students make and how, as many of us (including myself and some teachers) are often oblivious about the unique challenges and opportunities of teaching and learning but thought we knew.  That is what the news of the death of Mr. Escalante really reminded me of.

Over the years, as I hear stories from my wife and read articles and writings from other sources, I began to realize that while the principles are few and simple, the implementation and sustaining is really hard.   Mr. Escalante was probably being humble and guilty of oversimplifying when he said "The key to my success with youngsters is a very simple and time-honored tradition: hard work for teacher and student alike".   The reality is he would not have been as successful and the program would not have been created and sustained if he did not have strong support of the new principal and few of his colleagues.   He would probably have not been able to get as far if parents keep throwing roadblocks and fought him.  If one digs deeper and watches the story more closely, one would realize the real secret of Mr. Escalante’s success was rooted in the fact that he expected and demanded more of his students and he placed his confidence on his students.  That is the most powerful motivator for students.  Indeed time after time we are wowed by how much more one can achieve once she/he goes into a positive spiral of responding to the higher expectation by delivering more and acquiring the self-confidence.  In fact, this basic principle works in school and in common work places as well but often forgotten by teachers, parents and management.
 

If one digs even further, one would realize that what commonly and conveniently referred to or labeled as “success” can be a misleading measure.  While quantification or test scores is a critical confirmation of the effort, it comes AFTER the successful efforts.  It merely confirms one’s success and does not replace the process and experience of excelling oneself.  Everyone knows the most rewarding and satisfying experience in life is “be who you can be” or “fulfill your potential”.   That is the true measure of success; it is your own feeling and confirmation that you can excel to the extent possible regardless the final scores.  Following that path will take a student to places that she/he is good at, whatever that may be.  That is what a good teacher can do for his or her students in addition to expecting more of them.  That is more the reason that one needs to work hard.  Only then, you would know how far you can go.  And one ought not to be confused by “work smart, don’t work hard”.  What it really means is to work effectively (with better study skills, discussions, right helps,..).  Cutting corners and delivering low or minimum quality results should never be rewarded. Incidentally, as reported by Amanda Ripley on Time Magazine on April 8th, there has been some very interesting and pioneering work with randomized experiments on financial incentives on student achievement by Roland Fryer Jr., a Harvard economist.   One of the results of his rigorous and extensive studies was the finding of the efficacy of rewarding students for their effort (as opposed to for the illusive results) which confirms once more that good result is highly correlated with efforts.

There is no question that other than parents, teachers are the most important resources in our life.  I would suggest President Obama take one step further to ask everyone to go back to and reflect on the basics.   As there is a simple truth in teaching and learning: students do respond to higher expectation and confidence.  The best thing and first thing a teacher can and must do is (especially when parents and the society failed to do) to believe in the students, to expect and demand more of them.  The rest is just hard work; pure and simple!

Meanwhile, it would not a bad idea for you and I to watch a few more serious teacher-student movies.  In private lesson settings, the 1964 fairy tale movie My Fair Lady and the 1962 The Miracle Worker about the blind and deaf Helen Keller and her teacher Anne Sullivan certainly top the list.  In group or typical class-room settings, there are different dynamics and challenges.  While Stand and Delivery is about a Math teacher, music, as a performing art, lends itself easily to silver screen as seen in the 1995 Mr. Holland's Opus, the 1999 Music of the Heart, and the 2004 French movie Les choristes (aka The Chorus).   Of course, there aren’t always happy endings in reality despite well-intended actions and sometimes heroic efforts, like the 2008 French movie Entre les murs (aka The Class) and the 1989 Dead Poets Society. Was it worth the price?  I would think so as the alternative is much worse.  Well, want to see more tough kids and classes and turn-around?  You will find some of them in 1967 To Sir, with Love and the 2007 Freedom Writers.  Then there is the 2009 Oscar winning movie Precious: Based on the Novel Push by Sapphire  where the focus was more about the struggle and triumph of this abused high school girl, with her teacher’s help, in an almost impossible environment.  There are also better days and “easier life” though.  As a confused freshmen student in a highly competitive pressure cooker, you may still have a chance to win the girl and earn a prestige diploma like James Hart in the 1973 The Paper Chase.  In a larger schema of things, the 1954 Japanese movie Nijushi no hitomi (aka Twenty-Four eyes) zoomed into how simple and plain love and dedication by a teacher can help her young students through difficult time during and after the war waged by their own government.  It delivered more reality and messages without miracles and fanfare and color.   Finally, for some, the teacher-student relation can be lifelong.  And there is always something that the student can learn and teacher can teach as seen in the 1999 Tuesdays with Morrie based on a true story. Need I say more?

Talk to you soon!