[Congressional Record Volume 143, Number 129 (Wednesday, September 24, 1997)]
[Extensions of Remarks]
[Pages E1841-E1842]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        TUNING IN TO COMPETITION

                                 ______
                                 

                          HON. JAMES A. BARCIA

                              of michigan

                    in the house of representatives

                     Wednesday, September 24, 1997

  Mr. BARCIA. Mr. Speaker, 18 months ago the President signed into law, 
the Telecommunications Act of 1996. Since that time, many people have 
complained that the competition that was supposed to develop hasn't yet 
materialized. While it's true that there hasn't been as much 
competition as those of us who supported the bill would have hoped--for 
example, not a single Bell Co. has been allowed to compete in the long-
distance business--telephone companies are definitely providing 
competition in those areas where they are permitted to compete.
  Monday's Wall Street Journal reported on competition in the delivery 
of cable television service, and detailed how customers have benefited 
from Ameritech's entry into that market. Customer service has improved. 
Innovative packaging of services has increased. Competition is serving 
the customer just as we knew it would.
  Ameritech has already opened up its local market to competition. 
Local phone subscribers in Michigan have the ability to change their 
telephone companies, and many are doing so. Now it is time for the FCC 
to learn from success and open up competition in long distance, so that 
all the benefits of the 1996 act are available for the American people. 
I commend this article to our colleagues and to anyone who believes 
that competition hasn't materialized. Ameritech is leading the way. Let 
us encourage the FCC to follow.

             [From the Wall Street Journal, Sept. 22, 1997]

   It's the Phone Man at the Door--and He Has a Deal on Cable TV--As 
  Competition Breaks Out, a Traveling Salesman Finds a Jaded Audience

                           (By Bryan Gruley)

       St. Clair Shores, MI.--On a quiet street of neat frame 
     houses, soaring oak trees and fluttering U.S. flags, William 
     Kline stands in his driveway talking about cable television.
       Actually, he's yelling.
       The 73-year-old retiree is furious with his cable provider, 
     Comcast Corp. ``They raise the damn prices whenever they 
     want,'' he says. He also hates the programs. ``Who wants to 
     watch that crap? Who wants to watch `The Simpsons?' '' And he 
     is no fan of the customer service, either.
       Listening patiently is Thomas Roland, a fresh-faced young 
     salesman who hopes to persuade Mr. Kline to dump Comcast and 
     switch to Ameritech New Media, a unit of Ameritech Corp., the 
     Chicago Baby Bell. ``It sounds like you're pretty upset,'' 
     Mr. Roland says. ``If you don't like the way your cable 
     company has treated you, that's why we're here.''
       Something alien to most Americans is emerging in the 
     suburbs of Detroit; head-to-head competition for cable-TV 
     service. Telephone giant Ameritech is building cable systems 
     and offering an alternative to consumers who have long had to 
     live with the prices and service of a sole local provider--or 
     go without cable. Mr. Roland and other salespeople in brick-
     red Ameritech jackets scurry door-to-door bearing gifts in 
     black shoulder bags: Coupons for $10 monthly discounts. Free 
     premium channels and installation. Round-the-clock customer 
     phone lines. Nifty on-screen TV listings and high-tech remote 
     controls.
       They are looking for people like Duane Lamers, a retired 
     school administrator who buys cable service from the local 
     system of Tele-Communications Inc., of Englewood, Colo. 
     ``I've been champing at the bit,'' he says, ushering Mr. 
     Roland into his home in suburban Troy, Mich. ``Anything's 
     better than what I've got now.''
       Sitting at his kitchen table, Mr. Lamers signs up with 
     American and lists the beefs he has with TCI. ``The slightest 
     weather change and I end up with three or four snow 
     channels,'' he says, Outages always seem to interrupt his 
     favorite show, the NewsHour With Jim Lehrer, he says, and he 
     has given up trying to get service restored quickly. Mr. 
     Roland commiserates: ``That's what I've been hearing from 
     other people.''


                         ``I've Got The Edge''

       Ronald Hargreaves, 69, chose to stay with TCI but figures 
     he gained anyway. Soon after Ameritech launched service in 
     Troy. TCI gave him a local sports channel free. (TCI says it 
     was contractually required to do so.) ``Now I've got the 
     edge,'' the hardware-store worker says. ``You can either give 
     me service or I can go someplace else with my $30 a month.''
       That is precisely what was supposed to happen as a result 
     of last year's telecommunications law. But cable remains a 
     monopoly in most cities, mostly because the big phone 
     companies that were expected to challenge it prefer to focus 
     on their core business. Some small towns have built rival 
     cable systems, and other tiny pockets of competition have 
     sprouted. But cable operators control 87% of the U.S. 
     multichannel video market, the Federal Communications 
     Commisson says.
       Ameritech is the big exception. With cable franchises in 
     more than 50 cities in Michigan, Ohio and Illinois, the Baby 
     Bell is wooing longtime customers of Comcast, TCI, Time 
     Warner Corp. and other cable giants. Ameritech says it signs 
     up one of every three households it approaches, more than 
     expected when it began service last year. The launch is 
     expensive; Ameritech doesn't expect cable to show profit for 
     several years.


                              No Shortcuts

       But Richard Notebaert, Ameritech's chairman and chief 
     executive, says offering cable TV is part of a long-term plan 
     to deliver a single bundle of voice, video and data services 
     into homes. ``There are no shortcuts,'' he says. ``You have 
     to commit resources and find out if your model works. Ours is 
     working very well.''
       As Ameritech captures some customers and incumbent 
     providers win back others, competition expands the Michigan 
     cable market, the companies agree. Ameritech says as many as 
     8% of its subscribers didn't take cable before. And monthly 
     subscriber charges for MediaOne, the cable arm of Denver-
     based US West Media Group, have grown about 20% in Canton 
     Township, Mich., during the past year even as Ameritech added 
     1,700 subscribers, according to the companies and reports 
     filed with the township.

[[Page E1842]]

       Customers are gaining, whether they switch or not. Where 
     Ameritech now competes, incumbent providers have offered 
     better deals, added free channels and improved customer 
     service. Incumbents say they planned some of these 
     enhancements long before Ameritech arrived but acknowledge 
     they are more aggressive in competitive cities.
       In St. Clair Shores, a blue-collar enclave northeast of 
     Detroit, Comcast bills include a vow to ``meet or beat any 
     price.'' MediaOne started giving customers the HBO channel 
     free--a $9.69 per month value--in return for one-year 
     commitments to its service. MediaOne also rolled out its 
     popular high-speed Internet-access service where Ameritech 
     offers cable.
       In Troy, north of Detroit, hardwood-floor salesman Glenn 
     Lanctot is stunned to find Lisa Kocsis, TCI's local marketing 
     coordinator, at his front door asking if he has any problems 
     with TCI. She says she recently started this door-to-door 
     campaign because ``I think people need to know we care how 
     their cable picture looks.'' A TCI technician waits nearby in 
     a pickup truck, ready to sharpen a fuzzy picture or repair a 
     faulty remote.
       A cable line has fallen in Mr. Lanctot's backyard. ``I 
     called like a couple of weeks ago and never heard from you,'' 
     he says. Ms. Kocsis apologizes and promises to have the 
     problem fixed ``in the next 24 hours.'' She hands him a book 
     of coupons worth $100 and one of her personal business cards. 
     Mr. Lanctot looks incredulous. ``Call you if I have a 
     problem?'' he says. ``Call me,'' she insists.
       Down the street, dentist James Nassar just laughs when Ms. 
     Kocsis introduces herself. ``You're running scared,'' he 
     says. But he adds that he is happy with TCI and doesn't want 
     to change.
       Changing cable service isn't as simple as, for example, 
     switching long-distance phone companies. Although a new 
     provider can use old wiring inside the house, a new 
     connection is needed outside. Consumers also must learn to 
     use new remote-control devices and channel lineups.
       Incumbents say their service is more appreciated now that 
     comparisons are possible. But it is clear that Ameritech gets 
     under their skin. Helen Brodie, a MediaOne vice president for 
     marketing, says Ameritech discounts are ``misleading'' 
     because they are temporary and ``disruptive to companies that 
     are trying to run themselves in a sound manner; we have 
     shareholders.'' John McNeel, general manager of TCI's local 
     system, dismisses Ameritech's practice of equipping 
     installers with vacuum cleaners. ``We prefer that our 
     technicians don't make messes to begin with,'' he says.


                             Four-Cent Deal

       Consumers greet Ameritech with a mixture of delight, 
     befuddlement, pent-up anger--and smarts. Leo Freckelton, an 
     Ameritech installation manager, laments his uncle's refusal 
     to switch to Ameritech, ``He's the only one in the family who 
     hasn't,'' Mr. Freckelton says. Instead, his uncle has used 
     Ameritech offers to wangle better deals from Comcast. ``I 
     think [Comcast] is beating us by four cents'' a month, Mr. 
     Freckelton frets.
       Some just want something new. David Kincaid, a machine-shop 
     worker in Troy, was spending more than $70 a month with TCI. 
     ``I don't know what I'm going to pay for Ameritech, but I 
     want something to compare,'' he says. Pushing a button on 
     Ameritech's interactive remote, he orders an episode of ``The 
     Brady Bunch,'' already in progress. A plot-summary box 
     appears in a corner of the screen: ``Jan makes promises she 
     can't keep in order to win a popularity contest,'' Mr. 
     Kincaid smiles. ``Cool,'' he says.
       But change comes hard, even for some--such as Mr. Kline of 
     St. Clair Shores--who say they are displeased with their 
     provider. Mr. Kline is so upset with Comcast that he cuts off 
     Mr. Roland's Ameritech sales pitch to extend his rant. `` You 
     came here and now you're gonna listen,'' he says. But when 
     Mr. Roland finally offers a package that appears to be better 
     than what Comcast gives Mr. Kline, the man scoffs. ``You're 
     priming the pump,'' he says, ``You'll get it back from me in 
     the long run.''
       Having failed to make the sale, Mr. Roland shakes his head. 
     ``Some people don't realize that competition is going to 
     change things,'' he says. ``It's their mindset that [cable 
     TV] is a monopoly, and they don't really understand 
     competition.''
       Mr. Roland, who just turned 24, wears an earnest smile and 
     keeps his red hair neatly combed. This is his first job since 
     college, and he says he loves it, because ``I get to talk to 
     people and set my own hours.'' On a good day he adds five or 
     six subscribers; his record is 14. His salary and commissions 
     let him afford a new Acura couple and season tickets to 
     Detroit Red Wings hockey games.


                             Peer Pressure

       He spends afternoons and evenings knocking on doors and 
     juggling follow-ups on his cell phone and pager. ``A lot of 
     people turn me away and then all their neighbors sign up and 
     then they call me,'' he says. Not everyone welcomes him, 
     though. One man told Mr. Roland ``If I didn't get off his 
     property, he was going to shoot me.''
       One afternoon in Troy, Mr. Roland lobbies Donald Boisvenue, 
     a computer specialist who slumps in his front door in cutoff 
     jeans and a sweatshirt, looking bored. Mr. Roland shows him a 
     picture of Ameritech's on-screen channel guide. ``That 
     doesn't impress me much,'' Mr. Boisvenue says. Mr. Roland 
     explains how the remote makes it easy to program a VCR. 
     ``Programming a VCR is no big whoop,'' Mr. Boisvenue says. 
     Mr. Roland asks how much TCI charges. ``They're too 
     expensive,'' Mr. Boisvenue says, ``but you guys are going to 
     be the same.'' Mr. Roland leaves a brochure and heads to the 
     next house. ``Not good,'' he says.
       An hour later, though, a voice-mail message from Mr. 
     Boisvenue asks him to return. Sitting in his family room, Mr. 
     Boisvenue confesses that his wife saw Ameritech's brochure 
     and demanded, ``Why didn't you try this?'' He says Mrs. 
     Boisvenue is upset with TCI price increases, and now Mr. 
     Boisvenue starts recalling things ``that drive me crazy'' 
     about TCI. He signs up.
       Back in his car, Mr. Roland phones Walter Bartels, 29, a 
     human-resources professional. Mr. Bartels had complained two 
     weeks earlier that Ameritech workers damaged his lawn while 
     burying cable. The company's quick response so impressed him 
     that he wants to cancel TCI and take Ameritech. Mr. Roland 
     tells him his monthly bill will drop to $21 from $28, 
     although it will climb to $31 after a one-year discount 
     expires. Clicking off his cell phone, Mr. Roland says, 
     ``That's a success story; you should've heard the 
     conversations we had the other day.''
       But two weeks later in St. Clair Shores, Downing Street is 
     a downer for Mr. Roland. At house after house, people either 
     aren't home or they say they are satisfied with Comcast. 
     ``I've never seen so many people happy with their cable 
     service,'' he complains. Just then a Comcast van pulls up and 
     Mr. Roland watches balefully as a technician trots up to a 
     house. ``They're giving everybody their new interactive 
     box,'' Mr. Roland says. ``Everything we're doing, they're 
     copying.'' (Comcast says it decided to upgrade local systems 
     three years ago.)
       He finally gets to make a pitch in the living room of 
     Robert and Evelyn Mutart. Like many older people, they aren't 
     keen about the high-tech remote or on-screen guide. But Mrs. 
     Mutart wonders whether the Disney Channel comes free. 
     ``Yep,'' Mr. Roland says, ``You'll get it 24 hours a day.'' 
     Mr. Mutart, a 73-year-old retired electrician, grins. 
     ``Yeah,'' he says, ``I need the Disney Channel 24 hours a 
     day.'' Mr. Roland leaves without making a sale--but the 
     Mutarts subscribe several days later.
       He has better luck on Blackburn Street. Norman and Joanne 
     Graleski are intrigued by the remote's VCR-programming 
     feature. ``How long do we have to go to school to learn all 
     this?'' Mr. Graleski quips, His wife doubts that Ameritech 
     really will cost less. ``I'm sure after everybody commits to 
     this, you'll jack up the price,'' she says. If so, Mr. Roland 
     says, ``there's nothing stopping you from going back to 
     Comcast.''
       Finally, Mr. Graleski says he wants to switch. ``You better 
     not screw this up because it took me a year to figure this 
     out,'' chides his wife, pointing at the VCR. ``If it doesn't 
     work out, you can call [Comcast] back.''
       The family next door interrupts a baked ham dinner to 
     welcome Mr. Roland. ``You made a sale before you walked in,'' 
     says Fred Hawreluk, a bank official. ``Just tell me what 
     you've got and how much it costs.''
       While Molly the yellow Labrador sniffs Mr. Roland's leg, 
     Mr. Hawreluk explains that he soured on Comcast over a 
     billing dispute involving $8 a month, ``It wasn't the money, 
     it was the principle,'' he says. Still, he balks after 
     scanning Ameritech's channel lineup: ``I'm not sure we'll be 
     getting everything we get from Comcast.''
       His wife shushes him: ``We don't watch all of that stuff 
     anyway.''
       Mr. Roland just smiles and asks if he can use the phone to 
     schedule an installation.

     

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