Mickey Mouse Plan

We continue to pay for an old-fashioned telephone landline despite its escalating cost (currently $90 per month). From 2010:

[Our Mickey Mouse telephone] survives because it's our one phone that can operate if the power goes off say, during an earthquake. As long as our landline has tone, we can dial out ("dial" for once may be interpreted literally).

Suffering from escalating maintenance costs on copper-wire technology and from a shrinking customer base, AT&T wants to exit the landline business: [bold added]

A proposal by telecommunications giant AT&T to withdraw landline service from most of the Bay Area has sparked widespread fear among residents, many of whom live where cell service is spotty, power outages are frequent and losing connectivity is “very scary.”

...Thanks to its earlier monopoly status and state law requiring voice communications for all who want them, AT&T is for large areas of California the “carrier of last resort” — the utility required to provide phone service to anyone wanting it in its service area. In its proposal to the utilities commission to escape that obligation, the company said it is seeking to stop landline service only in areas “where there is a demonstrated voice alternative.”

Nearly all those commenting said they opposed the plan, citing a host of concerns, from medical crises to loss of communications during earthquakes, fires, floods and storms because cell phone infrastructure is damaged or power outages cut off internet service.

We are not as exposed to power outages and cellphone interruptions as residents who live in the mountains, but earthquake risk is enough to make us landline subscribers. We plan to keep Mickey Mouse useful as long as possible.

Mickey Mouse Technology

They were cute and once upon a time ubiquitous and cheap. I even had one.

The old mechanical Mickey Mouse watches, which were on display in the Walt Disney Family Museum, are passé, superseded by high-tech wrist devices.

If the kids must wear watches with cartoon characters, they seem to favor ones that are popular from this century. Despite their current lack of popularity, I know several of the over-40 set who refuse to part with Mickey Mouse timepieces though they no longer wear them. Such is the powerful hold of nostalgia.

Another vestige of earlier days is our Mickey Mouse dial telephone, which I first mentioned in this journal in 2010. We keep it and our landline as insurance against natural disaster:

Mickey Mouse survives because it's our one phone that can operate if the power goes off say, during an earthquake. As long as our landline has tone, we can dial out ("dial" for once may be interpreted literally).

Many in the younger generation don't have landlines, because cell phones and router-plug-in phones are sufficient for their needs.

It's long been rumored that AT&T will abandon the pulse dialing technology that once powered everyone's phone. When it pulls the plug on that, I'll pull the plug on them.

We've Heard This Before

American capitalism is going through one if its periodic episodes of gargantuan infatuation. The analysis is familiar: "XYZ Corp is so big and so dominant that no one can possibly compete with it for the foreseeable future. It has the most money, it attracts the brightest people and ploughs $billions into R&D. Legions of lawyers and lobbyists protect its interests. Customers flock to it for its reputation of being the biggest and best, etc. etc."

(Graphic From Management Study Guide)

In the mid-1970's your humble blogger was introduced to the Boston Consulting Group matrix.

According to BCG businesses can be classified according to four types: stars, cash cows, question marks, and dogs.

Stars- Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. SBU’s [Strategic Business Units] located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures.

Cash Cows- Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. These SBU’s are the corporation’s key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued.

Question Marks- Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-share. If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars.

Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be liquidated if there is fewer prospects for it to gain market share. Number of dogs should be avoided and minimized in an organization.

High-market-share companies, whether they are cash cows or stars, are very difficult to dislodge because, in general, their costs are lower than smaller competitors' and they have more reinvestable cash flow to maintain their dominance.

Today the evidence seems to suggest that the biggest companies are pulling away from, not regressing back to, the field: [bold added]

The biggest companies in every field are pulling away from their peers faster than ever, sucking up the lion’s share of revenue, profits and productivity gains...But new data suggests that the secret of the success of the Amazons, Googles and Facebook s of the world—not to mention the Walmart s, CVSes and UPSes before them—is how much they invest in their own technology.

IT spending that goes into hiring developers and creating software owned and used exclusively by a firm is the key competitive advantage. It’s different from our standard understanding of R&D in that this software is used solely by the company, and isn’t part of products developed for its customers.

Just like the "old" IBM, AT&T, Microsoft, GM and GE, the tech giants Amazon, Google, and Facebook appear to have unassailable positions in their respective sectors. Everyone else is at best a "question mark" and has to invest $billions just to be an also-ran. Everyone else may as well give up.

Landline: Peace of Mind

I'm glad to see we're not alone in keeping it: Why the Landline Phone Will Never Go Away [bold added]

Rotary-dial Mickey still works

According to a 2017 U.S. government survey, about 44% of households still own traditional phones, down from 53% three years before—but still much higher than, say, the share of those buying vinyl records, another cultish throwback.

For many, the reason is pragmatic. Cell service is spotty in large, rural stretches of the country and even the hills of Los Angeles. Rocky elevation disrupts communication with cell towers, which are also often banned in environmentally protected areas. You can rely on a landline when the power is cut, or during an emergency like a hurricane that causes cell blackouts. And cellphones offer no real escape from harassment and distraction; we’re all being beckoned all the time, everywhere—if not by an actual voice on our cellphones, then by texts, emails, swipes on dating apps.

As we reflected last year:

I'll still keep the AT&T landline. Old-fashioned single-purpose phones still operate on it, and because it has a separate power source the landline may still work when cell, WiFi, and electrical services are out.

About 20% of the time the cell-phone calls at home are faint or are filled with static. When we try again on the landline, it's clear as a bell.

If we were pinching pennies, we'd probably cancel the service because $60 per month is expensive insurance. In our current circumstances, however, we'd rather have peace of mind.

Naming the Players

A contest easier to understand and more quickly resolved

Economist Tyler Cowen opined (see yesterday's comment) that Washington, DC, and the San Francisco Bay Area are "power centers" on a collision course. This is an example of the "coming clash of the titans" (CCOT) type of prediction.

One sees the CCOT most commonly in sports; for example, Las Vegas bookmakers favor the Houston Astros to meet the New York Yankees in the 2018 World Series, though neither team, at 5-1 odds, can be considered a heavy favorite. A better sports example is professional basketball, where most experts thought a fourth straight championship match-up between the Golden State Warriors and the Cleveland Cavaliers was inevitable; both teams have performed worse than expected this year, and a Warriors-Cavaliers Finals is far from assured.

In the business world your humble blogger recalls 1970's newspaper and magazine features about the looming battle between AT&T and IBM, as communications and computers began to converge. Both companies were so dominant in their respective fields that the Justice Department pursued antitrust actions against both. AT&T was broken up in 1982, and IBM, which introduced the PC in 1981, lost control of its invention to Microsoft and Intel. Today Microsoft and Intel are each more valuable than AT&T or IBM, and the clash of the 1970s-tech titans never occurred.

In 1835 Alexis de Tocqueville foresaw that Russia and the United States would battle for world supremacy.

Their starting-point is different, and their courses are not the same; yet each of them seems marked out by the will of Heaven to sway the destinies of half the globe.

For half a century de Tocqueville's prediction was spectacularly true, though today the principal rivalry seems to be between America and China.

Picking #1 is hard enough, picking both #1 and #2 is tougher.

Overcoming Inertia

Xfinity's WiFi is 5-10x the speed of AT&T's U-verse.

Inertia is a fundament of physics. It's also a powerful behavioral phenomenon. Businesses rely on customers' inertia when prices are raised, and politicians impose tax surcharges and toll increases just below the threshold where the governed take action.

As I noted in April, over the past 15 years AT&T through acquisitions became the sole provider of all four of our communications systems (landline, cellphone, television, and WiFi). The total cost doubled to $500 per month without improvement in service. It was time to do something about inertia (the ancients called it sloth).

Earlier this week we replaced AT&T's television and broadband service with Xfinity's offering. The basic TV channels are about the same, while the WiFi is 5-10 times quicker; the speed improvement is especially noticeable when streaming movies or updating apps on iPhones and iPads. The monthly combined charge is $129, $47 less than AT&T.

The big savings will occur this fall when we move our cellphone account. I had thought that by switching carriers for four lines, we would save perhaps $60 per month. But the cost reduction could be much higher. [bold added]

telecommunications companies are losing their power to raise prices for using their networks, in part because the U.S. cellphone market is nearing saturation. That has kicked off a vicious price war among the four national wireless carriers.

Offers from wireless providers are becoming increasingly extreme. Sprint this month launched a short-term promotion to give away a free year of wireless service to new customers who supply their own mobile phones. The move comes months before Apple Inc. is expected to introduce its newest iPhone, which is when carriers typically roll out discounts.

The competition grew so intense during the first three months of this year that Verizon, the largest national carrier, suffered its first-ever quarterly subscriber loss. AT&T Inc. and Sprint also lost customers, and the industry’s total revenue growth slowed to 1% from a year ago, its lowest-ever rate.

I don't love any of these cellphone companies, especially AT&T; however, I do love capitalism.

ATT: the Penultimate Straw

Thirteen years ago we had decent diversification in our communications providers: DirecTV for television, SBC for WiFi and landline, and Sprint for wireless. In 2007 we moved the wireless to AT&T, which was the only carrier that could carry the iPhone initially.

SBC/ATT went on an acquisition binge--its latest being DirecTV in 2015---and now provides all four of our services (wireless, landline, TV, and WiFi). Like clockwork AT&T jacks up prices annually, but just below the pain point for switching. We now pay a total of $500 a month, about 50% higher than for the same services five years ago (worse than it sounds because the DSL is appallingly slow while the competition has raced ahead).

The pain point was reached when AT&T today sent out emails to customers who have a grandfathered unlimited data plan for the iPad; the unlimited status is essentially being eliminated on May 24, 2017. (This affects one member of our household.)

In 2017 Mickey still worked

In the next month we will take up Comcast on its offer to provide TV and WiFi for $69.99 per month, more than a $100 per month savings over DirecTV and AT&T's snail-like DSL. The big switcheroo will come this fall when the new iPhone comes out. Four lines will move to Verizon, Sprint, or T-Mobile, and AT&T will lose our $300-per-month cellphone (it was $200 a few years ago) account.

I'll still keep the AT&T landline. Old-fashioned single-purpose phones still operate on it, and because it has a separate power source the landline may still work when cell, WiFi, and electrical services are out, another instance of diversification lowering risk.

No Fury

Michelangelo's Last Judgment (Wikipedia photo)
Better to be on the top than the bottom

Youngsters have their eyes on life's smorgasbord--the colleges they want to attend, jobs and careers, places to live, when to start a family, etc.--while over-50's gaze more at eternity (in addition to staving off decrepitude and checking off items on the bucket list).

Death may still have its sting, but Hell ("a medieval relic") doesn't preoccupy Westerners any more. Everlasting fire becomes less problematic when one no longer has corporeal form--"Descartes in the 17th century declared that the soul was immaterial, and thus beyond physical pain"--and separation from God is not so terrible if a lonely sinner has thousands of friends just a click away.

The theology of Hell also doesn't seem fair to modern eyes--"It could not be just and right, for example, that all the unbaptised were automatically sent there"--what about all the good people, including Old Testament heroes, in history who weren't even given the opportunity to be born again? If God reasons like Western man (or woman), then traditional Hell should not be a concern.

But if there's even the slightest chance that the medievalists were onto something, it may be prudent for those with a wrinkled mien to start going to church again. It's not religion, it's math.

Pascal's wager:

Given the possibility that God actually does exist and assuming the infinite gain or loss associated with belief in God or with unbelief, a rational person should live as though God exists and seek to believe in God. If God does not actually exist, such a person will have only a finite loss (some pleasures, luxury, etc.).

Really, it's not that complicated.

AT&T: Too Big to Care

Kludge first, tidy up later.

We're not power Internet users, i.e., we don't need to stream high-definition video for hours on end. We've been contented subscribers to AT&T's ADSL (asymmetric digital subscriber line) service, which since 2005 has been fairly reliable (except for an episode last month).

Two years ago AT&T's 2WIRE modem finally gave out, and we replaced it with a $150 Netgear DGND300 (pictured standing, right), which broadcasts Wi-Fi signals throughout the house under the 802.11g and the faster 802.11n standards. All was copacetic.

Last month AT&T announced that:

1) All ADSL users in the area would be switched to VDSL (very high-data-rate digital subscriber line), which can't be read by the Netgear modem;

2) ADSL service would be discontinued by the end of September or when the subscriber switched to VDSL, whichever was earlier;

3) VDSL users would receive a "free" AT&T modem.

Rather than try your patience, dear reader, with a long(er) whiny post I'll just say:

AT&T turned off the ADSL connection without warning, so we had to convert to VDSL immediately to continue Internet service.

The new 2WIRE 3600HGV modem broadcasts in slow 802.11g and slower 802.11b only;

The 2WIRE signal is so weak that a wireless device has to be within 10 feet of the modem/router.

Fortunately, it was a simple matter to connect the modems via an Ethernet cable and use the Netgear's stronger signal. All is copacetic again, but the shabby treatment by a too-big-to-care company will make us look harder at alternatives to AT&T. © 2012 Stephen Yuen

In Diversity There is Strength

2008 frozen MacBook
Not worth fixing?

Your humble servant settled the Windows vs. Mac controversy years ago. The solution: get both, unless you're a starving student. For personal uses, such as entertainment or editing videos, the Mac is much easier to work with. Also, transferring data such as calendars and contacts between Macs, iPads and iPhones is quickly effected.

For business use, I still am wedded to the Windows version of Microsoft Office, as are most of my clients. Yes, Office files can be moved between platforms, but I'm about 20 percent faster on the PC version and do work on the PC more than on the Mac.

It's always handy to have an extra computer in case one of them breaks down. Over the weekend the four-year-old MacBook froze when starting up and still won't get unstuck. (This post has been written on a five-year-old Dell desktop.) It's an inconvenience that the MacBook is down, but the Dell keeps me in business so there's no need to rush the fix / replace decision.

In diversity there is strength.

Related: AT&T persists in hawking its U-verse package. AT&T already has our landline, mobile, and DSL internet account. Now it wants our television, too.

However, switching from our satellite TV account to AT&T would be risky. AT&T's Internet was down for 12 hours from Friday night to Saturday morning; if we had switched to U-verse our TV could have been down, too. The vulnerability to a single provider is not worth the few dollars saved. © 2012 Stephen Yuen