tag:blogger.com,1999:blog-2870080374210222741.post4289288399029132880..comments2024-03-21T21:51:46.526-04:00Comments on There's Always a Way: Things I don't understandArthur Fontainehttp://www.blogger.com/profile/08171848807989334357noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2870080374210222741.post-43589612646601673482013-08-26T18:44:24.615-04:002013-08-26T18:44:24.615-04:00with a CAPCHA each time. Arghhh!with a CAPCHA each time. Arghhh!Dave Rosshttps://www.blogger.com/profile/17739528572503229131noreply@blogger.comtag:blogger.com,1999:blog-2870080374210222741.post-851383741710379402013-08-26T18:43:58.124-04:002013-08-26T18:43:58.124-04:00finally able to post via google account.finally able to post via google account.Dave Rosshttps://www.blogger.com/profile/17739528572503229131noreply@blogger.comtag:blogger.com,1999:blog-2870080374210222741.post-82602023178741386152013-08-26T18:43:29.959-04:002013-08-26T18:43:29.959-04:00you're welcome!you're welcome!Dave Rosshttps://www.blogger.com/profile/17739528572503229131noreply@blogger.comtag:blogger.com,1999:blog-2870080374210222741.post-43077322953953082392013-08-26T10:04:41.738-04:002013-08-26T10:04:41.738-04:00Dave Ross solved the Area Code mystery for me over...Dave Ross solved the Area Code mystery for me over on Facebook. He suggested that the phone company chose the bad option because it's cheaper for them, under the assumption that for-profit organizations are always driven by cost.<br /><br />One problem there. In addition to being wrong as a policy/economic decision, the code-splitting option cost *way* more for New England Telephone. Reprogramming all the switches, communicating to and supporting the public, that's a big deal at that scale and it cost a fortune. That expense pales in comparison to the costs incurred by customers, but it's a critical point.<br /><br />I completely forgot that New England Telephone was, and is, a regulated monopoly. Its profit is determined by a formula based on its (justifiable) costs. So they just needed to prove that its choice was justifiable, and I'm sure they had plenty of experts say that it was. I worked for the phone company's parent from 1989-1993 (NYNEX, later Bell Atlantic, now Verizon), and saw all sorts of gold-plating in the telco division that you avoided in the unregulated parts. (I sold phone systems, but we worked with the telco's Centrex/T1 sharks.)<br /><br />So it never was about the sweet little old ladies, it was about generating nonrecurring profit over a period of what, six or eight quarters. New England Telephone acted completely rationally, given the incentives offered. It's like the chapter in "Freakonomics" that shows real estate agents sell harder, and charge more, for their own properties than for their customers'. NET's transient profit was much smaller than the overall costs to the public, but it was more than enough to drive their choice.<br /><br />THAT explains it perfectly. See, these are answers that exist, folks, it just takes collaboration to bring them out. :) Thanks Dave!Arthur Fontainehttps://www.blogger.com/profile/08171848807989334357noreply@blogger.com