Tough Calls: AT&T and the Hard Lessons Learned from the Telecom Wars
Through good times and bad, few companies have been so prominently and constantly in the public eye as AT&T. Unblinkingly honest, "Tough Calls" is an insider's firsthand account of how AT&T tried to cope with fierce competition, economic turmoil, and intense media scrutiny. This is the story of the phone company - and there isn't anyone who knows the story like Dick Martin. "Tough Calls" reveals how the strategies that drive major business decisions are disastrously wrong as often as they are right.
cut $1 billion from the company’s cost structure—not a particularly surprising move for a new CFO. Nor did it turn many heads when he revived negotiations with McCaw Cellular by devising a $400 million minority investment that demonstrated the seriousness of AT&T’s intentions, while simultaneously getting McCaw through a cash crunch that was diverting its attention from the negotiations. Scrapping earlier plans to buy only a piece of the wireless company in favor of a full merger was audacious,
through, it was no wonder that employees were shellshocked. Armstrong had developed his own theories on leading change as CEO of Hughes Electronics. He had joined Hughes when the Cold War ended and defense contracts, its traditional source of revenue, were withering. Over the course of several years, he led Hughes in simultaneously downsizing, spinning off businesses, and building a new source of earnings around satellites broadcasting entertainment programming into people’s homes. It was a
‘‘Messrs. Zeglis and Hindery said they didn’t think cultural differences would be a barrier to working well together,’’ Cauley wrote. ‘‘Mr. Hindery played down the notion that cable companies still act like buccaneers, adding that TCI’s operations are similar to those of the phone company. The two executives noted they . . . will have a collaborative approach to running things.’’2 Eventually, Armstrong had to settle the issue. He took Zeglis and Hindery to lunch at a nearby restaurant, where they
that John Walter had to go, Walter Elisha was the ﬁrst board member he called on, ﬂying to Elisha’s summer home in Nantucket. The two old friends had struggled with the implications—Allen knew it meant that his AT&T career was over, and Elisha didn’t try to persuade him otherwise. But he also reinforced Allen’s determination to get it over with. I was offended that the board apparently didn’t trust me or my team to handle all aspects of the announcement, and I was dubious that Elisha was ready
access charges accounted for most of the local companies’ proﬁts and subsidized the cost of providing local service. Ever since the breakup of the Bell System, AT&T had labored mightily to lower these charges, which most economists agreed were grossly inﬂated, but it really had only two choices: build its own links to its customers, which was impractical in most cases, or engage in annual, contentious three-way negotiation between the Bells, the longdistance companies, and the FCC, which seldom