The strange story of Southwestern Bell'sphone book business

At one time, many large cities had a “big book” published by the local telephone company, plus one or two “little” and supposedly more convenient, neighborhood directories published by other companies. Then the local phone companies struck back by publishing their own compact volumes. According to some surveys, most people have no idea who publishes the directories they use.

Competition intensified a few years after the Bell break-up at the beginning of 1984. In 1987 Southwestern Bell decided to move in on what it saw as lucrative markets in Manhattan, Chicago and Tampa. Southwestern hoped to succeed with a “friendlier” phone book format. In Manhattan, for example, they published a single 816-page book that included both consumer and business listings, as an alternative to the two separate NYNEX yellow books with nearly 4,000 pages!

Their strategy was fundamentally flawed. In order to compete with the incumbent directories, Southwestern had to charge less for advertising. But they had to pay the incumbent companies, like NYNEX, for the information that went into the directories, which the incumbents got for free.

The public knew that many businesses did not advertise in the new book, so they kept both books around, or did not bother with the new book at all. Advertisers knew this, so they could not afford to abandon the original book, even if they were offered extremely attractive incentives to advertise in the new book.

Ronald Kennedy of Southwestern Bell told the New York Times, “We have reached a point where the return on our investment is no longer adequate, and the expense needed to increase market share simply cannot be justified.” After spending two years and many millions, Southwestern Bell gave up.

In 2005 Southwestern Bell became the “new” AT&T. Meanwhile NYNEX had become Bell Atlantic and then Verizon.

Verizon and AT&T don’t compete with paper Yellow Pages now, but they do compete with online directories. AT&T has both YellowPages.com and AnyWho.com, and Verizon spinoff Idearc has SuperPages.com. At least the companies don’t waste trees in the new competition.

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This story is from my upcoming book, Phone Systems & Phones for Small Business & Home. CLICK for preview and email link for notification when it's available.

Your phone can show others where you are

Sprint Nextel has signed up hundreds of thousands of customers for a feature that shows them where their friends are with colored marks on a map viewable on their cellphone screens. Verizon Wireless is preparing to offer a similar service in the next few weeks to its customers.

Many cellphones today have Global Positioning System technology that has been used for driving instructions, but carriers hesitated to offer tracking of cellphone users' locations because of privacy and liability concerns.

Now, increasingly, the wireless industry is deciding that location tracking has so much sales potential that it's worth the risks, so long as tight safeguards are in place. It's a result of the convergence of GPS with another digital phenomenon: a generation of young people who are comfortable sharing a great deal of personal information on social-networking Websites and eager for still more ways to stay connected. The initial target market of location-tracking services is 18- to 24-year-olds.

The wireless industry is cracking open this new market gingerly, mindful that it could face a huge backlash from consumers and regulators if location-tracking were abused by stalkers, sexual predators, advertisers or prosecutors.

Like Sprint Nextel, Verizon Wireless will use a service called Loopt, led by a 22-year-old, Sam Altman, who created the software as an undergraduate at Stanford. Mr. Altman says he is well aware of the dangers of misuse. "It's one of those things, the more you think about it, the more ways you can figure out a creep could abuse it," says Altman.

He set out to give Loopt strict rules to prevent misuse. The most significant is that cellphone users who sign up can make their whereabouts available only to a network of friends who also buy the service. They can view each others' location any time, with the proviso that users always can temporarily turn off location-tracking. The service doesn't continuously update, because that would overtax the carrier networks and consume too much battery life; it "refreshes" every 15 minutes or so, and users can always manually refresh. Altman added a couple of other rules to make the service safer. Children under 14 can't sign up. And for the first two weeks, new users are to get several messages reminding them that the service is on and that they're being tracked.

Some in the industry think wireless carriers are being too skittish. Richard Wong, a partner at venture-capital firm Accel Partners, says "operators are sometimes too careful around this issue and are stifling innovation to some degree." He says the industry isn't taking into account that younger consumers have a much more relaxed view about what constitutes an invasion of privacy than their parents. (Info from The Wall Street Journal)

Moto to split in two

Motorola will split into two publicly traded companies, separating its troubled cellphone business from the rest of its operations. The announcement on Wednesday came two months after the company announced a review of its cellphone business. The division's market share plunged in the past year as it failed to come up with new models to replace the hit Razr. The division had a $1.2 billion loss in 2007, pushing Motorola into the red.

Moto hopes that by spinning the division off sometime next year, it will aid a recovery by making it easier to recruit a new chief who can halt the exodus of managers and technical staff.

But the separation could add to the handset division's difficulties. "The announcement increases the turmoil in mobile devices, which has seen four handset chiefs in as many years," said Brian Modoff, telecom analyst at DeutscheBank. "This doesn't give customers clarity, it tells them that the business won't be sold."

Motorola said it expects to finalize the split in 2009 by giving shareholders stock in a new company that will include the handset business through a tax-free distribution. Motorola will retain its other businesses, which make set-top cable boxes, wireless network equipment, public-safety radios and hand-held bar-code scanners.

During a conference call, analysts questioned whether the handset division, which has been unable to recruit a new chief while part of Motorola, will have enough engineering and management staff left to create the cellphones that a full staff could not. They also asked whether the division would have enough cash to sustain it until it becomes profitable.

Motorola said Jan. 31 that it was weighing whether to sell or spin off the handset division. But rival handset makers and financiers expressed little interest in buying or partnering. The biggest challenge now for Motorola is finding a new CEO, because spinning the company off without a corporate leader may be difficult.

A central problem at mobile devices remains the same as it was more than a year ago, when the end of the Razr's run laid bare a chronic inability to pick a few platforms for chips and software on which to standardize products. That failure has grown more costly as Motorola has shipped fewer phones, leaving less of a base over which to spread its costs. (info from The Wall Street Journal)

Comcast & Time Warner may go wireless

The two biggest US cable providers, Comcast and Time Warner are discussing a plan to provide funding for a new wireless company that would be operated by Sprint Nextel and Clearwire.

The partnership would create a nationwide wireless network using WiMax technology, which is designed to provide high-speed Web access from laptops, cellphones and other mobile devices, as well as high-quality mobile video. Sprint and Clearwire have been working for months to cooperate on a WiMax rollout and are now trying to raise at least $3 billion for a joint venture.

Under the plan the parties are reviewing, Comcast -- the largest cable operator with 24 million subscribers -- would put as much as $1 billion into the venture, with No. 2 operator Time Warner Cable adding $500 million. The sixth-biggest cable operator, Bright House Networks, is also involved in the talks and would contribute between $100 million and $200 million.

Sprint and Clearwire, a start-up founded by wireless pioneer Craig McCaw, are trying to line up other funding too. Intel has shown a willingness to put in about $1 billion or more, and Google could provide hundreds of millions. The exact amount each would contribute could change, and people involved in the discussions said it is still possible the entire deal could fall through.

Entering the wireless business is becoming a bigger priority for cable companies as they compete fiercely for customers with telecom giants AT&T and Verizon. They have encroached on cable's turf by entering the TV business and are positioning themselves to offer a "quadruple play" of services that includes landline phone, high-speed Web access, cellphone, and video.

Cable companies' push into wireless would mark the next chapter in that escalating rivalry. It isn't clear what wireless services the cable operators intend to offer via WiMax. Executives at some of the operators feel the U.S. wireless market is already crowded, with 80% of US. consumers already owning a cellphone.

The companies are likely to try to distinguish themselves with advanced mobile data and video services that take advantage of the content they are already adept at licensing. People familiar with the discussions said some cable companies are looking at options to develop their own mobile devices in partnerships with manufacturers.

In exchange for funding the WiMax joint venture, the cable companies would get equity in the business and would be able to purchase wholesale access to the network to offer their own high-speed wireless data and voice services to customers.

The cable industry has been flirting with the idea of getting into wireless for years, but hasn't had a clear strategy. Investors have also discouraged cable companies from embarking on any big spending projects. A consortium of cable operators including Comcast, Time Warner Cable, Bright House Networks and Cox Communications Inc. bought more than $2 billion in radio spectrum in a 2006 government auction but never put it to use. The same companies created a separate joint venture with Sprint in 2005, dubbed Pivot, that offered cellphone service in about 30 markets by the time it stopped marketing late last year amid low demand. One key problem was that cable providers didn't have significant control over pricing and marketing. They are asking for that control in the new WiMax venture. Comcast and other cable operators have also mulled acquiring a major wireless carrier.

Cox, the third-biggest cable operator, appears to be pursuing a separate wireless push. It acquired 22 radio spectrum licenses for $305 million last week, which would allow Cox to offer wireless service in its markets, predominantly in the south and southwest.

If cable operators dive into wireless, that will put more pressure on satellite TV providers, their other major competitors, to do the same. Satellite providers on their own can't offer high-speed Web access or voice services. Dish Network Corp. took a step into the wireless business through the FCC auction, winning 168 licenses throughout the country for $712 million. DirecTV Group Inc. hasn't announced any plans in wireless. (info from The Wall Street Journal)

Google urges TV "white space" to be used for wireless Web

Less than a week after losing in the latest US wireless-spectrum auction, Google renewed a pitch to use TV "white space" -- unlicensed and unused airwaves -- to provide Internet service.

In a letter, Google pressed the FCC to open up the white space for unlicensed use in hopes of enabling more widespread, affordable Internet access over the airwaves. "As Google has pointed out previously, the vast majority of viable spectrum in this country simply goes unused, or else is grossly underutilized," Richard Whitt, Google's Washington telecom and media lawyer, wrote.

Google said the white space, located between channels 2 and 51 on TV sets that aren't hooked up to satellite or cable services, offer a "once-in-a-lifetime opportunity to provide ubiquitous wireless broadband access to all Americans." In addition, opening up the spectrum would "enable much-needed competition to the incumbent broadband service providers," Whitt wrote.

A majority of FCC commissioners, including Chairman Kevin Martin, previously have indicated that they support the use of white-space spectrum, as long as the technologies deployed are sufficiently robust to prevent interference with TV broadcast signals.

Although it wasn't the first time Google urged the FCC to open up TV white space, the company's public letter was notable, given Google's involvement in the just-ended government auction of radio spectrum. In the auction, Google was outbid by Verizon Wireless, but Google had already convinced the FCC to grant an open-access provision that will allow customers to use whatever phones or software they wish on a portion of the spectrum.

TV broadcasters oppose the use of white space, fearing it would cause interference with television programming and could cause problems with a federally mandated transition from analog to digital broadcasting signals next year. But Google urged the FCC to adopt a series of overlapping technologies to prevent signals from interfering with each other. "Google also would be willing to provide, at no cost to third parties, the technical support necessary to make these plans happen," Whitt said. (info from The Wall Sreet Journal)

Metro One hangs up on directory assistance business

Metro One Telecommunications will leave the wholesale directory assistance business by May 5, closing call centers and firing about 600 people.

The Portland, Oregon company said it will close or sell call centers, where it handled incoming information calls in Minneapolis; Charlotte, N.C.; Orlando, Fla.; and Honolulu in addition to its recently closed call centers in Long Island, N.Y., and Portland. It also will reduce corporate staff at its headquarters.

After the transition, Metro One expects to employ about 70 at its headquarters, where it will provide inbound and outbound contact services and leverage its databases and proprietary information systems to provide services to consumer and business marketers.

The company said it plans to help its telecommunications customers find alternative solutions. (info from the Associated Press)

Google misses chance to enter wireless business

The two largest cellphone companies dominated bidding in a record-setting government airwaves auction, according to results released Thursday. AT&T and Verizon Wireless together won $16 billion of the $19.6 billion bid in the auction. Verizon bid $9.4 billion and AT&T $6.6 billion.

The results raised concern that the auction failed to attract any new competitors to the cellular telephone market to challenge the dominant companies. Google was not among the winners, meaning the search engine giant will not be entering the wireless business.

One new entrant, Frontier Wireless LLC, owned by leading satellite television company EchoStar., won nearly enough licenses to create a nationwide footprint.

Verizon Wireless won nearly every license in the consumer-friendly "C block." The frequencies, which encompass about one-third of the spectrum at auction, is subject to "open access" provisions pushed by the FCC. That means people on the network can use whatever phones or software they wish. Verizon won enough licenses to cover every state but Alaska.

Google posted a bid for the C block licenses early in the auction, assuring that the open-access provision would be put in place, but the offer was not enough.

A section of airwaves dedicated for a nationwide emergency communications network failed to attract a winning bidder. FCC head Martin ordered an investigation. Public interest groups asked the agency to investigate allegations about a meeting between Frontline Wireless and its financial backers and a company called Cyren Call, created by Nextel Corp. co-founder Morgan O'Brien. Frontline was widely expected to bid on the public safety spectrum block. But the company dropped out before the auction began after failing to meet a minimum required payment.

Cyren Call was acting as the agent for a nonprofit public safety trust that would operate a shared network with the winning bidder. (Info from The Associated Press)

Verizon opening network to others' phones

Verizon Wireless, following through on a promise it made last fall to open its network to a wider array of mobile devices, unveiled details of how consumers would be able to use handsets and services that the carrier doesn't offer through its own cellular network.

Under the new policy, any company that wants to make a cellphone or another product can sell it to Verizon's 65 million customers as long as it meets the carrier's minimum technical requirements, which executives said wouldn't be burdensome. The manufacturers will be responsible for marketing and distributing the devices.

Verizon Wireless, which previously restricted its network only to phones it sold through its stores or those of its distribution partners, made the shift in response to growing demands from regulators, consumers and technology companies for more "openness."

Verizon expects devices to be certified for the new open model by late this year. Consumers could buy the phones wherever manufacturers choose to offer them but would deal with Verizon online to set up accounts and monthly bills. They wouldn't have to sign service contracts.

The move could present an opportunity for cellphone manufacturers that are trying to break into the US market. Verizon's move is viewed as a way to pre-empt regulators who have pushed for more open standards, with the backing of technology companies such as Google. The FCC attached "open access" guidelines to some of the airwaves available at a radio-spectrum auction that ended Tuesday. Verizon was a bidder, but it won't be clear whether the company is affected by the new rules until the FCC announces the winners.

Verizon's rivals said its new business model won't give it any special advantage. AT&T already allows customers to buy any phone that uses "GSM" technology for use on AT&T's network. Sprint Nextel is experimenting with the new business models, and cited Amazon's Kindle, an e-reader that downloads books over a Sprint connection. Consumers buy the Kindle from Amazon, not Sprint. (info from The Wall Street Journal)

FCC airwave auction gets mixed results

After 261 rounds of bidding, a government auction of airwaves ended yesterday, raising almost $20 billion from companies hoping to build new broadband wireless networks for next-generation phones and other devices.

Congress expected $10 billion from the auction but was hoping for $15 billion when it directed the agency two years ago to sell airwaves that will be freed up next February, when the US transitions to digital-only television broadcasts. The airwaves are some of the most valuable the agency has auctioned because signals can travel significant distances on them, and go around trees or other obstructions.

It was a record haul but not a complete success for the FCC, which drew some criticism about conditions attached to some blocks of airwaves that might have resulted in lower revenue. One block to be shared with public-safety groups didn't sell and will have to be re-auctioned. Another block, which requires the winner to open its new network to devices or software supplied by any manufacturer, sold for little more than the minimum price.

A look at the winning bids suggests that the agency might have raised more money without those conditions. One block of airwaves, sold in small licenses, brought in a combined $9.1 billion, far more than the minimum $1.4 billion reserve price. The block of airwaves with open-access conditions sold for $4.75 billion, just slightly more than its $4.6 billion reserve.

Google's participation had raised hopes by some that it might win enough licenses to build a competitive national wireless network. However, it is unclear if Google won any airwaves, or if the company is contemplating its own network. The FCC hasn't released names of the winners, and identities may not be released for several days. Companies involved in the auction are barred from commenting on it for several weeks.

This auction could have a major impact on how consumers use wireless services. The FCC's decision requiring winners of one block of airwaves to offer open access -- allow consumers to use any phone or device -- has already prompted AT&T and Verizon to announce that they will allow outside phones on their existing networks. Google had persuaded the FCC to add that condition.

Still, the auction wasn't an unqualified success. One objective was to attract new competition, but AT&T, Verizon and other carriers are believed to have dominated the bidding. The block to be shared with public-safety groups attracted just one bid, and didn't sell.

Failure to sell the block leaves the FCC with several options, none particularly palatable. The FCC could get the highest value in the re-auction by eliminating the requirement that the airwaves be shared with police and firefighters. But that option isn't likely to play well in Congress. The agency could also slash the minimum price for the airwaves or jettison some of the conditions that require working with public-safety groups. (info from The Wall Street Journal)

Qwest boss Nacchio to get new trial

A federal appeals court overturned the insider-trading conviction of Joseph Nacchio, the former chief executive of Qwest Communications, citing a judge's error for excluding an expert defense witness.

The 2-1 decision from the 10th Circuit Court of Appeals in Denver called federal judge Edward Nottingham "wrong" to prevent the expert testimony of key defense witness, Daniel Fischel, a private consultant and former dean of the law school of the University of Chicago. Fischel's testimony as an expert "might have changed the jury's mind," said the ruling, which was issued yesterday. The court ordered a new judge for the trial.

The decision is something of a setback for the government's crackdown on corporate misdeeds that began earlier this decade. But legal experts cautioned that the ruling wasn't a complete win for the defense, as Nacchio could be tried again for the same grounds. The appellate ruling spelled out that there appeared to be sufficient evidence to try Nacchio again.

Last July Nacchio was sentenced in federal court in Denver to six years in prison, after being found guilty of 19 counts of insider trading for selling $52 million of Qwest stock in the spring of 2001 while knowing that his company's finances were in trouble. Judge Nottingham ordered him to pay a $19 million fine and to forfeit $52 million he gained in illegal stock sales. Mr. Nacchio, 58 years old, has been free pending the outcome of his appeal.

Herb Stern, Nacchio's lead attorney, said he was "very pleased and very grateful" for the ruling. "We look forward to the opportunity to fully exonerate Mr. Nacchio of the charges against him. "This is a setback, not a defeat," said Denver-based US Attorney Troy Eid. "The good news is the Circuit Court said our trial team presented sufficient evidence to convict Mr. Nacchio of insider trading."

The appeals-court panel slammed Judge Nottingham's decision to prevent Fischel from testifying as an expert witness, saying he could have swayed the jury with analysis, including whether Nacchio's stock trading was suspicious, among other things. (The defense was able to call him as a non-expert, but his testimony was limited.) The ruling points out that Nottingham hushed a defense attorney on the matter, without hearing his argument in court.

The prosecution occurred in the wake of Qwest's near financial collapse. Formed in the mid-1990s by railroad magnate Philip Anschutz, Qwest -- like other telecommunications companies -- sometimes pumped up revenue by swapping fiber-optic capacity with other companies and interpreting accounting rules so they both could recognize revenue for the capacity they swapped. Investors were outraged when this maneuver was exposed, and Qwest nearly slipped into bankruptcy court. Nacchio resigned in 2002, and the next year Qwest restated two years of results, eliminating $2.48 billion of revenue for 2000 and 2001. Nacchio faces a Securities and Exchange Commission inquiry relating to Qwest's financial problems. (info from The Wall Street Journal)

Court favors Nokia over Qualcomm in patent case

US cellphone technology firm Qualcomm faced another blow in its legal battle against handset maker Nokia earlier this month when a UK judge ruled that its claims over patent infringements are invalid.

The U.K. High Court ruled in favor of Nokia, the world's largest mobile phone maker by sales, saying it hadn't infringed two patents regarding GSM mobile-phone standards. Qualcomm, which has filed 11 lawsuits around the world against Nokia in the past two years, has failed to win any legal action against the Finnish handset maker.

"We are pleased with the Court's decision that the patent claims are invalid and believe it is consistent with and supported by the facts," said Nokia Chief Financial Officer Rick Simonson. "This is the second court to conclude that Qualcomm does not have relevant and valid GSM patents."

Earlier, the US International Trade Commission ruled against Qualcomm's petition for a review of an earlier decision, which said Nokia hadn't infringed three patents, as claimed by Qualcomm.

The two companies have been fighting legal battles for a number of years over issues relating to a patent-licensing agreement which expired in April last year. Qualcomm charges patent royalties to mobile phone makers, which Nokia and some other companies contend are excessive. (info from The Wall Street Journal)

Germany wants refund from Nokia

There was outrage in Germany when Nokia announced in January that it was closing its cellphone plant in the city of Bochum and moving production to Romania. Almost as soon as the announcement came, politicians in the state of North Rhine-Westphalia where the plant is located began considering how they could demand the return of subsidies that had been paid to the company to ensure that jobs at the plant were protected.

The Economic Ministry is expected to formally demand that the company pay back millions in subsidies it received from the state. They also tacked on interest, driving the total amount to $93 million.

The state is claiming that the Finnish phone maker violated the conditions of its agreement for receiving subsidies from the state because it did not create the minimum number of 2,800 permanent jobs at the plant that had been promised under the deal. The company claims it employed an average of 3,200 workers at the plant, but the state says most were temporary workers and that only 2,300 were full-time staff employees.

When Nokia said on Jan. 15 it would close the Bochum plant and open a new one in the Romania city Cluj, the announcement drew national outrage in Germany. Many saw it as an attempt to outsource manufacturing jobs to a lower-wage country. Many began to boycott the company's products in Germany.

Nokia plans to close its Bochum factory for cost reasons and pull out of western Germany's Ruhr region altogether. It claims it has become too expensive for the company to continue manufacturing mobile phones in Germany. Most of the plant's production will be outsourced to the new Romanian plant, where average monthly salaries will be about one-tenth of the average wage of workers at the German plant. Nokia Chairman Olli-Pekka Kallasvuo said that while the Bochum plant was responsible for 6 percent of the company's global phone manufacturing, it was also responsible for 23 percent of personnel costs within its production unit.

In an editorial Handelsblatt speculated that North Rhine-Westphalia is likely playing a game of poker with the Finnish company with its repayment plans. Nokia is currently negotiating payout packages for workers hit by the redundancy, and there are discussions about opening a technology business park that would possibly see Nokia providing financing. The company has officially denied these plans, but they have been widely reported in the media. "That's what this is really about," the paper writes. (info from Der Spiegel)

China may shake up telecom business

China may soon unveil long-awaited plans for a restructuring of its massive telecommunications industry state-run radio reported. If the plan proceeds as outlined in report, it would consolidate China's six big state-run telecom operators into three, with the surviving entities allowed to offer a full-range of services instead of being divided among fixed-line, mobile and other offerings now.

Such a move, which analysts have been predicting in recent months, also could pave the way for the government to issue licenses for advanced, "third-generation" cellular services -- another long-awaited move that could unlock new orders for global equipment vendors.

The restructuring plan would affect some of the world's biggest listed telecom carriers, including China Mobile Communications Corp., parent of Hong Kong- and New York-listed China Mobile Ltd., which boasts more users than any other wireless operator. The parents of two other listed companies, wireless carrier China Unicom Ltd. and fixed-lined operator China Netcom Group Corp. (Hong Kong) Ltd., would likely be merged, while the parent of China Telecom Corp. would absorb one of two wireless networks now operated by Unicom, the radio report said.

The report, broadcast by Central People's Broadcasting Station, is the first official sign that the industry shake-up may come soon. Although details remain unclear, including how various assets of listed companies will be priced, the report suggests that the government is preparing to go ahead.

Restructuring of the state-owned companies has been long anticipated, and could create stronger competition for China Mobile, which dominates China's wireless sector. The move would give wireless assets to the fixed-line operators, China Netcom and China Telecom, whose businesses have been struggling as consumers flock to cellphones. The number of Chinese cellphone accounts jumped by 86 million to 547 million in 2007, while the number of fixed-line accounts shrank by 2.3 million to about 365 million.

The restructuring could lead later this year to the distribution of licenses for third-generation ("3G") technology that lets carriers offer high-speed data services to their users. Those licenses have been expected for years, but have met with repeated government delays, in part because China has been trying to develop a homegrown 3G technology to compete with those offered by foreign vendors. (info from The Wall Street Journal)

Phone company freebies

Years ago, when I had an hour or a week to kill, I’d visit a local phone company “business office” and ask to examine the tariffs: the many volumes of government approved rules that regulate what the telco could and could not do, and what they could charge. I also looked at testimony presented by and against the phone company in “rate cases,” the public hearings where price increases were negotiated.

I found a big difference in the attitude of the employees based on my appearance. If I looked like a college student, I was treated like a vagrant who had come in to get out of a rain storm, and was lucky to be allowed to use a chair. If, on the other hand, I dressed like a banker or an attorney and carried an attache case (even if it was empty), I’d be given a desk to work at, the use of their copier with unlimited free paper, a secretary to be my librarian, coffee or iced tea (depending on the season) and unlimited doughnuts.

The worst thing I ever found was a feeble attempt by New York Telephone Company to justify paying much more money to AT&T, than independent phone companies paid to IT&T, for identical phones.

I also discovered two freebies. There were two things that any phone company customer could have just for asking, and they’d be yours forever, with unlimited free repairs or replacements as needed. I doubt that the deal still applies, but maybe some phone company employee forgot to ask their state government for permission to cancel the deal, so if you have time to kill, put on a suit, and go examine the books.

1. Anyone who had a wall phone was entitled to a free handset hanger-upper, a heavy-duty cast steel bracket that would be mounted next to the phone. If you had to temporarily halt your conversation to answer the door or go to the john, you could put the handset into the bracket instead of letting it dangle.

2. Anyone with a wall or desk phone was entitled to a free shoulder rest. It had two teeth, kind like a rattle snake, which plugged into a socket on the back of a specially designed handset, and could pivot to work on your right or left shoulder. It had a comfortable foam rubber pad, but was not without faults. The snake teeth easily broke off; but at least the repairs were free. I still have a spare, brand new in the original box.

Moto HDTV box shortage hurts Verizon

Verizon has promoted its new FiOS television service by highlighting its high-definition programming. Now the company faces a temporary shortage of the equipment that makes viewing HD possible.

Verizon doesn't have enough high-def set-top boxes and digital video recorders to meet demand. As a result, some customers are being told they'll have to wait to get the equipment.

Verizon blames the shortage on Motorola, the manufacturer of the boxes. Motorola told Verizon that for an undetermined time the company won't be able to supply all the HD boxes that Verizon needs, Verizon says. Verizon said its orders were at the high end of a range of expectations it had earlier given Motorola.

A Motorola spokeswoman confirmed that demand for the HD set-top box was "extremely strong and has exceeded expectations. We are pleased with this positive response and we are working closely with our suppliers to ensure that we meet the needs of our customers as quickly as possible."

It's a hiccup for Verizon, which is hoping its multibillion-dollar, fiber-based TV project will help it battle cable companies that have invaded its turf by offering phone service. Verizon's rivals, both cable operators and satellite TV firms, also market their high-definition services heavily. Verizon had about one million TV customers at the end of the year.

Motorola also sells set-top boxes to many cable operators that compete with Verizon. Cox Communications has also been affected by the shortage. "Motorola worked very closely with us to resolve this quickly and we are satisfied with their efforts," said a Cox spokesman. "This will imminently be a non-issue for Cox customers." Comcast, the biggest cable operator and a major customer of Motorola's, appears to be unaffected. The company has plenty of the boxes, a spokeswoman said.

Verizon appears to be hardest hit. Its delay has been in place for several weeks and affects customers placing new orders for the equipment. The shortage follows a spike in orders for HD boxes during the holiday season, likely a result of consumers receiving new TV sets as gifts as well as upgrading TV sets in anticipation of the Super Bowl. The jump in orders likely was aggravated, ironically, by a promotional offer in which Verizon is giving away high-definition TV sets to new FiOS customers. The offer has been so successful the company has renewed it three times. (info from The Wall Street Journal)

Pissed-off wife burns over 400 cellphones

A desperate Chinese wife set fire to more than 400 brand new cellphones in an attempt to win back her estranged husband's heart, and was arrested for arson.

The woman, identified only by her surname Wang, and her husband ran a successful phone retail business in Weifang city, in the eastern province of Shandong. However, the marriage was on the rocks and the couple frequently fought.

On the evening of March 3, after another bitter battle, the husband slammed the door and left their home. Mrs. Wang was overcome with despair and gathered their entire new stock of phones on the bed, poured kerosene on them and set them on fire before leaving the home.

Neighbors reported black smoke pouring from the home and called firefighters who quickly extinguished the blaze. However, the phones, valued at more than $42,000, were all destroyed. (info from Xinhua news agency)

Over 100 Siemens employees rat-out others

German telecom giant Siemens said it is making headway in identifying executives who were responsible for bribes-for-business schemes thanks to leads generated by an employee amnesty program. The program, which was offered to all employees except 300 top executives, prompted about 110 employees to offer information about alleged wrongdoing.

The advances come as Simens hopes to start negotiating a settlement soon with US authorities, who are investigating Siemens under the US Foreign Corrupt Practices Act. A German court already fined Siemens $306 million in October for bribing government officials in Nigeria, Russia and Libya to win business contracts.

Siemens has identified billions in suspicious transactions between 2000 and 2006 in what could prove to be the biggest corporate-bribery case ever. German prosecutors identified dozens of suspects since a raid of Siemens's headquarters in late 2006 but have indicted only one former company executive so far.

The German conglomerate hasn't publicly identified top managers who facilitated illicit payments, despite hiring a US law firm to investigate. Under the amnesty program, lower-level managers and workers were encouraged to share evidence of wrongdoing without fear of reprisal from the company. That evidence could lead investigators to decision-makers higher up the corporate ladder.

Many German employees initially were reluctant to act as informants because that evoked memories of the methods used by the Nazi and East German secret police years earlier. Gradually, they recognized that allowing crimes to persist is a form of aiding and abetting.

The scandal is shaping up as a landmark case in the US where the Justice Department and the Securities and Exchange Commission could impose stiff fines and sanctions against Siemens. (info from The Wall Street Journal)

ATT&T spy suit goes back to teenager in 1950s

Behind the scenes in the tussle over whether telephone companies can be sued for cooperating with warrantless government surveillance is computer engineer Tash Hepting.

Hepting, of Hepting v. AT&T, had remained silent as Washington debates immunity to phone companies, which would kill this lawsuit and the 37 others. Hepting now says he filed suit, with the help of the Electronic Frontier Foundation, a civil-liberties advocacy group, largely because of the experiences of his father, Rick Hepting, a short-wave-radio enthusiast in the 1950s and 1960s. The elder Hepting was told by the feds that it was reading his mail because he had made contact with a Chinese radio station.

As a teenager, the elder Hepting collected QSL cards that acknowledged contact with other radio stations. He was thrilled to receive one from a Chinese radio station he heard.

He also began to receive Chinese communist propaganda. Not long after, he received notification from the feds that his international mail was being read.

Hepting says he became interested in the recent government activities after reading about the National Security Agency's warrantless surveillance. He said he grew concerned that the effort was sweeping up communications of many customers of the big telephone companies like AT&T, of which he was one.

Hepting reflected on his father's experience. "It has a chilling effect," he said. "A real impact when you realize that something completely innocuous and innocent can get you monitored and surveilled by the government."

Hepting and the other plaintiffs charge that AT&T gave the government access to its facilities and databases and discloses to the government the contents of its customers' communications as well the records of millions of customers. The US government and AT&T have sought to quash Hepting's case by arguing that it will reveal national security secrets. They argue that Hepting and his fellow plaintiffs don't have standing because they can't prove their communications were collected. (info from The Wall Street Journal)

Verizon promo too successful; can't get enough TVs to give away

Customers who signed up for Verizon's FiOS service and are waiting for a free Sharp hi-def TV will have to wait a little longer. Verizon can't get enough of the TVs to meet demand and alerted customers that they will have to wait 10 to 15 weeks -- five weeks longer than previously promised.

As an alternative, Verizon offers customers a similar-model Magnavox TV or a $200 gift card for Best Buy, which would arrive much sooner. Because of the Sharp delay. Verizon changed its promotions in December so that it no longer promised Sharp.

Verizon's FiOS service delivers high-speed Internet, television and phone service via a fiber-optic line connected directly into the home, and has had strong demand, partly driven by its aggressive promotions and door-to-door sales. As a result, the company has taken market share away from its cable competitors and as of the end 2007 had 943,000 subscribers.

The growth has come with problems. Verizon also faced a delay in getting HDTV set-top boxes, which it blamed on vendor Motorola. The shortage came after a spike in orders during the holiday season. Other companies that use Motorola boxes were unaffected. (info from The Wall Street Journal)

Sprint loses even more, values Nextel near nothing

Sprint Nextel announced a huge fourth-quarter loss of $29.5 billion as it wrote down most of the remaining value of its 2005 purchase of Nextel and continued to lose customers to competitors. Chief Executive Officer Dan Hesse, who was hired in December to turn the nation's third largest wireless carrier around, said the quarter was more difficult than he had expected and it could be some time before proposed operational changes have any effect.

Sprint reported losing $29.5 billion, or $10.36 per share, during the quarter ending Dec. 31. By comparison, Sprint Nextel earned $261 million, or 9 cents per share, during the same period a year ago.

The company said last month it would likely have to write off most of the remaining $30.7 billion in goodwill value from the acquisition of Nextel and a number of affiliates. Sprint Nextel has struggled since the purchase, plagued by technical problems, unfocused marketing and a difficulty in merging the two companies' work forces into a cohesive whole.

Not including the write-down and other one-time charges, the company said it would have earned 21 cents per share before amortization, which was higher than the 18 cents per share expected by some analysts. Revenue during the quarter slipped 6 percent to $9.8 billion from $10.4 billion a year earlier.

The company reported a net loss of 108,000 subscribers for the quarter as an increase in customers through its Boost prepaid brand and wholesale channels partially offset a loss of 683,000 subscribers who paid a monthly bill — considered the most valuable. Quarterly postpaid churn, or the measure of these monthly customers dropping service, remained level at 2.3 percent and the average revenue per user declined about 4 percent from a year ago to $58. Ooverall wireless revenues declined about 6 percent to $8.5 billion.

Sprint announced last month that the company would lay off about 4,000 employees, or 6.7 percent of its work force, and close 125 retail locations. The company's shares have fallen more than 51 percent in value in the past year. For the year, the company said it lost $29.6 billion.(info from The Associated Press)

Judge reverses Wikileaks censorship decision

Free speech advocates hailed the decision on Friday of a federal judge to withdraw a prior order turning off the Web address of Wikileaks.org. But the reasoning of United States District Judge Jeffrey S. White also means that the court may dodge having to grapple with some of the First Amendment questions posed by the case and touched on repeatedly at a lengthy hearing.

The lawsuit, brought by a Swiss bank and its Cayman Islands subsidiary against Wikileaks and Dunadot, the registrar for its url, became a cause célèbre for organizations like the American Civil Liberties Union, Public Citizen and the Electronic Frontier Foundation. They responded with a barrage of court filings after the order signed by Judge White that required Dynadot to disable the Wikileaks.org address, making it more difficult – but not impossible – for Internet users to get to materials published by Wikileaks.

The bank, Bank Julius Baer & Co., claimed that Wikileaks had displayed confidential, personally identifiable account information of its customers, as a result of possibly criminal actions by a former employee. Lawyers for the bank told Judge White that Julius Baer clients had a right to keep their account information private and that there was no compelling interest to justify their disclosure. In this way lawyers for the bank set up a conflict between freedom of speech and the right to personal privacy.

The judge and the lawyers also struggled mightily to define Wikileaks, which defines itself as “founded by Chinese dissidents, journalists, mathematicians and startup company technologists, from the US, Taiwan, Europe, Australia and South Africa.”

Traditional entities, like companies and individuals, have citizenship status that can determine when they are subject to a particular court’s jurisdiction. But what is Wikileaks, which has not been represented by a lawyer throughout these proceedings? “Whatever this entity is, it has not filed a response,” Judge White observed.

Paul Alan Levy, a lawyer for Public Citizen, argued that the bank had brought more publicity to the documents on Wikileaks by filing its lawsuit and obtaining the order affecting the site’s domain name. Under such circumstances, Levy asked the judge, “Should you give them any relief to help them unring the bell?” The question implicitly was whether the victims of public disclosure on the Web have any shot at redress.

After hours of discussion that suggested the judge’s level of concern with reaching the correct outcome, Judge White looked unhappy that he could not think of a way to help the bank customers affected by the release of the documents. But he said that he feared the initial order suspending Wikileaks.org raised serious questions of unjustified prior restraint on free speech, and that in any event, once the documents were online, the court might well be powerless. “Maybe that’s just the reality of the world that we live in,” Judge White said. “When this genie gets out of the bottle, that’s it.” (info from The New York Times)