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History of A Telco, A Fairy Tale
   
Once upon a time some guy invented the telephone.  The telephone was good and everyone wanted a telephone.  Lots of entrepreneurial types wanted to offer telephone service because they figured they could make lots of money because everyone wanted a telephone.  

The telephone became very important and the government decided the market required their influence so everyone got a fair deal.  So they invented the idea of a regulated monopoly.  They would let telephone companies operate as a monopoly in a region but they would set the pricing and the amount of profit the telephone company (Telco) could return to their investors.  And most people involved were happy, for the time being anyway.

Running a regulated monopoly was not overly time consuming so the executives started thinking of ways to wring more money out of this regulated monopoly system.  If an executive could find a way to put a different spin on the accounting they would be allowed a higher rate of return and more money could be returned to the investors.  The executive could take his plan to the boss and the boss would be impressed and he would get a promotion and an increase in his/her annual incentive bonus.  And this was good for the executives and good for the Telco and good for the investors but bad for the rate-payers - luckily they would never know though.

Another executive looking for a new way to get his promotion and bonus decided to try lobbying the government people responsible for the regulated part of their business.  It was quickly realized that buying a few meals and a few other perks could get the regulators to approve accounting changes, rate increases, and basically allow the Telco to make more money.  And this was good for the executives and good for the Telco and good for the investors but bad for the rate-payers - luckily they would never know though.

The Telco grew very big and employed lots of people.  Some were promoted and supervised other workers.  Some of these supervisors should not have been promoted as they were not nice to their workers.  The executives of the management team were too busy trying to figure out ways to get promoted and make more money so they failed to notice the supervisor was not treating his workers fairly.  The workers got mad, they went home frustrated, they complained to anyone who would listen.  Soon someone got the idea that they should start an union to get the Telco to treat them fairly.  The executives of the management team were so busy figuring out ways to get promoted and make more money that they just let it happen rather than deal with the source of the problem. And this was good for the executives and so-so for everyone else except the rate-payers - chances are they will never notice the difference.

The Telco still didn’t treat their workers well so the union became stronger and stronger.  Soon the unions were so mad at management that they started making more and more outrageous demands, higher salaries, restrictive work designations, demands that would significantly increase the costs of the Telco.  The executives of the management team were worried, how would they get their promotions and bigger bonuses now?  One executive quickly realized that this union problem was in their best interest.  Fighting it would be difficult and the executives would probably not sleep well.  If they gave the unions everything they want they would increase their costs and the amount of money which could be returned to the investors.  And this was good for the executives and good for the Telco and good for the investors but bad for the rate-payers - luckily they would never know though.

Then came the day both the management team and the union dreaded.  Out with the regulated monopoly and in with competition.  A new breed of executives now existed in the management team who were willing to deal with the union.  The union was informed the gravy train would soon be over and reality would rule as the Telco would be changing their business model.  The union was horrified, what were they to do?  The union by this time was huge and they too had executives.  These executives wanted promotions and pay increases too and they would not get them if the business model changed.  So they thought why don’t we just lobby the regulators just like the Telco.  They soon found they could buy support for their cause with mere trinkets.  These executives also decided to tell the rate-payers that their world would never be the same,  Fear, Uncertainty, & Doubt (FUD), with deregulation and the rate-payers listened, at least a little anyway.  The regulators were persuaded to change the terms of deregulation to benefit the Telco and their unionized workers.  By this time everyone at the Telco was unionized except the executives of the management team.  The unions were happy, the Telco was happy, and the rate-payers would hopefully never know what this maneuver cost them.  

The End
 


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© 2002  The Twelve Year Old Kid From Across The Street
December 31, 2002