CINCINNATI BELL, A BROADWING COMPANY

Transcription

1 , a Broadwing Company VIDEO DISCUSSION GUIDE MONOPOLY & COMPETITIVE MARKETS CINCINNATI BELL, A BROADWING COMPANY Overview Local telephone, long distance and wireless service. Directory assistance. Data. Broadband and other Internet services.telephone equipment and accessories. Telephone Company, a subsidiary of Broadwing Inc., is a provider of telecommunications goods and services to a 2,400-square-mile area of Southwestern Ohio, Northern Kentucky and Southeastern Indiana. Founded in 1873, was one of the early local telephone systems in the United States and one of just two of the Bell systems not originally owned by the American Telephone and Telegraph Company (AT&T). Since the breakup of the AT&T telephone monopoly in 1984, Cincinnati Bell, other telephone companies and the entire telecommunications industry have undergone continuous change.without the protection of the monopoly status and with new competition in the market, players in the telecommunications industry have experienced the market forces of competition that have led to the creation of new products and reduced costs. Competition has changed how companies do business. This video program takes a look at and how the company has weathered the change from being a local monopoly to a worldwide competitor. employees talk about how the changes have made the company better and greatly improved telecommunications services to its customers. Vocabulary Review the following vocabulary words.their definitions can be found in the Glossary, located in the Resources section of Producing Ohio: Creating Our Economy. Competition Demand Entrepreneurship Innovation Market Monopoly Productivity Substitutes Wants was the first company in Cincinnati to provide direct communication between the city s homes and businesses. 191

2 VIDEO DISCUSSION GUIDE, a Broadwing Company Introduce Q: How many times a day do you hear a telephone ring? A: Students answers will vary. Generate student discussion about how people depend on telephones.there should be some interesting ideas and thoughts about the convenience and the annoyance of telephones. Q: Did you know that, not long ago, there was only one telephone company that provided phone service to Cincinnati and that there was just one, very large company that provided both the telephone service and the telephones themselves to most of the rest of the United States? Did you know that there used to be just one type of telephone a big, heavy, usually black, telephone? A: Provide students with a brief history of the Bell telephone system. See Teacher Page: History at the end of this discussion for reference. Part I MONOPOLY Define the term monopoly. Consumers benefit from competition because it keeps companies on their toes, making sure that they re providing the best value for the dollar for each and every customer. Don Daniels Vice President of Marketing for the Consumer Markets, Monopoly: A market with only one producer or seller. Also called a monopoly market. Q: Why did the government break up the AT&T (Bell Telephone) monopoly? A: Explain that, without competition, prices were high and there was little incentive to improve services. Q: How did the breakup of AT&T affect Cincinnati telephone customers? A: was an independent company, not part of the AT&T system.therefore, Cincinnati was not as affected by the breakup as other areas of the country. had a monopoly in Cincinnati because of state government regulations. Part II PRODUCTIVITY Q: How did competition change and the other telephone companies? A: When there was no competition, there were few reasons to develop new products. After the breakup of the monopoly, however, there were incentives to develop new products. 192

3 , a Broadwing Company VIDEO DISCUSSION GUIDE Q: What incentive did competition provide? A: The incentive was to provide customers with the best goods and services possible, because other companies might develop better products and take away consumers. Q: In the video, what do researchers ask the consumers? A: They ask what consumers problems are. Researchers want to gather information that will help companies develop products that solve the consumers problems and products that the consumers will pay for. Q: Mike Vanderwoude said, At the end of the day, customers are going to stay with companies that solve problems for them and bring perceived value. What value is he talking about here? A: Consumers value companies that best satisfy their want for telephone services. Part III FACTORS THAT DETERMINE DEMAND Q: What telephone services do consumers want? A: Answers may vary.the want is to be able to communicate easily with others. Discuss ways this want is met, such as quality of service, no interruptions, clear sound and ease of use. Product development is essentially the process of measuring customer demand for different features and functions and creating services that meet those needs. Mike Vanderwoude Vice President of Product Development and Product Management, Q: How do telephone companies know what consumers want? A: Through research, companies find out if consumers want services such as Call Waiting, Caller ID, long distance service, Internet service, etc.they ask consumers questions, create products that address the responses they get to the questions and market the products to potential customers. Q: What are substitute products? A: Two or more goods or services that can satisfy the same want. Q: What is a substitute for a regular telephone? A: Wireless telephones satisfy the same want as regular telephones. Q: Don Daniels said that has benefited from competition. How? A: s new services, like long distance, wireless and Internet services, have given the company more customers and more income. 193

4 VIDEO DISCUSSION GUIDE, a Broadwing Company Part IV ADVANTAGES OF COMPETITION Q: In the video, how does John Girton say competes? A: competes by providing better customer service. Q: Why do you think, when there was no competition in the market, it took a telephone company two days to turn on someone s service? A: When companies do not have to compete, there is little incentive to improve service. The consumers had no choice.there were no substitutes no other products or services to satisfy the want for telephone service. Q: What determines what the consumers will demand? A: Demand is determined by what consumers want (their tastes and preferences, what they are willing to pay for), their income and the availability of substitutes (other products that will satisfy their wants). The customer is the basis of what we do. That s the heart and soul of the company. If it weren t for the customer, there wouldn t be a. John Girton Customer Service Manager, Q: How does know it is doing a good job satisfying its customers wants? A: Because wants to find out how to maintain its customers loyalty, the company asks for customer feedback and responds to the information it receives. Part V INNOVATION Q: Why did get into the Internet business? A: The Internet business was similar to the other services already provided. Many people were using the Internet. did not want to fall behind the competition. Explain that ZoomTown was an innovation, a new economic use for Cincinnati Bell s product its telephone lines. Define the term innovation. Innovation: The introduction of an invention, a product, into a use that has economic value. Q: What did do before it decided to start providing Internet services? A: The company made sure that it knew what consumers wanted and what consumers were willing to pay for. Q: What two things did Kurt Frehner say contribute to s ability to innovate? A: First, s corporate culture encourages the company s employees to be creative and innovative. Second, the fact that the company has strong competitors forces to become better and deliver new products. 194

5 , a Broadwing Company VIDEO DISCUSSION GUIDE Conclude Q: What do you think is the most important factor that determines what does? A: The company understands the need to make products that consumers want. Explain that companies make a profit and employees earn incomes when they produce goods and services that consumers want and that consumers are willing to pay for. That is what creates consumer demand. Q: What kind of telephone services do you think people will want in the future? If you worked for, what products would you be trying to develop? A: Encourage thinking about future products and services that people will demand to solve their problems and satisfy their wants. Activity To further students understanding of the concepts of monopoly and competitive markets presented in this video, have the class discuss the communications products they would like to see in their future. Students can design a new product for. Students can create an advertisement for their new product. Students should explain who will want their new product and why. Repair supervisors are always watching the weather in order to anticipate the repair load each day. 195

6 VIDEO DISCUSSION GUIDE, a Broadwing Company TEACHER PAGE HISTORY 1873 Charles Kilgore establishes The City and Suburban Telegraph Company, providing telegraph services to homes and businesses in Cincinnati Alexander Graham Bell invents the telephone. On March 10, 1876 in Boston, Massachusetts, Bell makes the first telephone call, phoning his assistant,thomas Watson, in the next room saying, Mr. Watson! Come here! I want you! 1877 The telephone is first demonstrated in Cincinnati by a representative of the Western Electric Company. s very first telephone service customer is the Cincinnati Gas & Electric Company Cincinnati s first telephone switchboard is installed. All of the operators are boys.the company name is changed to The Cincinnati and Suburban Telegraph Association and Telephone Exchange Charles Kilgore purchases a franchise from Western Electric to sell telephone service within a 25-mile radius of downtown Cincinnati. Western Electric receives 20% ownership of the company operates as a regulated monopoly, providing local to 1984 telephone service.the American Telephone and Telegraph Company (AT&T) provides long distance service. Local Bell telephone companies owned by AT&T provide local services to most of the United States. Independent companies, like, exist in some areas The touch-tone phone is introduced, replacing the round, rotary-style dial phone The Supreme Court rules that AT&T is a monopoly, unfairly restricting telephone service competition.the company is broken into seven regional Baby Bell companies.the ruling does not substantially affect s customers, since it is only 20% owned by AT&T. Since becomes a more competitive company, continuing to 1984 provide local telephone service, but also now providing long distance, Internet and wireless phone services acquires IXC Communications, Inc.The merged company becomes Broadwing, Inc., with remaining as the name of the local telephone service company. 196

7 , a Broadwing Company VIDEO DISCUSSION GUIDE, a Broadwing Company ECONOMICS AT WORK From wind-up to rotary to touch-tone to wireless to public payphones the telephone industry has been bringing the people of the world together since That year, Alexander Graham Bell made the first phone call to his assistant, Thomas Watson. It was the start of a communications revolution. provides a wide range of telecommunications goods and services in the greater Cincinnati, Ohio area.the area served by the company includes portions of Ohio, Kentucky and Indiana and covers more than 2,400 square miles. provides services to both business and residential customers. Innovation is key in the competitive telecommunications industry. launched dial-up Internet access in 1995 and high-speed Internet access in Customers can now connect to the Internet through modems or through a high-speed ADSL service called ZoomTown. ZoomTown ADSL is a technology that allows the consumer to obtain high-speed access to the Internet over existing copper phone lines, without buying another phone line. ZoomTown uses special technology to separate voice signals from high-speed data signals, allowing the consumer to make voice calls while also using the Internet on the same line, at the same time. ADSL Internet service is up to 50 times faster than regular modems. is a division of Broadwing Inc., a company headquartered in Cincinnati, Ohio. s Goods and Services Local telephone service, as well as calling services, such as Caller ID and Call Forwarding Long distance Cordless and wireless phones Caller ID boxes Wireless telephone service Internet access Home security Directory assistance and phone books Payphones Internet Resources STUDENT PAGE 197

8 VIDEO DISCUSSION GUIDE, a Broadwing Company STUDENT PAGE Wacky Facts The City and Suburban Telegraph Company (ultimately ) was founded on July 5, : First coin operated telephone in Cincinnati. 1907: First Yellow Pages Directory published. 1909: bought its first automobile a major advance for repair service. 1928:Telephone cable laid on the bottom of the Ohio River to provide telephone service to Covington, Kentucky. 1971: Company name changes to. Spring through fall is the busiest time of year for repair volume. Rain, lightning, humidity, heat, wind and quick changes between heat and cold can cause damage to exposed telephone lines and plastic insulation on conductors. Repair supervisors are always watching the weather in order to anticipate the repair load each day. One group of technicians is in charge of repairs and a different department s technicians are in charge of installations. 198