Solving AT&T’s Ballooning Problem

I recently gave a speech to a group of AT&T executives in a university MBA program, and during the Q&A afterward I got a very interesting question about the future of the AT&T brand. It grew into an interesting and important discussion that I’d like to share here.

The questions after speeches this year were astounding. Talking with folks at events all around the country tells me AT&T may have a brewing problem it needs to address, and quickly. But to tell you the truth, I am not even sure the company is aware of it yet.

The conversation after my recent speech focused on important after-merger issues that have apparently been simmering among the workers over the last few years. I see this as a real threat that AT&T should address quickly before it causes trouble.

Let’s pull the camera back for a moment to get a good understanding of the problem. The AT&T of today is not the same company it was just a few short years ago. In the 1990s, AT&T was the largest long distance giant. It acquired the largest cable television company and operated the largest wireless company as well.

Over the next several quarters, it realized the merger was not working, so it quickly broke the company apart, spinning off the wireless business and selling the cable television business to Comcast. AT&T was losing its consumer long distance customers to the baby bells, so all it had left was a smaller business services company.

In the mid 2000s, SBC — the smallest baby bell — acquired AT&T, Bellsouth and Cingular. Suddenly there was a distinctively different company.

What’s in a Name?

I remember getting a phone call from an SBC executive asking my opinion about the name. The company was trying to decide whether to keep “AT&T” or create a new name? I said there was no choice. The AT&T name and brand was tired, but was still the strongest and best-known brand in the industry. There was no choice but to keep it.

However, I said, the new company would have to update the old name. Revive it. Reinvigorate it. Give if a youthful energy and have it mean everything that was great, that is great, and that will be great going forward.

AT&T used to be a long distance company. Now it provides local services, wireless, Internet, television, and so on. Its competition has changed as well. It used to compete with MCI, Sprint and the baby bells, but now it competes with Comcast, Time Warner and Cox — and every wireless carrier as well.

SBC’s decisions and actions at the time of its transformation were terrific. It changed the name of the company to AT&T overnight. Its quick action was a brilliant move, and it made it look as though everything was completely under control. The company’s leaders were hitting home runs. It was the start of a beautiful time of peace and harmony — but something would start bubbling beneath the surface.

While the waters were calm at sea level, underwater things got increasingly chaotic. Tiny SBC had suddenly morphed into the very large AT&T. Everything changed — and as I’m learning, it was not all for the better. “Overwhelming” became the catch-word for AT&T workers.

Over the last few years, AT&T has become larger, colder and much more distant to everyone — including workers, investors, analysts and the media. That is a part of the problem.

The new AT&T started out as a glass that was half full a couple years ago, but is starting to become a glass half empty.

The major companies that were rolled into one have all been forced to change. They lost their senior executives, and the new and now very large AT&T was being run by the SBC execs — and even many of them had changed, including the CEO that pulled all this together.

When this new AT&T was being formed, it was still run by longime SBC CEO Ed Whitacre. It is now run by CEO Randall Stephenson. Wrapping his arms around this enormous new company is obviously quite the challenge. I don’t know if it could be done any better than it has been to date, but there are still problems that need to be fixed — and quickly.

Turbulence Hasn’t Settled

Temporary chaos is expected after every merger, but it’s been several years since this one took place. I think one of the problems is that it was not just one large merger — several large mergers were occurring at once. Remember, it was SBC acquiring AT&T, Bellsouth and Cingular, and suddenly putting them all under one roof.

The rugs of tens of thousands of workers were suddenly ripped from underneath them. They no longer knew the path to success. That uncertainty remains. Things are bigger and better from one perspective, but much worse from another.

I hear from customers in the old Bellsouth region that customer care has fallen. Bellsouth had the best reputation for customer care in the nation among the seven baby bells, but after being acquired by AT&T, all that has changed. Now customers are frustrated, which is becoming a bigger problem.

True, the industry is getting more complex, andcompanies are dealing with many competing and conflicting challenges — but one thing is for sure: You have to give your customers golden care, or you will lose them. Customers have choices today.

On the surface, things look under control, but chaos is starting to bubble up. The former SBC execs have to handle the immense pressure of a much larger job.

After moving the HQ from San Antonio to Dallas, the company has had little time to breathe and think over the last few years. Everyone has been under enormous pressure. It is starting to take its toll — and it’s still building.

I have heard from several employees that AT&T used to be a fun place to work, but no more. Now it’s just tough. That lack of enjoyment and enthusiasm will hurt the company if it doesn’t turn things around.

I’ve noticed the change personally over the years. I remember meeting Larry Solomon in the middle 1990s. He was head of corporate communications for SBC at the time. That was back when the company looked and acted differently — more relaxed and closer with customers, employees, analysts and the media. There were seven smaller baby bells and three big long distance giants, and I worked with them all. It was a very exciting time for everyone. The sky was the limit.

Larry was one if the most approachable, nicest and most effective corporate communications persons in the industry. Don’t misunderstand — they all fall all over themselves when I email or call with a question, but SBC was noticeably attentive and responsive in many different respects — better than most.

Cold and Distant

During the last few years, things have changed. I haven’t talked with Larry in a long time. AT&T sends press releases and emails on a regular basis, but the valuable two-way communications have suffered. Unless it wants to reach out to brief me on something, I have very few communications with the company. It has become a fortress with tall, thick walls. Everything is very official.

When I have a question, I have to go through an annoying and time-consuming process rather than just sending a quick email and getting a quick answer. Very different.

Compare this to the other competitors, who still make sure they are very close with me, which is as it should be. Other analysts say the same thing. This approach makes our jobs much more difficult, and it may backfire on the company before long.

Apparently, AT&T workers have noticed this too. When I talk with the employees at every level, from various parts of the company, I hear the same thing. They want AT&T to thrive, but things have just not been right for the past few years. It’s as though everyone hears a bad sound coming from the car, but no one is fixing the problem. Eventually, the fast-moving AT&T may break down on the side of the road, and then its leaders will start trying to figure out what went wrong, but it will be too late.

They are still flying high today. They are still executing well — and if they can correct this problem, they will be fine. However, I have not seen any corrective action in the works.

The problem is that AT&T has lost so much in the process of changing over the last few years. Does anyone there even know it yet?

I understand what has happened. Things had to change at AT&T. The company quickly grew from the smallest to the largest baby bell, next to Verizon. It has a new CEO and a new HQ in a new city. Thanks to its new larger size, it has to digest the acquisitions and get everything under tighter control.

Maybe its executives can no longer have casual conversations like they did when they were part of the smallest company. Now that they are running one of the largest, they have reporters listening to every sound they utter and ready to write.

The world has changed for them too. However, distancing themselves from the marketplace may feel better in the short term, but it will eventually hurt them — with their workers, their investors and their customers, not to mention the media and analyst community.

I think everyone wants to see AT&T do well. It impacts so many workers, investors and customers. This problem is solvable. However, it is real and it is getting worse. AT&T needs to recognize and fix it.

has announced it will start selling its iPad through Verizon Wireless on Oct. 28, just in time for this year’s holiday season. The loss of the exclusive must pinch AT&T to no end.

Pricing will be essentially the same. Verizon’s offering includes a MiFi connector since the iPad is not yet compatible with its network.

The iPad is quickly growing in popularity, and I expect to see all of the wireless carriers bringing many similar devices to the market shortly.

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at [email protected].

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Why the Real Estate Industry Should Embrace the Cloud

The increased adoption of cloud computing over the past decade has enabled businesses across industries to meet their growing technology needs while efficiently gaining access to exciting new tools.

However, not every industry has kept up with the evolution of cloud technologies brought forth by digital transformation. A prime example is the real estate industry. Overall, the real estate sector has been slow to digitize operations and move to the cloud; leaving agents, brokers and their clients underserved.

Cloud computing can cover a lot of ground, with both infrastructure-as-a-service and software-as-a service availability. There is great potential for the real estate industry’s future in both areas.

When properly implemented, cloud computing accelerates the innovation and digitization of real estate services, bringing new apps and tools to the market more quickly. This also adds even more value to the buying and selling experience for agents, brokers and consumers alike.

While the cloud offers much potential for the real estate industry, it is important for companies to have an informed idea of what they want to accomplish before moving some or all their IT functions to the cloud. Don’t just jump on the cloud bandwagon; instead, determine what goals you want to achieve by moving to the cloud and develop a plan for an orderly transition.

If a company’s cloud infrastructure ends up looking exactly like its previous on-premises setup, it’s probably not taking advantage of all the benefits the cloud can offer. Real estate companies moving to the cloud need to think strategically about adding value through the transition.

With that caveat, there are tremendous benefits for real estate companies that move to the cloud.

More Data, More Power

A seemingly immense obstacle real estate companies face is the daunting task of implementing cloud-supportive infrastructure. But the truth is that real estate companies don’t have to plan, build, or operate their own data centers.

Instead, the cloud infrastructure providers can set up and maintain the infrastructure while real estate companies focus on what they do best: selling properties, serving customers, and equipping agents and brokers with the best tools to help them do their jobs.

Cloud infrastructure also offers real estate companies the computing power to run modern tools like data analytics and artificial intelligence. These technologies can help real estate companies find new customers, identify people likely to be interested in buying or selling their homes, and match customers to the best real estate agents to service their needs.

Real estate organizations often have access to huge amounts of market and customer data. However, the sheer volume of data makes it difficult to capitalize on. With cloud computing, real estate companies can gain access to the massive computing power needed to crunch the data, while paying only for the time they use that infrastructure.

Mobility and Disaster Recovery Solutions

Another benefit of storing data in the cloud is that it’s accessible from various devices, which is a boon for the growing mobile workforce. Agents, brokers, and home buyers and sellers are increasingly using smartphones and tablets to get work done remotely. The cloud is much more flexible, accessible, and secure than being tethered to a physical hard drive or on-premises server.

Furthermore, companies that transition to the cloud don’t have to build and maintain a remote disaster recovery site, which can be labor-intensive and time-consuming. Instead, critical data in the cloud automatically fails over to a secondary site in the event of a disaster. All that is required to access data in the cloud — anytime, from multiple devices, anywhere — is a solid internet connection.

Budget-Conscious Security

Major cloud infrastructure providers have a security track record that most real estate companies can’t compete with. They have huge teams of security professionals and the best available security technologies, policies, procedures, and controls to protect the information on their servers and data centers 24/7 with little or no human intervention.

Cloud security measures also support regulatory compliance and establish authentication rules for users and devices. This high level of data security is particularly important in the real estate industry, with customers sharing banking and other personal data during what’s often the largest financial transaction of their lives.

Customers want their real estate transactions to be as secure as possible, and cloud infrastructure providers offer that higher level of protection.

Creating an Open Ecosystem

On the software-as-a-service side, the cloud is the perfect way to host multiple apps and software tools that improve agents and broker productivity. One way to approach this is through the development of a real estate app store that includes a range of software, including CRM tools, lead generation software, open house apps and productivity tools, with everything hosted in the cloud.

In doing so, this creates an open ecosystem, where agents and brokers have a choice of software tools to use, including some apps developed in-house and others from third-party partners. The cloud enables an open ecosystem in which agents and brokers simply decide which apps they want to use from a menu of options available. This provides flexibility while also empowering personal choice and customized solutions for home buying and selling and beyond.

Convenience Is the New Normal

The Covid-19 pandemic has forced real estate companies to conduct more business remotely, with documents shared online. Some firms have been moving a greater number of transaction steps to the virtual realm, using cloud-based services to host and gather documents and collect signatures.

While some customers will continue to demand face-to-face contact with agents and brokers, a significant number will embrace the convenience of a mostly online, cloud-based approach.

The industry is already seeing great benefits from cloud computing. Expect many more advantages to reveal themselves as the industry continues to digitize its operations.

Too often, we see that the failure to innovate today equates to playing catch-up tomorrow. The benefits of cloud technologies for real estate services professionals are clear, and the obstacles of price and infrastructure are entirely surmountable.

Business and information technology leaders in this industry must look beyond outdated legacy systems and begin embracing the cloud — now.

Rizwan Akhtar is executive vice president, chief technology officer of business technology, at Realogy. Akhtar holds an M.S. in Computer Science from the University of South Asia and an MBA from the University of Phoenix.

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Marketers: Beware Florida’s Mini-TCPA

If you do electronic marketing of any kind, you’ve been a captive audience to the ever-changing requirements of the federal Telephone Consumer Protection Act, known familiarly as the “TCPA.” But now, the state of Florida has amended its Telemarketing Act, creating what is being called the “Mini-TCPA.” Florida’s new law changes electronic and telemarketing in significant ways — even if you’re not in Florida.

Years of litigation over the federal TCPA has taught most companies to understand the different forms of consent, how to distinguish sales calls from informational calls, what kinds of call could legally gather information from consumers without straying into highly restricted “sales calls,” and what in the world constitutes an automated telephone dialing system (ATDS).

Now, just as we thought the law was settled — or at least settling — the new Florida state law overturns the apple cart. Many of our prior understandings are out the window. Telemarketing practices will have to change substantially, and the costs of violating the Florida law will be substantial.

Law Applies Even if You Don’t Do Business in Florida

The new statute covers any call made to any device with a Florida area code no matter where the receiving phone is located, and calls made to a person who happens to be in Florida at the time they receive a covered call.

In either case, the calling company will be considered to be “doing business in Florida” and therefore subject to the Mini-TCPA. That’s true even if the calling company has no way to know that these seemingly non-Floridian numbers in fact have some relationship to Florida.

In either scenario, there is a “rebuttable presumption” that the calls are covered by the Florida statute. “Rebuttable presumption” means as a practical matter that government regulators or class action plaintiffs can make you spend lots of money in attorney’s fees trying to prove that the calls weren’t covered.

For economic reasons, many businesses will end up making the business decision to settle these cases rather than litigating the law’s application to them.

Role of the ‘Private Right of Action’

The big danger presented by this statute is the claims that may be made by private parties, not government enforcement actions. That’s because the new Mini-TCPA contains a “private right of action.” Any consumer can sue you claiming you violated the statute. Those suits can be class actions, real or threatened.

Although the statute appears to limit recoverable damages to a maximum of only $500 per violation, that figure is a red herring for a couple of reasons. Plaintiffs tend to claim that each individual call to their phone is a separate violation. One consumer’s calls can quickly become multiple violations and therefore multiples of $500.

In addition, under some circumstances, the law trebles damages. The Mini-TCPA provides for triple the damages and attorney’s fees if the violation was intentional. Since marketing and informational calls are both generally the result of a pre-planned marketing campaign, every call is going to be asserted to be intentional.

Moreover, general Florida consumer law allows recovery of attorney’s fees and, potentially, statutory additional punitive damages.

The ATDS Rabbit Trail

All the noise generated by litigation around the federal TCPA about automated telephone dialing systems may have given businesses the impression that if you avoid using particular kinds of ATDS, you can be sure of avoiding liability. But here again, Florida’s new law changes the game.

Instead of diving into the controversy over what constitutes a covered ATDS machine, Florida simplifies the issue — and expands the danger zone. The new statute focuses its attention simply on “automated systems.” The definition of “automated system” under the Mini-TCPA is much broader than the federal TCPA’s.

As defined by the Mini-TCPA, it encompasses any system that does any one of three things: it either selects the persons to be called, or it dials calls, or it plays recorded messages. It’s hard to imagine a telephonic machine (including the one in your pocket) that isn’t potentially covered by this definition.

Mini-TCPA Goes Beyond Classic Telemarketing

Many businesses’ response to warnings about the applicability of the TCPA to their operations was “we don’t do telemarketing.” That’s because a distinction between telemarketing calls and informational calls has been enshrined in telemarketing regulation since the enactment of the TCPA law. Telemarketing calls were the bad ones; informational calls were the good ones. Later generations of FCC regulations, rules, and orders focus on this difference.

Again, Florida’s Mini-TCPA breaks new ground. While the new Florida statute regulates “telephonic sales calls” made for the traditional TCPA and telemarketing purposes, it appears that the new statute goes further. It now seems to include calls marketing products and services that were in the grey area of TCPA coverage. For example, extensions of credit.

“Non-commercial” calls are going to be exempt from coverage by the Mini-TCPA, but only if the caller has some level of licensure or certification e.g., IRS Section 501(c) and Florida state registration.

However, some authorities say that the statute also covers calls made for ultimate purpose of obtaining information for later use in sales. If this is the case, any calls used to harvest consumers’ personal information for later use in sales will require the called party’s prior express written consent under this statue.

Much of this sits squarely in a grey area. Litigation and additional legislation will certainly affect what the law will actually say. The true application to your individual marketing strategy is going to be hard to predict. Seeking legal counsel is going to be crucial to making wise decisions in this area.

Establishig Consent

If the TCPA taught us any clear lesson, it was that to make (almost) any call “legal” all you needed to do was get the called party’s consent.

What constitutes the appropriate level of consent under TCPA depends on various factors: kinds of calls, call technologies, kind of phone called, who was making the call, etc. For that reason, determining what level of consent is required for any given call under TCPA can require a complicated and troublesome analysis.

The new Florida law simplifies all of this: it mandates that the only acceptable consent for all covered calls is prior express written consent. It then carefully defines what prior express written consent must look like, with several required qualifying elements:

The consent must be in writing, bear the signature of the called party, “clearly authorize” a call using an automated system, include the authorization to call a particular number specified by the calling party, and inform the called party of certain enumerated rights.

In addition, the call must provide to consumers identifying information about the calling party. The new statute also requires that the calling party must maintain records of calls made and the consent obtained.

Sleeper Provisions

The Mini-TCPA, like the federal TCPA, is long and convoluted. There’s too much in the law to cover all the provisions in this short article. So here are some other provisions that may be worth a look:

  • Limitations on call frequency and timing;
  • the way information mining calls will be treated;
  • the liability of a company for the violations of its third-party contractors;
  • the requirements for callers to transmit identifying information; and
  • potential criminal penalties for certain activity.

There is good news, nonetheless: the Mini-TCPA law provides a long list of types of calls which are exempt from coverage by the new statute. However, the exemptions are many and complicated. Many provisions provide an exemption from liability under the statute, then take the exemption away with exceptions to the exemptions.

Competent legal counsel is a must before deciding that a company’s telemarketing is exempt from the statute.

A Final Thought

It’s easy to think that the real threat of this statute is actual litigation. It’s not. It’s the Hobson’s choice presented when your company receives a claim from either government or a private party.

When you receive a claim under the statute, if you weigh the costs of fighting it or settling it, you will quickly come to an ugly realization. Every claim can cost you upwards of $1500, plus attorney’s fees for the claimant, on top of paying your own attorney, plus trebled damages, and other possible damages.

It will almost always turn out that the potential out-of-pocket cost to fight even a bogus claim is going to be much larger than the settlement demands from a plaintiff. Given the possible downsides of litigation, good counsel may well urge you to settle any claim as quickly and as cheaply as possible. If you consider the economics when determining how to respond to a claim, this makes sense.

All of that puts a higher premium on prevention. Talk to your lawyer about how this statute might apply to you, what your exposure is, and how you might bullet-proof your marketing strategy.

The only sure way to win at these claims it to prevent them from being filed.

This article is provided for informational purposes and does not constitute legal advice. The purpose is merely to make the reader aware of some issues that must be addressed by legal counsel. This article cannot substitute for the advice of competent legal counsel addressing the reader’s specific situation.

Brad Elbein is a partner in the Atlanta office of Culhane Meadows, PLLC and is co-chair of the Government, Regulatory and Compliance Practice Group. Brad guides clients through matters involving telemarketing, electronic marketing, advertising, consumer laws (FTC Act, FDCPA, FRCA, TILA, and more), and defense of consumer law claims by government and by consumers.

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