Dear Editor,
As the third employee of AT&T’s cellular subsidiary AMPS (I was director of engineering) and as the first President/COO of MetroMobile CTS (an aggressive nonwireline carrier of the mid-1980s), I have found your articles on the early days of cellular bringing back many fond memories. I was also pleased to see that your reporting is accurate, a too-rare occurrence nowadays. I thought I might toss in a couple of more “war stories” that you might find interesting.
Even as the 1984 breakup approached, an attempt was made to keep AMPS as a national business, not fragmented into seven pieces. A national “service mark” was created, called “Line One,” to compete with Wayne Schelle’s Cellular One that the nonwirelines eventually adopted. [We didn’t want to use the word “cellular,” it would be too confusing a concept to customers!] Also, an AMPS Cellular Central Services Organization (CCSO) was created in New Jersey (I was the CEO/COO) to provide engineering services and billing software so that a national identity could be maintained. This was a cellular version of the more widely known Bellcore, which supported-until just a few years ago-the more conventional lines of business for the Baby Bells. The two organizations were totally separate, presumably the better to insulate the competitive and monopoly enterprises from each other.
It soon became apparent at the CCSO that the competitive juices of the seven AMPS companies would allow for no cooperation on anything (it took Bellcore many more years to realize the same thing). Consequently, we terminated the CCSO as a “humanitarian act” at the divestiture. I believe I am still the only AT&T CEO to recommended the elimination of his company.
It is hard to imagine how little future many people saw for the cellular business during those early days. Herschel Shostek, for example, was then a prophet of doom and gloom. It was nearly impossible to raise Wall Street money to start these businesses (on the nonwireline side); we used private placements.
When Southwestern Bell paid the then-staggering price of $40/pop for some nonwireline markets (in `86), a very high executive at one of the RBOCs (my consulting client) thought I was totally mad when I said $100/pop wasn’t too far away.
As you reported, AT&T had the same view. At the breakup, I had chosen to stay with AT&T Network Systems as head of its cellular equipment business (part of the old Western Electric). After a few days on the job, I was called into my boss’s office (he was head of the Switching Division), and gently told that AT&T saw no future in cellular (not a big enough business to be bothered with) and that I should realize I was in a caretaker mode until AT&T could gracefully exit the business [“The thought of more than a few percent of the population using cellular is inconceivable”]. The following day I quit to join MetroMobileCTS. Soon after my departure, AT&T moved to exit the cellular handset business and terminated pioneering BTL research on digital cellular (another crazy idea of those cellular folks!).
The seven AMPS companies (primarily led by Dick Callahan of U S West) and just one or two nonwireline carriers (including me from MetroMobileCTS), joined with Bob Maher and Liz Maxfield to form the CTIA. I think our first national convention was in Palm Springs, and there were less than 20 of us (it took several years for the nonwirelines to feel comfortable in the same room with the AMPS companies). I feel out of place nowadays at these Las Vegas cellular extravaganzas.
Of course, by the early 1990s, cellular became Wall Street’s darling, and valuations went through the roof. I guess that’s why Internet valuations seemed normal to me. But those were exciting days … thanks for reminding me.
Chris Witze
Chris Witze & Associates Inc.
Send your wireless memories to Kristen Beckman at kbeckman@crain.com.
