03-25-2002 Council Packet - Laserfiche WebLink

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02/15x1994- 10:31 FROM 2494616 P.ei fencnlly mn purdi»cd nr !in'.Mri !>v i!ii owner of thcbuildinc *n whicJi *b»;y arc 1*>^ ^ ■ ■ -w ■ — — — — - — m ctted. It I up to tlie owner to a diftancccairia. Orin^tr '*« buving • litse of JrM^t»ilOj£ncv mrym fro® AT&T, ft cti?i vffer \vhrf> dbeounted price to * 5 pay-ph'^nf c»!.«too?. eis, who otherww would pay n«orc for. andfet lo0 profit from. .'it?ncc calk madcon thdr pay phifocs. The advantage tc cr^Tiinc u !:r:vatc rny phrnie b that the wrer c\w keep 'be »evi;. nue generated hy ?:ru. mlly b greater than the t>*picni 2 percent to 7 peicmt cotmiii«4on th:»t ownen receive wHe?: the>- Wy ti*v and acfvice from local lc!ephi?r.r con:pa- nies. Called Orange Fbonw. th*» phones ®ld by Orange Cnr.rT-:nicc^c-:.s rfK- Iowerloxig-difttrevT4tC5.forcr|c->. A: ihr fame tbne, owners of Orange ?hoi»eN rc;- oeive what Albi*rtyjf! tonu profit margini in On* |mv -phon-.* indu^t . The AT&T coitra»:< will mwi h 1/ more than ^20 nnKj***! iu JinnttuI tance «r>1ce for MCi Cc:i;r:a-::cu^:*r::- Inc., which now prHdrv tJu* **0I* Orange Phoncf with i^ng-di<taic<! .service. Aulc*long inv»:ntor .ind tw»lr*rr of than 60 patenu, Aibcf^.<nn. .Ti. marketing the rHtiv»'.\ firs! ::ri\atc pay telephone in 1982 i-‘. Twin C:t*c5 rjbvrb;. But hbcall fur profits w rPt una* isvvCfC'.l. In an effort to hn atne ncv.» hb jntf the company^ privatrl} i.*cld Oran*?e Commu nications four years a^ started -a c *rkjt:g a new design and ira^-kcUng vlratfgy h'r its payphones. •*Wc*vc conlln-icc to produc'.v*' ? *’ time, but sales wc-'l dn«- * a j-im: wv were just anodH?^ ielltnc plmiiai,** Alberts*?** -i-id. Tt sl‘keGilh*ttc. which Sells the raw>r handles b ’t -nakw its morc\-byselllngthcirblades. * The 1.5-cmplo>*cc Orange C*ir-v.’.rJca* tions discovered its «?wr. Cn!i**tr like? ap proach laitsuramcT. wbt*n it b*i4*‘n sc*5\*i»: its Orange Phone. The company txnigjtt icn*.:-t::st.: ncc m?.*- vice throu^ MCI. svhicb p.rwded Or ange Phone custoincTS the opportynfty tc m^e long-distarcc 'caJk my.' ho^ - he continental United States for 2i cents a ninute. Orange Phone owners kept the revenues '*udc from the phun®. but paid MCI about 18 cents for every minute of long* di^ance service. Orange Commtmtah final, in turn, rocelvt-ti about 5 cents of ee* ange GonunumcanBai whi m use nm os its Id be pflmSy Creeled et tbs pay-plweeliidiiotiy. v-y 18 ctnbscnt to MCI. Orange Phone pay phones typically viced by AT&T, which diargesare ;«jy-pbonc customers about 82 for the foit ntnute. and about AO cents each addi- 11< »nal minute. In a long-distance cuQ. The rate b high because the long«dis* •ance service b bdn;: provided to only one r.uiy phone or group of pay phones. Smaller volume b more«3ipen>ive tu sesviof. **AT&T b tarUted. 50 they can*t be very P-vaible with the ratc:^ they charge.** Al bertson •‘'^d. **But we can do It because were buying large volum® of time from them and sdling it t*^ Orange Phone cus- That, Albertson said, b the key to hb (/tmpany'sfuture. When Oraogc Ctommunications do* e ded to connect luw-cost long-distana ^;*vtce with ils OranfTc Phono, AT&T still w as restricted by the l*'edcral Communica- tiiioi CommUdon on the service rates it a'^ildoHer. In October 1989. however, the FCC permitted AT&T to offer a new volume- discount plan with lower prices than those allowed earlier in th<* year. Albertson said. As a result. Orange C^nununicatlons de cided to drop MCI and c » with AT&T be ginning in May. With AT&T s sc-vice. Orange Phone will be charged about 15 cciib a **inute for long-dbtance caUs. That gfres Orange Phone owners a profit of dbout 10 in*ntf a minute, or alxnit 40 peroent, on each call. Under the terms o( its commitment widi AT&T, OrangcCommimlcitionsagircesto hring in at least 160 million worth of long distance service for AT&T over the next f'^ir years. Albertsor said. Orange Communications already b re- >riling mure tl^ S20 million wrorth of *<ong-distance service annually — busiiies estabUshed since teaming up wKh MCI Ust summer. Officiab with AT&T in Minneapolb ;raid the reselling airangemcnt with Or- tioos alsopbos 80 rtnll mudi of it to bust* AlbertioosMd. 'Nobody else baa oormio^ Well be brai^ Pboom far dmlr emptoyui ip** bertson wdd. "Well put die pbooci lilt but wellalao try to obbdB their budnmibnes.*' Orange Communicatkms wffl offer busioem phone usen at least a 25 percent discount on AT&Ts diicet-dial loog^ tance rmtr, depending on the volume of I be said. For AlbvtMO, WevBiRf an ATkT dii. tributor, oiotDiaamd bttifaai partner is qaitaaswttch. Inrtieearlydayaotliitbwlnws, ATM*s Nortbwartara Bdl Tal^hooe Co. was pulling in an asHaanad 111 mfllioD in aa> nual pajr.phooa ravaaitas. As Albutsun’s pay pboDtsiarttdilMiwiagpp 01 oonipal. itor in Twin CMaa tartaufiU. ban and gasstatioai, NorthwprtamBellsuatcdcot- AlbaMB took teaMrtar to the Mlna^ jota Public UtiUtlas Comffltaioo. wfaidi to June 19S4 ordand Nbrthwartara Bdl to provide sarviea to privately owned pay pbooea. The daddOB Bade Minnewta the first state to aDow ooD^sfephoDC eoBpaay pay phones tobaseUandopentad. other iMnrrfdw nBh ATfcT “We weroKaunas who dwaydated the private pay pbuuilnuiiwaftiripiiiiiting $857,000 In nttenwy i Imb,** Albertson said. “I also wan one of the partiei hdpBdbaeaki9>anBsBSyateB SHD boastinn ahont his b)StiD bonsttaB aboot hb battia wiA ATM, Albaitteon said It's Umt to bury the hatchet, or wiiwcotteis, ai It may be. "We ware W» the United Steles and Runia, ready to try ond tdow each other off die map. Wore tfdap chanpd.** be said. “But we've abaady hod our war. One side won, and now It's time to look at working togrthcr.*’□