roundtable: Consumer Competition Poll (FWD: CITS, bell.com)
roundtable: Consumer Competition Poll [FWD: CITS, bell.com]
Consumer Competition Poll [FWD: CITS, bell.com]
W. Curtiss Priest (BMSLIB@mitvma.mit.edu)
Wed, 12 Apr 95 08:39:12 EDT
Message-Id: <9504121239.AA25204@a.cni.org>
Date: Wed, 12 Apr 95 08:39:12 EDT
From: "W. Curtiss Priest" <BMSLIB@mitvma.mit.edu>
Subject: Consumer Competition Poll [FWD: CITS, bell.com]
To: Telecommunications Policy Roundtable <ROUNDTABLE@CNI.ORG>,
Posted by Curtiss Priest
<bmslib@mitvma.mit.edu>
** This is a text only copy.
1993 INFORMATION INDUSTRY OPINION SURVEY
Prepared for:
_____________________________
THE MARX GROUP
Wellesley, Massachusetts
Prepared by:
_____________________________________
ARLEN RESEARCH
a division of ARLEN COMMUNICATIONS INC.
Bethesda, Maryland
October 1993
______________________________________________________________________________
INFORMATION INDUSTRY OPINION SURVEY
TABLE OF CONTENTS
EXECUTIVE SUMMARY
Introduction
Summary of Findings:
SUMMARY OF RESULTS
Information and Communications Industry Alliances
Long Distance Services
Information Services
Cable TV
Manufacturing
Methodology
Background
ANALYSIS OF SURVEY AND RESULTS
Survey
Findings
Information and Communications Industries Alliances
Long Distance
Information Services
Cable TV
Manufacturing
APPENDIX I
Information Services Companies' Comments On Future Bell Activities
A Sampling Of Comments
APPENDIX II
Survey Methodology
APPENDIX III
Interview Script
APPENDIX IV
Arlen Communications Inc.
The Marx Group
8 Copyright 1993 The Marx Group
60 Valley Road,
Wellesley, MA 02181
(617) 576-5730
******************************************************************************
INFORMATION INDUSTRY OPINION SURVEY
EXECUTIVE SUMMARY
Introduction
The Information Industry Opinion Survey was designed to gauge both how
information services companies view the increasing number of alliances of
companies in the information and communications industries; and how
information services companies feel about the entry of the regional Bell
companies into lines of business prohibited under the 1984 MFJ Consent
Decree and the 1984 Cable Act. These "lines of business" include:
interexchange (long distance) services, information services,
manufacturing and cable television.
The results of the survey showed that information services companies of
all sizes favorably view new alliances and strongly support allowing the
regional Bell companies to participate in long distance, information
services, manufacturing and cable TV. This survey of executive opinion
in the information services industry was performed by Arlen Research,
which conducted telephone interviews with more than 300 information
services companies during June and July 1993. The study was commissioned
by The Marx Group, an information industry law and consulting firm.
The survey included a representative sample of database providers, online
services operators, information syndicates, software publishers, and print
publications.
Specifically, interviews were conducted with:
* Small information services companies -- up to $2 million annual
revenues;
* Medium-sized information services companies -- $2 million to $25
million revenues; and,
* Large information services companies -- more than $25 million
annual revenues.
Summary of Findings:
* 70% of respondents saw the alliances of information and
communications companies favorably impacting their companies.
* 66% of respondents supported allowing regional Bell company entry
into long distance.
* 72% of respondents supported allowing continued regional Bell
company provision of information services in the same areas in
which they provide phone service.
* 70% of respondents supported permitting the regional Bell companies to
provide cable TV service.
* 67% of respondents supported permitting the regional Bell companies to
manufacture equipment.
SUMMARY OF RESULTS
Information and Communications Industry Alliances
70% of respondents saw the alliances of information and communications
companies favorably affecting their companies.
Favorable 70%
Neutral 11%
Unfavorable 19%
70% said that alliances (such as teaming and consortia) between various
companies would favorably impact their own companies. In general, the
interviewees were positive about increased competition.
Long Distance Services
66% of respondents supported allowing regional Bell company entry into
long distance.
Favorable 66%
Neutral 13%
Unfavorable 21%
Regional Bell company entry into long distance service was looked upon
positively: 66% of all respondents said that they were in favor of
allowing regional Bell companies to offer long distance services. Answers
on this topic were consistent across all size groups. Many small
businesses surveyed were especially enthusiastic about the competitive
pricing they expect to accompany regional Bell company entry into long
distance service.
Note: Totals throughout this report may add up to more or less than 100%
due to rounding.
Information Services
72% of respondents supported continued regional Bell company provision of
in-region information services.
Favorable 72%
Neutral 7%
Unfavorable 21%
More than a year and a half after the regional Bell companies began to
provide information services in their own regions, the information
services companies said they were untroubled by in-region Bell
participation. Overall, more than 74% indicated that they were in favor
of continuing Bell involvement.
Large companies were particularly supportive of Bell involvement in
in-region information services:
* 81% favored such activity
* 13% felt unfavorably toward such Bell activities
* 6% were neutral or offered no response.
Sixty-eight % of mid-sized firms and 70% of small businesses expressed
"favorable" or "very favorable" attitudes toward allowing continued Bell
participation in in-region information services.
Cable TV
70% of respondents supported permitting the regional Bell companies to
provide cable TV service.
Favorable 70%
Neutral 15%
Unfavorable 15%
In all, 70% of respondents supported permitting Bell company cable
activity; 15% said they would not favor such entry.
Again, large businesses were the most positive, with 75% of respondents
viewing Bell entry into cable TV positively; 67% of medium-sized and small
firms favored permitting Bell cable TV entry.
A relatively high level (15%) were neutral or offered no answer; many
information services companies noted that they do not yet believe they
have a stake in the video/cable marketplace.
Manufacturing
67% of respondents favored permitting the regional Bell companies to
manufacture equipment.
Favorable 67%
Neutral 20%
Unfavorable 13%
Two-thirds said they had favorable attitudes toward permitting Bell entry;
only 13% were unfavorable. This area, however, had the highest degree of
"neutral" or "no response" replies (20%) -- reflecting the relative lack
of familiarity with equipment issues.
Methodology
The survey included a representative sample of information companies,
including content providers such as database publishers, online services
operators, information syndicates, software publishers and print
publications.
For the purposes of the survey, "information services companies" were
defined as database publishers, online services operators, information
syndicates, software publishers and print publications. To heighten
objectivity, Arlen Research deliberately excluded telephone companies and
their affiliates, even if the affiliate's primary activity was information
services. This left a universe of approximately 1,300 companies. Of this
group, 312 companies (25%) -- participated in the survey, an unusually
high response rate for surveys of this type. (A traditional response rate
is below 10%.)
Background
The Marx Group, Wellesley, Massachusetts, develops strategic alliances for
companies in the information services industry. It is on retainer to an
ad hoc coalition of the regional Bell companies. This survey was
conducted as part of The Marx Group's services for this coalition.
Arlen Research, which conducted the survey, is an operating division of
Arlen Communications Inc., a Bethesda, Maryland, research firm
specializing in interactive information and transaction services.
*****************************************************************************
INFORMATION INDUSTRY OPINION SURVEY
ANALYSIS OF SURVEY AND RESULTS
Survey
A nine-item questionnaire was posed to information services firms
nationwide. The questionnaire included:
* A question on a scale of 1 to 4 (with "1" being very unfavorable and "4"
being very favorable) that asked whether communications industry trends
towards competition and consolidation would be favorable or unfavorable
for the respondent's company.
* A "yes or no" question that ascertained whether participants were aware
of the 1984 MFJ Consent Decree and other background issues.
* Four "scaled" questions that asked participants to attach a specific
"pro" or "con" value to allowing Bell entry into long distance,
information services, manufacturing, and cable TV.
* An open-ended question asking how Bell company involvement might
impact their companies in the future.
* A "yes or no" question as to whether they had ever considered
working with a Bell company.
* An open-ended question that allowed participants to elaborate on any
issue addressed by the survey.
In order to keep the survey objective, participants were not told who
commissioned the survey. While many participants guessed that a
telecommunications firm was involved because of the nature of the
questions, some incorrectly assumed that it was one of the long distance
companies. The anonymity of the survey sponsor did not seem to affect
responses or the candor of participants.
Findings
The Information Industry Opinion Survey found consistent support among all
sizes of information services companies for regional Bell entry into areas
prohibited (or previously prohibited) under the 1984 Consent Decree
("MFJ") which broke up the former AT& T Bell System, and the 1984 Cable
Act. These "lines of business" areas include long distance, information
services, manufacturing and cable TV.
Open-ended questions solicited a variety of comments regarding the
regional Bell companies (see Appendix I). While the Bells were
characterized as "very big," "non-entrepreneurial" and "unlikely to
appreciate the value of information services companies, " they were also
considered to be companies that could promote more competition in the
marketplace and quickly build the information infrastructure and
marketplace.
The survey also found that 70% of information services companies saw the
alliance of large communications companies, such as U S WEST and Time
Warner Entertainment, as being favorable for their firm's future. 11%
percent viewed such mergers as being unfavorable towards their company's
future. 19% percent were neutral or had no opinion.
Information and Communications Industries Alliances
HOW WILL THE ALLIANCES OF COMPANIES IN THE INFORMATION AND COMMUNICATIONS
INDUSTRIES AFFECT YOUR COMPANY?
Overall, 70% of the interviewees viewed the alliances of information and
communications companies as favorably affecting their companies.
Overall,
A. very favorable 26%
B. somewhat favorable 44%
C. somewhat unfavorable 8%
D. very unfavorable 3%
E. neutral/no opinion 19%
Support for the ability to create alliances with Bell companies was
consistent among all sizes of information providers.
Small firms:
A. very favorable 21%
B. somewhat favorable 50%
C. somewhat unfavorable 9%
D. very unfavorable 5%
E. neutral/no opinion 15%
Medium firms:
A. very favorable 26%
B. somewhat favorable 41%
C. somewhat unfavorable 11%
D. very unfavorable 2%
E. neutral/no opinion 20%
Large firms:
A. very favorable 28%
B. somewhat favorable 50%
C. somewhat unfavorable 2%
D. very unfavorable 1%
E. neutral/no opinion 19%
Long Distance
SHOULD THE BELLS BE ALLOWED TO PROVIDE LONG DISTANCE SERVICES?
Overall, 66% of the respondents were favorable towards allowing regional
Bell entry into long distance, 21% were unfavorable, and 13% were neutral
or gave no answer.
Overall,
A. very favorable 31%
B. somewhat favorable 35%
C. somewhat unfavorable 16%
D. very unfavorable 5%
E. neutral/no opinion 13%
Support for Bell entry into long distance was consistent among all sizes
of information providers.
Small firms:
A. very favorable 36%
B. somewhat favorable 29%
C. somewhat unfavorable 15%
D. very unfavorable 7%
E. neutral/no opinion 13%
Medium-sized firms:
A. very favorable 32%
B. somewhat favorable 34%
C. somewhat unfavorable 16%
D. very unfavorable 6%
E. neutral/no opinion 13%
Large firms:
A. very favorable 25%
B. somewhat favorable 43%
C. somewhat unfavorable 16%
D. very unfavorable 3%
E. neutral/no opinion 13%
Information Services
SHOULD THE BELLS BE ALLOWED TO PROVIDE IN-REGION INFORMATION SERVICES?
Overall, 72% of the respondents were favorable towards continued Bell
participation in in-region information services, 21% were unfavorable, and
7% were neutral or gave no answer.
Overall:
A. very favorable 31%
B. somewhat favorable 41%
C. somewhat unfavorable 12%
D. very unfavorable 9%
E. neutral/no opinion 7%
Support for continued Bell provision of in-region information services was
consistent among all sizes of information services companies.
Small firms
A. very favorable 32%
B. somewhat favorable 38%
C. somewhat unfavorable 14%
D. very unfavorable 7%
E. neutral/no opinion 8%
Medium-sized firms
A. very favorable 27%
B. somewhat favorable 41%
C. somewhat unfavorable 12%
D. very unfavorable 13%
E. neutral/no opinion 6%
Large firms:
A. very favorable 37%
B. somewhat favorable 44%
C. somewhat unfavorable 9%
D. very unfavorable 4%
E. neutral/no opinion 6%
Cable TV
SHOULD THE BELLS BE PERMITTED TO PROVIDE CABLE TV SERVICE?
Overall, 70% of the respondents were favorable towards permitting the
Bells to provide cable TV service, 15% were unfavorable, and 15% were
neutral or gave no answer.
Overall:
A. very favorable 41%
B. somewhat favorable 28%
C. somewhat unfavorable 11%
D. very unfavorable 4%
E. neutral/no opinion 15%
Support for permitting the Bells to provide cable TV service was
consistent among all sizes of information services companies.
Small firms:
A. very favorable 44%
B. somewhat favorable 23%
C. somewhat unfavorable 15%
D. very unfavorable 0%
E. neutral/no opinion 18%
Medium-sized firms:
A. very favorable 39%
B. somewhat favorable 28%
C. somewhat unfavorable 9%
D. very unfavorable 7%
E. neutral/no opinion 17%
Large firms:
A. very favorable 42%
B. somewhat favorable 34%
C. somewhat unfavorable 4%
D. very unfavorable 10%
E. neutral/no opinion 10%
Manufacturing
SHOULD THE BELLS BE PERMITTED TO MANUFACTURE EQUIPMENT?
Overall, 67% of the respondents were favorable towards permitting the
regional Bell companies to manufacture equipment, 13% were unfavorable,
and 20% were neutral or gave no answer.
Overall::
A. very favorable 30%
B. somewhat favorable 37%
C. somewhat unfavorable 8%
D. very unfavorable 5%
E. neutral/no opinion 20%
Support for permitting the regional Bell companies to manufacture
equipment was consistent among all sizes of information providers.
Small firms:
A. very favorable 33%
B. somewhat favorable 39%
C. somewhat unfavorable 7%
D. very unfavorable 5%
E. neutral/no opinion 15%
Medium-sized firms:
A. very favorable 29%
B. somewhat favorable 38%
C. somewhat unfavorable 6%
D. very unfavorable 6%
E. neutral/no opinion 21%
Large firms:
A. very favorable 28%
B. somewhat favorable 34%
C. somewhat unfavorable 12%
D. very unfavorable 3%
E. neutral/no opinion 22%
APPENDIX I
Information Services Companies' Comments On Future Bell Activities - A
Sampling Of Comments
PRO...
As far as I can tell, the fears about (the regional Bell companies) have
proven to be unfounded. -- Newsletter publisher
The competition will make them all try to give us the best possible
service.-- Trade association
Do I worry that they will compete with me? Not in the slightest -- no
more than they worry that I'm going to go into the phone company
business. -- Statistics service
If they can make it better and cheaper than anybody else, let them do it.
The more competition the better. -- Textbook publisher
To the extent that information providers are able to reach a broader base
of users, that's one of the things that will make our market better.
Also, the effect of these alliances could be to push the cost of delivery
down. -- Large publisher
Most of the regional Bells are introducing new technology in their
networks very well. Anytime you have new people interested in introducing
new technology, you have new markets. -- CD ROM publisher
The Bells aren't clones; they aren't all the same. The ones we're working
with are good. -- Online service provider
Offering new service is going to be a long-term project. The Bells have
the backing and the experience to do it. -- Database publisher
CON....
I'm uncomfortable about a bombardment of information services from the
regional Bell companies. They could take unfair advantage. -- Periodical
publisher
They should be regulated. As long as they're regulated, okay. -- Trade
publication
They can't sell shoes, either. -- Software publisher
They're not in the information business. They're in the communications
business. Their local monopoly connections could generate too much
control. -- Online service provider
We don't want to see the Bells have a stranglehold on the U.S. economy.
They've abused it in the past. -- High tech magazine publisher
If the Bells go into information and long distance, there ought to be
competition for local phone service. -- Online service provider
NEUTRAL...
It will have no effect on us. -- Software publisher
They couldn't possibly compete with us. -- Database provider
They could be competitors. On the other hand, they could open new markets
for us. -- Textbook publisher
I don't see a problem. We own the cargo. -- Scientific database company
It's hard for me to understand the long-range implications. -- Specialized
news service
They can do things to data that most clients can't. They have great
familiarity with tools. But other clients are more creative. -- Ad agency
They are a very large, bureaucratic organization without any
entrepreneurial expertise. But they're learning. -- Software publisher
APPENDIX II
Survey Methodology
Arlen Research surveyed 312 information services companies between June 2
and July 16, 1993.
Of these:
* 27% (84) were small information services companies with annual
revenues up to $2 million;
* 44% (139) were medium-sized information services companies, with
annual revenues between $2 million and $25 million;
* 29% (89) were large information services companies with annual
revenues above $25 million.
The percentage of surveyed medium-sized firms (44%) reflects their
dominant status in the burgeoning information industry. Large firms and
revenue-producing small firms each represent just under 30% of the study
base, reflecting their overall presence in the industry.
Small firms were carefully scrutinized to ensure that they were, in fact,
revenue-producing information businesses. All the small firms in the
survey have full-time staffs. In addition, the vast majority of those
(95%) have annual revenues greater than $500,000.
In addition to selecting firms on the basis of annual revenues, Arlen
sought to achieve a representative sampling of information services
categories within each size group; therefore a representative balance
among database providers, online service operators ors, information
syndicates, software publishers and print publications was carefully
maintained.
Each interview was conducted by telephone with the highest-level official
available who is responsible for information services policies and
projects. Typically, the person interviewed was a vice president level or
above.
Contacts for the surveys were derived from a number of authoritative
reference sources covering the information industry, including membership
directories of:
* Information Industry Association;
* Interactive Services Association; and,
* Software Publishers Association.
In addition, standard rosters of information industry companies were used.
Interviewers administered a 9-item questionnaire, which included
open-ended questions plus items which asked respondents to offer opinions
on a scale of 1 to 4 (1 indicated "very unfavorable"; 4 meant "very
favorable"). See Appendix III for sample survey y forms.
The 4-point scale requires respondents to take a stance one way or
another; i.e., no neutral mid-point was available, although some
respondents inserted that viewpoint or offered no opinion. Comments were
also solicited throughout the interview.
APPENDIX III
Interview Script
[Note: This script was used by Arlen Research staff to gather input.]
Questionnaire of information industry attitudes
Interviewer:
Date:
This section to be filled out by interviewer prior to each call:
COMPANY:
Address:
Phone Number:
Contact Person: Title:
Chief Executive Officer:
Category/type of business:
(e.g. number and type of customer, national/local/regional reach, goods or
services offered)
Annual revenues (approx.) or range: ____$500K to $2M
____$2M to $25M
____$25M and over
__ __ __ __ __ __ __ __ __ __
Hello, I'm calling from Arlen Research in Bethesda, Maryland. We're doing
a study on the opinions of information services companies regarding the
changes now taking place in the telecommunications and information
industries. I hope you can spend about five to seven minutes answering a
few questions about your company's outlook on these changes.
Is this a good time for you?
[Yes: continue now]
[No: Please call me back on 1-800.....
or When may I call you back today?]
We are interviewing information services companies nationwide for this
study. I want to thank you for your help.
Let's begin.
1. The information and communications industries are in the midst of many
changes. AT&T and McCaw have joined forces. U S WEST and Time-Warner are
teaming up. Other consortia are forming every day, sometimes involving
companies from competing industries. On a scale of 1 to 4, with one
being very unfavorable, and four being very favorable, how do you think
these changes will affect your company?
1 2 3 4 NO [No opinion]
2. As you may know, since 1984, the regional Bell companies have not been
allowed to offer long distance voice and data services. There are also
restrictions on what these companies can do in cable TV and
telecommunications equipment manufacturing.
Are you familiar with these restrictions?
_____ Yes _____ No
For the next few questions, we'll use a scale of 1 to 4 ... in which:
4 means VERY favorable
1 means VERY unfavorable
[NO = No opinion]
You may use 2 or 3 if you feel SOMEWHAT favorable or unfavorable.
3. Should the regional Bell companies be allowed to compete in providing
long distance services?
1 2 3 4 NO
[EXPLAIN IF NECESSARY: 4 means "very favorable" toward allowing Bell
companies to compete]
4. A restriction set up in 1984 when AT&T was broken up said that the
regional Bell companies could not provide information services. That
restriction was lifted in 1991. On a scale of one to four (with one being
unfavorable, and four being very favorable), how do you feel about the
regional Bell companies continuing to be allowed to provide information
services in the same places where they operate phone service?
1 2 3 4 NO
5. The regional Bell companies are not allowed to design or make
telecommunications equipment. Do you think they should be permitted to
manufacture such devices or equipment for homes or businesses?
1 2 3 4 NO
[EXPLAIN IF NECESSARY: 4 means you feel very favorable about Bell
companies being allowed to make equipment]
[EXPLAIN IF ASKED: Your local telephone company is permitted to sell
equipment, but it cannot design or manufacture devices.]
6. How do you feel about allowing the regional Bell companies to compete
in offering cable TV service in the same places where they provide phone
service?
1 2 3 4 NO
7. COULD Bell company involvement in any of the activities we've discussed
affect your company? How?
[PROMPT: long distance services, information services, cable TV,
manufacturing]
[SECONDARY PROMPT: specific services such as electronic directories, home
banking or shopping, video-on-demand]
8. Have you ever considered working with a regional Bell company to
develop or deliver services?
_____ Yes _____ No
[IF YES, "COULD YOU PLEASE EXPLAIN THE POTENTIAL OR ACTUAL RELATIONSHIP?"]
[POSSIBLE PROMPTS: Where? When? Still operating? Satisfaction level]
9. Now, are there other thoughts you want to express about any of the
issues we've just discussed?
[PROMPT IF NECESSARY: Bell company involvement in long distance,
information services, manufacturing or cable TV]
Thank you for all your time and valuable ideas.
__ __ __ __ __ __ __ __
Interviewer's additional notes about this interview: [next sheet]
APPENDIX IV
Arlen Communications Inc.
Arlen Communications Inc. is a research firm specializing in interactive
information and transaction services. The company has tracked the
development of online services, telephony, cable TV and related businesses
since 1980, with a special focus on issues affecting information and
service (content) suppliers.
Arlen Research, an operating unit of the company, conducts market research
and analyses, including telephone and in-person interviews on topics
affecting new media, communications and information technology.
The Information Industry Opinion Survey was conducted by a team of
professional research and report experts supervised by Peter Krasilovsky,
project manager, and Gary Arlen, president of Arlen Communications Inc.
The Marx Group
The Marx Group is a law and consulting firm that advises information
services companies on strategic alliances to secure distribution channels,
sources of information content, financing and essential technology. It is
on retainer to an ad hoc coalition of the regional Bell companies. This
survey was conducted as part of The Marx Group's services for this
coalition.
The Marx Group has offices in Wellesley, Massachusetts. Arlen
Communications Inc. has offices in Bethesda, Maryland.
_______________________________________________________________________________
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