9-604-035 OC T OB E R 3 , 2 0 0 3
AMY C. EDMOND SON
The BCPC Internet Strategy Team: An Exercise
________________________________________________________________________________________________________________ 1 Under federal regulations, local regional carriers (such as BCPC) were required to make their networks available “at cost” to third-party providers. This meant that BCPC was required to be a wholesale provider of HIP service and had the option of being a service provider. Similarly, BCPC was required to sell its network capacity for local and long distance services to incumbent competitors. 2 Access lines, which connect customers to the telecommunications network, are a standard measure of the size of a local service provider. In 1999 there were approximately 200 million access lines in the United States. Introduction Internet Strategy Team Leader Chris Berkowitz was preparing for a meeting of representatives from all of Big City Phone Company’s (BCPC) major units. Together, they were to develop a recommendation to the CEO for how BCPC, a successful “Baby Bell,” should take advantage of the new High-speed Internet-access Product (HIP) opportunities. Should they move quickly into the HIP market? If so, how? A pilot of HIP technology had been successfully completed, and now BCPC faced two choices. They could (1) staff and launch HIP as a high-speed Internet access service across its entire service region or (2) concentrate on providing HIP as a wholesaler and learn from the mistakes of retail providers of the service. 1 Berkowitz was to lead a team of people well versed in the telecommunications business. She was confident that the team could make the right decision . BCPC competed on excellent customer service and satisfaction. They were known across the industry for the sophisticated and thorough system of metrics with which they measured service quality. Despite its relatively recent entry into the long distance market, BCPC had quickly reached a high level of customer satisfaction following its launch of the new service. The CEO expected no less from the introduction of HIP. Berkowitz considered the team's decision critical for many reasons, not the least of which was her awareness that new product introductions in this industry tended to be highly visible within the firm and to the public. Competitive Landscape BCPC offered local, long distance, and wireless (cellular) telephone services to an area comprised of 30 million access lines. 2 Local service providers such as BCPC connected customers to the telecommunications network, provided local telephone service, and access to long distance carriers. They also provided people-intensive services such as service initiation, billing, and selling value-
Professor Amy C. Edmondson and Research Associate Laura R. Feldman prepared exercise as the basis for class discussion.
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