| | : AGGRESSIVE TIMETABLE Set For RESTRUCTURING MmiNews Now It’s Full Speed Ahead By Ep Lopez AT&T will press forward swiftly and fairly to ensure that the three new companies created by the breakup aie the marketplace in healt hy condition and that employee uncer- tainty and worry is “iti Chai irman-Bob « Allen told employees in a worldwide broad- cast Sept. 28. DURING THE BROADCAST Allen said certain “rules of the road” will guide the breakup and that the ever-pressing employee question of employment status will be answered as soon as possible (see “Rules of the Road,” page 5). “Our overall approach to staffing and redeployment in general will be to identify and recruit the best skilled and most competitive people into the new entities...” —Hal Burlingame “Our goal is to let all of you know what this restructuring means to you personally by no later than early next year, hope- fully in January—and most of you will probably know sooner than that,” Allen said. Employees were told that pensions are safe and that the company does not foresee any material change in medical and dental benefits when the new companies are launched on Jan. 1, 1997. Portability of service and benefits among companies, akin to the 1984 divestiture, may be pos- sible, although for a limited time. Hal Burlingame, senior vice —See FAIRNESS, page 4 Telephone service was knocked out when Hurricane Marilyn plowed through St. Thomas. Employees Send Help After Hurricane Hits By SUZANNE SIDHU THE WORST OF HURRICANE MARILYN BROUGHT OUT the best in AT&T employees last month as people from several busi- ness units banded together to help the 52 employees of AT&T Virgin Islands (AT&T-VI) after the storm flattened nearly 80 percent of the island of St. Thomas and 20 percent of St. Croix. Though employee injuries were minor, many of their homes were lost or damaged, and long-distance telephone service was knocked out for several days. With winds gusting above 180 mph, the storm hit Friday night, Sept. 15, and raged into Saturday, ripping a microwave-radio dish antenna from atop an AT&T facility in Charlotte Amalie, St. Thomas. Because the dish transmits the signals of almost all Virgin Islands long-distance traffic to the AT&T cable station, the entire ter- ritory was isolated except for the station. There, the underseas fiber- optic cable systems linking North and South America, the Caribbean, Mexico and Southern Europe, operated normally. Upon learning of the damaged dish, a Network Services Division (NSD) disaster recovery team began collecting equipment and gear to restore service, loading it on a chartered airplane in Chic- ago. The plane landed on Sunday, after stopping in Baltimore to pick up more radio equipment and in Jacksonville, Fla., for relief supplies for the AT&T employees and their families. Those supplies were donated by Universal Card Services’ (UCS) Disaster Recovery Warehouse in Jacksonville. UCS loaded —See RELIEF, page 7 AT&T NEWS OCTOBER 11, 1995 AROUND LATINPASS OFFER As part of its AT&T True Rewards program, Consumer Communications Services is announcing the LatinPass frequent flyer pro- : : cies : ? entertainment industries. AT&T Bell Laboratories’ inventions, such as : the transistor, LP recording techniques, stereo, microphones and the gram whereby AT&T customers who fly to Latin America now can earn miles on any one : sible worldwide. Slated to open in spring 1997, the wing will be i designed with the help : of leading technology, : media and exhibition : companies, and with i the input of recording i artists, music engi- i neers and other i recording industry i professionals. AT&T : also is collaborating : with Penn State : University on develop- : ing a rock and roll curriculum and the museum’s home page on the : World Wide Web. Through a special promotion, AT&T helped build : the museum’s national membership by offering consumers a dis- : counted membership package. In addition, AT&T True Rewards : members can redeem points for a single or family membership by : calling 800-869-9900. of the 15 member airlines in the LatinPass frequent traveler program. Customers enrolled in the LatinPass program can earn five frequent traveler miles for every dollar of AT&T long-distance calls they make, with the miles accumulated into a single account for use on any of the LatinPass member air- lines. LatinPass member airlines are head- quartered in Latin America and the Caribbean. Also affiliated with LatinPass are USAir, Avis, Hertz and Diners Club International. To talk with a bilingual repre- sentative, call 800-821-1161. PCS FOR BEGINNERS Network Systems Group (NSG) has intro- duced an economical, smaller version of its personal com- munications services (PCS) switching center. The Compact PCS Switching Center is especially tailored to the needs of entry-level PCS providers. The switching center is based on NSG's SESS -2000 Switching System, and is available in two versions: the 5ESS-2000 Compact Digital Exchange and the Very Compact Digital Exchange. The switching center will be available the first quarter of 1996. PAPAL PROTECTION ROCK AND ROLL HALL OF FAME Communications Services Group is sponsoring a 4,000-square-foot ? wing in the Rock and Roll Hall of Fame and Museum in Cleveland that will display AT&T’s technological contributions to the music and laser, have had a significant impact on rock and roll, making it acces- DIGITAL WIRELESS LEADER Network Systems Group’s (NSG) new technology for wire- less standards—an eight kilobit- per-second variable rate digital voice encoder—was rated best in wireless sound quality by the Telecommunications Industry Association’s Engineering Committee. The rating bolsters NSG’s reputation as a leader in digital wireless voice quality. Voice encoders compress and transmit voice signals over wire- less networks. NSG’s new voice encoding scheme significantly improves the sound quality avail- Wireless Services is providing 650 cellular telephones and service to the U.S. Secret Service to support communications for the papal visit to the New York area and the United Nations’ 50th Anniversary celebration in October. The New York and Brooklyn Archdioceses also are using more than 55 donated cellular tele- phones, pagers and service from AT&T Wireless Services. The cellu- lar telephones will be used to keep secu- - rity and staff updat- . 2 ed about the status of the large-scale events. Pope John Paul II visited the area from Oct. 4 through Oct. 8. The members of the United Nations will commemo- rate the U.N.’s 50th anniversary from Oct. 21 through Oct. 24. the CDMA (Code Division Multiple Access) technology. The encoding scheme was rated best in clarity in the presence of background noise and best in balance between male and female voice quality. BILLING EDGE Business Communications Services has that lets its largest 800-services customers quickly analyze and use their 800-ser- a = vices billing information to improve business results. AT&T Billing Edge Desktop Analysis Software for 800 Services gives AT&T 800-services cus- on a CD-ROM that includes Windows”- based software and tips from other customers. By analyzing calling pat- terns and performance, customers can compare the efficiency of their call centers and reduce telecommuni- cations costs. For more information, call 800-557-BILL (2455). SKYNET satellite Services has successtully launched Telstar 402R communications satellite into space from the Arianespace launch facility in French Guiana. Telstar 402R, one of the most powerful, advanced commercial communications satellites ever built, replaces the satellite that was lost in 1994. It will be turned up for service by Dec. 1 from an orbit of 22,300 miles above the Earth’s equator, and is expected to provide service for the next 12 years. INSTANT IMAGING Business Communications Services, Perot Systems and BRIT Systems have teamed up to show the power of today’s multimedia technologies with a demonstration of a medical imaging soft- ware application over Asynchronous Transfer Mode (ATM) service. The six-month demonstra- tion, which began at the AT&q location in the Dallas Infomart, uses real-life medical scenarios to illustrate the various uses for ATM in the medical industry. The application software developed by BRIT Systems transmits video and medical images to and from the University of Texas Southwestern Medical Center, the Dallas Infomart and Perot locations using AT&1’s InferSpan ATM service. The application allows doctors, scientists and other specialists to collaborate on diagnoses, designs and analyses from remote locations. _ EARN TECHCREDITS i Consumers can help bring the lat- : est technology to their com- : munities’ schools through : a pilot program spon- : sored by the : Computer Learning : Foundation and AT&q. The “Technology for } Education Program—A : Community Partnership” enables con- : sumers across the country to direct : points—called TechCredits—to any : accredited public, private or : parochial school : (K through 12) in the partici- able to wireless systems based on ae grag ? Connecticut, Florida, Massachusetts, North Carolina, Ohio, Rhode Island and South ? Carolina. The schools can apply TechCredits toward free classroom computers, software : and other technology products. Consumers can help schools accumulate TechCredits in four ; woys—by using AT&T long-distance service, by redeeming AT&T True Rewards points for : TechCredits, by purchasing AT&T Globalyst Series 100 notebook computers or AT&T Globalyst : 300 Series TelePC desktop computers; or by making purchases at AT&T Phone Centers. AT&T : residential long-distance customers living outside the pilot states can participate. To register for the program, call 800-272-0600. at MICROELECTRONICS PEACE-OF-MIND PROCESSOR launched a billing offer, at no extra charge, : ~ : Microelectronics has introduced the first commercially available digi- tal signal processor (DSP) specifically designed for narrowband Personal Communications Services (PCS) devices. With PCS net- works being built across the country, equipment manufacturers are racing to develop the ideal portable two-way messaging devices to : tae : : send and receive narrowband PCS signals. Microelectronic’s POMP tomers their monthly billing information : : : DSP1615, or the “Peace of Mind Processor,” addresses the require- ments of equipment manufacturers for a low-cost programmable : processor that allows flexible product design and low-power con- sumption. AT&T Microelectronics also has introduced a microchip set that allows users of Token-Ring local area networks to upgrade their networks from 16 megabits-per-second to 100 megabits-per-sec- : ond. The chip set, called the second-generation Regattal00 chip set, : was unveiled last month at the Networld+Interop trade show. - AT&T WorldNet OCTOBER 11, 1995 : Edit Options Text Window Help interchange Directory G3 ndustry Watch BY At the Oftice 3 Shop talk @} Company Library (SY Fringe Benefits Q3 About Hiznet - __| Gel the most out of Interchange | Sewecet The AT&T Business Network, much more than an on-line service, promises to be the next-genera- tion business tool. ‘ak poltical bolle B3 Global Strategies How tech mnovators Work at Home: Are you sure you're insured? (SB Covering business property on homeowner police: The qreat IRS crackdown on freedancer taxes fobiguity over “independent contractor’ CJ Database marketing: mining technology BCS Launches On-Line Information Service By Par Russo ENTREPRENEURS AND PRO- fessionals searching the Internet for important business data soon can avoid endless hours of on-line rummaging, thanks to AT&T Business Network. The fall intro- . duction of this new on-line ser- vice is the. industry’s first combi- nation of business information and financial news, productivity- enhancing services, reference databases, and a next-generation on-line network that includes inte- grated access to the Internet. The service also is the first AT&T-bianded content offering from AT&T New Media Services, a new unit of AT&T Business Communications Services (BCS) announced Sept. 19. Based in Cambridge, Mass., the unit is part of the company’s three-pronged thrust into on-line services and the Internet, which includes: Services, Hosting and Transaction services, and Content services (see “CSG Plans To Make the Internet as Easy To Use as the Telephone”). Delivering on the Strategy “Content services is a critical piece of AT&T’s strategic on-line initiative,’ said BCS President John Petrillo. “AT&T New Media Services will play an important role in delivering on this strategy, and AT&T is putting considerable resources behind this unit.” With its emphasis on content, BCS also is forming a unit in New Jersey, charging it with the creation of AT&T-branded infor- mation primarily targeted at the personal and family markets. The new service will be hosted by Interchange On-Line Network—a next-generation publishing plat- ‘form acquired from Ziff Com- munications Co. in December 1994. AT&T Business Network tar- gets the business and professional markets, where AT&T has a cus- tomer base of more than 10 mil- lion businesses. Research reveals these customers want flexible, on- _ line tools and information ser- vices that provide them with a competitive edge. “Before today, business pro- fessionals going on line to get authoritative and complete busi- ness information had to patch it together from many different sources,” said Michael Kolowich, president, AT&T New Media Services. “We’ve put the indus- try’s top sources of business infor- mation, plus related Internet resources, in one place.” : A Wealth of Information The launch plans call for content from more than 20 lead- ing publishers, including Cowles Business Media, Dow Jones & Company, Dun & Bradstreet Information Services, Nightly Business Report and TRW Business Information Services. The service presents and orga- nizes this wealth of information in ways that make it easy for users to find what interests them. In addition, AT&T Business Network provides links to related information on the World Wide Web, thus supplementing and enriching its own content. Subscribers to AT&T Busi- ness Network get 10 hours of connect time for $39.95 per month; each additional hour costs $2.95. The monthly fee includes the Netscape Navigator software, e-mail services, and integrated links to the Internet and the World Wide Web. Orders received before Dec. 1, 1995, are eligible for spe- cial pricing of $24.95 per month through June 30, 1996. Other spe- cial offers are being planned. To join, or get information about AT&T Business Network, call 800-660-2299, or visit the AT&T Interchange Web site at http://www.ichange.com. Hf ~ AT&T NEWS 3 (SG Plans To Make the Internet As Easy To Use as the Telephone By COLLINS YEARWOOD AT&T plans to make using the vaunted Internet, with its Webs, URLs, gophers and FTPs, as easy as making a phone call to your local pizza shop and as viable and broadly accepted as toll-free 800 services are today. “WE INTEND TO TAKE THE Internet from the realm of the high-tech pioneers to the world of everyday use,” said Alex Mandl, executive vice president and CEO, AT&T Communications Services Group (CSG). AT&T unveiled its strategy this summer—laying out a com- prehensive approach to on-line ser- vices built on the standards of the ~ Internet. New services and offers have followed at a furious clip. “We have the tech- nological know-how to help customers put an electronic version of their ~ sales catalog on the Internet and make it interactive and secure.” —Alex Mandl Although the Internet began in an academic environment as a link between colleges, universi- ties and research organizations, it has been transformed by the invention of specialized user soft- ware, called browsers, and the creation of a network of multime- dia servers called the World Wide Web. The Intermet is gaining huge popularity as the hub of the Information Superhighway—an open, standard environment in cyberspace. : AT&T plans to bring together its 90 million customers in a new way—creating a new way of communicating through “the Internet. Soon, the proverbial town square in which people meet to chat, browse and shop will be a few keyboard clicks away and, in this case, the entire country and much of the world will be found there as well. AT&T will help its cus- tomers do business on the Internet by working with them to develop electronic sales applications and to host content services. “We have the technological know-how to help customers put an electronic version of their sales catalog on the Internet and make it interactive and secure,” said Mandl. Eliminating Barriers Still, it’s a tricky matter to lure the average person onto the Internet. Research shows that people say there are four barriers to using the Internet: It’s too hard to get on, it’s too hard to find things, it’s not easy to get started and it’s not secure. By embracing Internet stan- dards as the foundation for an open on-line business, AT&T aims to expand the market for the Internet. The strategy is to make it easier for consumers to get on line while luring in mer-— chants and retailers who have been hesitant to create a presence on the Internet. AT&T’s approach has another significant difference. Most existing on-line businesses are vertically integrated and built on closed proprietary platforms. AT&T, however, is developing the three different aspects of on- line businesses, access, hosting, and content as independent orga- nizations flexible enough to serve a broad array of customer requirements. Gateway Services, led by. Tom Evslin, is bringing to market a range of Internet access offers called AT&T WorldNet Services. These services will give cus- tomers superior, easy-to-use dial- up and dedicated Internet access with powerful. navigational tools and information directories whether they are at home, in the office or on the road. AT&T has formed a rela- tionship with BBN-Planet, a sub- sidiary of Bolt Beraneck & Newman, to provide high-speed Internet access to business users. A number of other leaders in the Internet industry will be working with the Gateway team to develop WorldNet services: Netscape, a leading provider of Internet browsers; Osborne Corp., for Internet Yellow Pages; McKinley Inc., a leading data- base provider, for a world-class Internet resource directory; and Verity Corp., for software to search both directories and the Internet. CSG also is cooperating with McKinley and Adobe for leading-edge graphics software. _ WorldNet Managed Internet — Service for businesses is avail- able now. The dial-up service is beginning beta tests and will.be available in 1996. AT&T’s hosting and transac- tion business will be led by Kathleen Earley. The new busi- ness will be organized around and integrated with AT&T’s value-added messaging busi- ness—EasyLink Services. Ear- ley’s team will be rolling out more detailed information in the coming months. The content businesses have two major initiatives focused on different aspects of the market. The content-aggregation busi- nesses are Consumer Content Services led by Caroline Van- derlip and New Media Services led by Michael Kolowich, which includes the Interchange Online Network and the AT&T Business Network (see related story on this page). : The future for AT&T’s online offerings look bright from the start. Leading analysts pre- dict success and rapid growth for AT&T’s effort. Hf | | Allen Sets Expectations For the Months Ahead By PauL LAPLANTE Speaking to a group of company leaders who assembled for the first time in nearly a decade, Chairman Bob Allen set the tone for the mammoth restructuring that lies ahead and made his views clear about doing what's right by employees in the process. “THIS [IS AT&T, NOT DODGE City,” Allen stated emphatically. “Gunslingers aren’t welcome dur- ing the transition, or any other time.” : Allen’s remarks outlined his expectations of how the people of AT&T will treat each other throughout the transition period, and beyond. He underscored that building the three companies that will emerge for the future is the pri- mary task at hand. Allen: spoke at a half-day meeting, open to all AT&T offi- cers and directors, held one week to the day after the announcement. The company’s senior leaders were gathered to explore the lead- ership challenges presented by the restructuring. Allen began the meeting by reflecting on the monumental decision to split the company into RESTRUCTURING GUIDELINES |. First, and foremost, we're hereto serve customers. Indeed, our commitment to customers should be our guiding principle in everything we do. 2. All contracts and commitments— whether internal or external—will be fulfilled. 3. All financial commitments will be met. 4. Globalization will remain a top priority. 5. Decisions will be made in the overall hest interests of AT&T's current share- owners. 6. The transition Steering Committee will resolve significant corporate con- flicts—not by negotiation, but on the basis of the best facts and judgment that can be applied on behalf of the current shareholders. 7. Decisions will be made prudently and in real time, based on best-available information. 8. Decisions will be made mindful of simplicity, speed and ease of execution. 9. ia al for the businesses will have the primary responsibility for determining how many people they'll need. They'll work with the leaders of the corporate functions regarding deci- sions about filling jobs in specific busi- nesses. 10. In general, people will follow their work. 11. Most dedicated functions will align with internal customers. Shared func- tions will be divided up, but some shar- ing might continue for a short period after the transition. 12. Surplus employees will have access to job opportunities across the enter- prise, and every effort will a made to place them. 13. Our behavior and decisions will be guided by the values of Our Common Bond. 14. We will restructure the business as a team. 15. We will communicate—openly and frequently. Questions coming up ak during these first few wooks sxe the restructuring announcement center on two: of the implementation principles: most people following their work and caring for surplus employees during the transition. “t's true,” Hal Burlingame, senior vice president, Human Resources said, “the majority of AT&T's people will be doing on January 1, 1997 the same jobs they’ re doing today. Still, significant numbers of employees will be affected directly if they're in one of the functional support organizations or if they're doing work in a-variety of areas that are in a business unit today, but that might be redesigned as the entities complete their overall design and staffing requirements. “AT&T will continue doing its best to place employees who become surplus,” Burlingame added. “They will receive preferential access to job opportunities across the entities based on their skills, performance, capabilities and individual flexibility. The reality is, however, that some will not find jobs within the business. While we don’t know how many this ‘might he, we are reassessing our outplacement activities and other support processes to ensure that any surplus employees who do nof find internal opportunities are well positioned for new careers outside the company.” three sections, and sell a fourth piece, AT&T Capital Corp. Converging technology, changing customers needs, an influx of entrenched competitors, internal conflicts and legislative developments all were factors in the decision, Allen said. In short, it was becoming increasingly clear that the inte- grated AT&T was a structure for the past, not for the future. “Listening to what employees have to say is almost as important as keep- ing them informed.” —Bob Allen Shared Accountability Turning to the impact of the decision on people, Allen stressed that although the company will become three separate businesses, people resources will be managed across the entire enterprise. “We will share accountability for any force imbalance that might develop in the coming months,” he said. “If a surplus situation arises, it won’t be the responsibil- ity of the individual entities we’re creating. It will be ours—shared as a leadership team. We owe that to our people.” The foundation for this peo- ple support comes from a set of 15 general restructuring imple- mentation principles—character- ized as “cast in stone”—that Allen outlined during the meeting (see “Implementation Principles,” this page). Allen gave special emphasis to the principles covering people issues and noted that as a group, the leadership of the business would be held accountable for communi- cating during the transition. “That takes many forms,” he said. “At the least, it means return- ing phone calls—no matter which side of the house they come from. It also means listening. Listening to what employees have to say is almost as important as keeping them informed. The leaders I need for the job ahead will be able to do both.” Retain Customer Focus Allen also reminded gathered leaders not to lose sight of cus- tomer needs during the transition. “First, and foremost, we’re here to serve customers,” he said. “Indeed, our commitment to cus- tomers should be our guiding prin- ciple in everything we do. Customers pay the bills. When they win, we win.” Allen charged the leadership —See AT&T, page 6 (OTOS BY FELIY BRYANT/AT& MEDIA SERVICES Fainese Timely Actions Cited continued from page | preside: Human Resources, said there a are no 0 plan 0 off exit package to slim down the payroll. “We will use the tools that we already ake to incent people in organizations where there are surplus situations to, first of all, leave th company voluntarily,” he said. “But, on that point, we do not have - i plans to offer some companywide magic opin rete to Specs large numbers of people to leave? oo... Ma raicina Employees at risk will receive es preferential access to open jobs — -across all three entities, subject to their skills and personal flexibility. “Our overall approach to staffing and redeployment in gen- eral will be to identify and recruit the best-skilled and most competi- tive people into the new entities— __ focus and business regardless of wherever they might sit right now,” Burlingame said. i nn “Once the redeployment is fin- ae ished, we do expect there will be some at-risk employees who will — have to leave the business,” Burlingame said. Those employees will receive : “Special support such as new career directions and option, “The driving force behind this restruc- turing i Is strategic heard, no one knows the who, how es and where 1 employee surplus. those resources will be allocated among tie ine entities phearee 0 ‘i their needs, skills required and other criteria. He noted that if there are _ resources left over when the allocation i is done, the stated dieters for ih dealing with surplus would be applied. ai As part of his answer to another employee question, Allen said ee partitioning of now-centralized functions would not be a rigid proce- dure. “We’re not going to take every function that exists in AT&T | today, by name or by description, and say, ‘Okay, each of the three — companies has to have that,’ ” Allen said. “That’s going. to bea ‘matter : of determination based on cau of these ae —— i sath their customers going forward. | gy 0 dn’t want to mislead anybody on that score.’ is The chairman told employees to keep customer satisfaction upper- : most in their minds to ensure the new companies are on solid footing By SUZANNE SIDHU ALTHOUGH THE ROAD to reinvention seems daunt- ing, imagine the much tougher road AT&T and its employees traveled in the late 19th century: inventing itself in the first place. Service for All That job was enthusias- tically tackled by AT&T’s first president, Theodore Vail. This year marks both Vail’s birth and the 75th anniversary of his death. In ‘1878, when he was hired as the first administrator of the Bell Telephone Company, Vail turned his prodigious management skills to the job of extending telephone ser- America. the 150th anniversary of 7 vice to every backwoods farm, Main Street diner and town office in Allen said the recent run-up in AT&T stock, including an all-time ice high, reflected investor belief that the new companies will have a bright future. “Investors are confident that the people of AT&T can take advan- _ tage of the opportunities we’re creating,” Allen said. AT&T is creating _ three powerful new companies with enormous opportunities, not just i simply breaking up, he added. _ “... Downsizing is not ... what this change is all about,” Allen told employees. “The driving force behind this restructuring is strategic focus and business growth.” The restructuring will be evenhanded in preparing each new company to compete effectively in their respective markets, Allen maintained. " Allen said that, even though three distinct companies will emerge, Vail envisioned every person having access to a telephone, and all telephones having quick access to each other. Guided by this vision, the company flourished. But challenges were plentiful: AT&T had to fight 600 lawsuits to protect its patents; it had to meet and beat the competi- tion, including giants like Thomas Edison and Western Union; it had to solve technical problems that sprung up as each wire connected each new customer; and it had to finance and shape an organization to serve a growing country. _ That organization evolved as times changed. The original patent association of Bell, Watson, and their colleagues was known as the Bell Telephone Company, organized in 1878. But the very next year it joined with the New England Telephone Company to form the National Bell Telephone Company. And two years later, that conglomeration consolidated with Western Union properties to become The American the goal is to proceed in the spirit of close cooperation and concern - for each other. “This is AT&T, not Dodge City,” Allen said. “Gunslingers going their separate ways are not -welcome during the transition or after. We’re going to approach this restructuring as a team and we’re going to support each other as we do it.” Regarding other issues s related to the breakup, employees were told that: _« Each individual company will determine whether the current business-unit structure will exist after the breakup. «The leadership structure of | the new companies will be deter- mined by Bob Allen and the board - of directors. The company hopes to make those decisions soon. * The company will not ‘waver in commitments it has- _ made, including environmental and safety issues, Workplace of the Future initiatives and current labor contracts. * The company will remain committed to its 1999 and 1996 - financial targets. + Globalization will eran as a priority now and after the ne a RULES OF THE ROAD To establish a general framework for the ongoing restructuring, AT&T has set forth a number of guiding principles: e During the transition, our values and behaviors will continue to be dri- ven by Our Common Bond: Respect for Individuals, Dedication to Customers, Highest Standards of Integrity, Innovation and Teamwork. e As information is known, it will be communicated bes ositively and con- structively through leaders who are visible and accessibl © Leaders will be accountable for demonstrating concern and support for their people throughout the transition to the new entities. e Enhancing diversity of the workforce in all three new entities will remain a priority, in order to enhance the competitive abilities of each business. © Success of this effort will require high levels of cooperation and partnership across all organizations. Bell Telephone Company. So the early years of the business were marked by constant organizational evolu- tion. Its structure changed not just to assure mere survival, but to make the very best of economic, social and politi- cal situations. In 1887, Vail ee over a dispute with the company’s financiers. He was vindicated 20 years later, in 1907, when, at age 62, he was called back to reorganize and re-invigorate the company. For 13 years, until his death in 1920, he SELL that work. A Plan = the Future Were Vail to stop into AT&T offices today, he might scratch his whiskers; shake his head and smile at the unchanging nature of the telecommunications business. The company still faces regulatory battles, stiff competition, knotty financial questions, and decisions about tech- nology and reorganization. Indeed, what Vail would see is a company set on making, in Chairman Bob Allen’s words, “its business more valuable to shareowners, even more responsive to customers, and better able to focus en growth opportunities in individual markets.” Speaking about “trivestiture” at the recent employee broadcast, Allen said the plan would create less complex and more nimble structures, allowing faster decisions, faster delivery, and closer focus on customers. The plan, he said, is a “way to move full speed ahead into the future.” That future includes a world of telecommunications services and prod- ucts to develop and deploy that would astonish even Vail’s broad imagination. However, always inter- ested in pushing frontiers, he would no doubt approve of any plan to put those services and se into people’s hands as quickly and efficiently as possible. His is a legacy of “full speed ahead.” Hf VAIL’S VALIANT VISION COURTESY AT&T ARCHIVES - was a manufacturer and supplier to the Bell System, but also ran the . Telecom, in which AT&T held a substantial minority interest. . Northern Electric was a major telephone equipment manufacturer in ft os History| Rich Wit Vored Vertes By Ep Lopez WHAT HAPPENS TO COMPANIES THAT LEAVE THE AT&T fold and strike out on their own? Often, the record shows they go on to achieve solid success in their own right. The seven regional Bell Operating Companies are only the most recent examples. Through the years, AT&T has divested, sold or spun off busi- nesses that, for regulatory, strategic or other considerations, were no longer appropriate for its portfolio. Some of the more colorful ventures relinquished by AT&T were _ in the fledgling radio and motion picture industries, but there are other highlights: : The sale in 1925 of International Western Electric, the equip- ment-manufacturing operation that was a global concern starting in the late 1800s. Except for Canadian interests, the foreign operations were sold to International Telephone and Telegraph (ITT). The ITT sale also included AT&T’s majority ownership in Nippon Electric Company, which AT&T co-founded. It was the main supplier of tele- phone equipment in Japan. The 1928 spin-off to employees of Graybar Electric Co. (after Western Electric founders Elisha Gray and Enos Barton). Graybar’s roots stemmed from the late 1800s, when Western Electric not only Nae world’s largest electrical supplies business. The latter operation sold equipment from Western and other man- ufacturers, and by 1925 Western was selling such appliances as fans, sewing machines, dishwashers and ranges made by others but which carried the “Western Electric” brand. It rivaled General Electric and Westinghouse as a‘leading name in appliances. Today Graybar is still owned by its employees and is a successful wholesale distributor of electrical supplies. The gradual sale of shares in Northern Electric, now Northern Canada. AT&T’s interests were sold over several years after a consent decree in 1956. AT&T’s interest in radio was sparked by research in the new medium to provide telephone service, but eventually radio’s promise was in broadcasting. At its infancy, radio had striking similarities to the Internet today: It was a technology new to many and though its future and potential were uncertain, there was a nagging feeling among companies that somehow they had to be part of it. By 1920, AT&T had three experimental radio stations in New Jersey and New York City, where two years later WEAF was offering 15 minutes of airtime for between $40 to $50. Unpaid airtime was filled with entertainment—singing, piano solos, poetry, violin selec- tions—that relied on the'local talents of AT&T employees. Radio took off as broadcasters fine-tuned their ‘programming and AT&T proceeded to expand its radio’ network. ‘But by 1926, a desire — to re-focus the business, patent: Suits and rte implications Ted u a & ‘fe “nd *} & a Ral] PACELLI LEI SRaRHS |. if f ” @ AWM aa ae Washington, D.C., to Radi AT&T's pioneerin f : Electrical Research Products Inc. (ERP Electric equipn | Bae La i 1926, licenses to thé Motion Picture motion picture By the mid- caused AT&T to retained the part of industry. It later sold in 1958. was the most profound cha recent restructuring. PHOTOS COURTESY AT&T ARCHIVES poe debates. The breakup was a boon to investors, who eed shares in the various pieces of the old Bell System. Hi ~ The AT&T Archives preserves the past by collecting the present. Call 908-756-1586 before you discard photos, brochures, documents, AT&T products or prototypes. : iis AT&T Companies Often Achieve Success AT&T Leaders Get Roadmap for Future continued from page 4 of the business with assuming restructuring tasks, and freeing people who serve customers to pursue their jobs with full vigor and enthusiasm. _The theme of supporting peo- ple throughout the restructuring also was emphasized by Hal ‘Burlingame, senior vice president, Human Resources. Referring to speculative media reports about potential downsizings, Burlingame said, “There is a much bigger peo- ple story that the media so far has overlooked. It’s a story about con- necting people with new organiza- tions, new jobs and new futures.” Continued Cooperation Burlingame said that a small transition team had begun work on common practices for staffing, including creation of some “rules of the road.” But following rules and guidelines isn’t enough. For example, Burlingame underscored the importance of working against development of an “us vs. them” mentality. “Almost 40 percent of our people lived through divesti- ture and they remember it well. I’m concemed that too many peo- ple are too eager to draw SS to divestiture.” Some key differences this time: the breakup is voluntary; employees, customers and share- holders think it’s a good idea; and the new companies are not likely to compete one day—in fact, these entities are good potential cus- tomers of each other. Moving Swiftly Another topic that received considerable discussion during the meeting was the swiftness with which restructuring work must proceed. Much of the upfront sep- - aration work must approach con- clusion by January 1996 to meet the Jan. 1, 1997, target date for completing the breakup. “That means 1996 will be kind of an audition for our three new businesses,” Allen said. “It will be a crucial time to show our investors that we can deliver on the value this reorganization promises. The process won’t be easy, but it won’t lack for good people either.” Before dispatching the assembled leadership, Allen reminded them of the bonds all AT&T people share that will serve them well during the transition. Among them are the 110 years of history employees have in com- mon, that the companies will be future customers and suppliers of each other, and that employees have friendship and respect for each other. “These bonds will anchor us well,” he said, “while also helping build momentum for the bright future ahead.” Hi OCTOBER 11, 1995 AT&T NEWS 7 With four Pentium® processors on a single board, the WorldMark servers offer unmatched power and versatility at a competitive price. The Columbia, S.C. development team that created the board include, from left, John Levchuk, David Wingo, Perry Vincent, Curt Bisbee and Bob Wang. GIS‘ Enterprise Servers Promise To Consume the Competition By ANNE WAINSCOTT FED BY INCREASING POW- er and shrinking prices, compa- nies have enjoyed a steady diet of ' faster, more versatile personal computers and basic client/server computing. However, as busi- nesses climb up the computer food chain to bigger and more powerful systems, affordability and migration challenges have kept many of them from gorging on the sought-after delicacy known as massively parallel pro- cessing (MPP). That’s about to change. AT&T Global Information Solutions (GIS), the world’s leader in MPP technology, has introduced an enterprise server line that will make mid- to high- end commercial computing acces- sible to companies of all sizes and tastes. The server line was unveiled in September at the Gartner Group Commercial Parallel Processing Conference in Chicago. Branded WorldMark, the sys- tems offer a combination of “We focused on a single goal and found ways to work smarter...” —John Levchuk nepenenececececcecececcsscececencccccsscnsecscssencccsseccssanccenes affordability, scalability and per- formance never before seen in the computer industry. They lower the entry price for Teradata-based MPP systems by approximately one-third, making MPP systems affordable to many companies for the first time. The series ranges in price from $50,000 for the low- end. symmetrical processing (SMP) system to $660,000 for a basic MPP system. “The WorldMark family is the technical foundation of GIS’s current and future systems busi- ness from this day forward,” said - Tom Mays, senior vice president, GIS’s Computing and Communi- cations business. “It provides a new foundation for enterprise computing that allows us to strengthen our position as the world leader in commercial MPP technology.” : The line supports GIS’s core: business strength—enterprise computing—and the company’s commitment to maintain its lead- ership position in mission-critical. and data warehouse applications. The servers incorporate a common hardware. building block across high-end SMP, clustered and MPP systems. That means customers can grow their hardware, database systems and operating systems at their own pace, starting with a four-processor system and expanding it to incorporate up to thousands of processors. “The use of common hard- ware and software in the servers offers investment protection across GIS’s entire range of servers,” said Gene Lee, research manager, International Data Corp., an indus- try consulting firm. Lee added that WorldMark’s introduction will lower GIS’s entry point for its data warehousing solution and opens opportunities for the company beyond the Fortune 100. Z Customers already have responded positively to the | announcement. Food Lion Inc., a North Carolina-based supermarket chain, has ordered the WorldMark 5100C server for a data warehouse application. 2 John Levchuk, who led the WorldMark Series 5000 realiza- tion team, credited the server fam- ily’s successful development to the efforts of engineering and manufacturing employees at GIS plants in Columbia, S.C.; Naperville, Ill.; San Diego and El Segundo, Calif. “The team was faced with the challenge of bridging three levels of computing with one common system by a time mandate that many people thought was impos- sible to meet,’ Levchuk said. “We focused on a single goal and found ways to work smarter, which allowed us to move faster without compromising the in- tegrity or quality of the system.” Hi Relief Teams Bring Services and Supplies continued from page 1 40,000 pounds of assorted goods onto charter airplanes and a ship. In the meantime, while UCS relief teams helped repair employee homes and NSD technicians worked to restore _long-distance service, other business units pitched in to help the business and its employees: e AT&T Tridom engineers provided the U.S. Army Cofps of Engineers ‘with immediate VSAT satellite communica- tions to help coordinate disaster relief efforts. e AT&T Submarine Systems staff helped set up calling centers to allow the community to send more than 10,000 free messages to loved ones around the world. In addition, the Charles Brown cable ship provided lodging for AT&T relief crews. ¢ The Caribbean/Latin Ameri- ca Region sent an emergency coordinator to work on various projects and set up groups to sup- port island teams. e AT&T of Puerto Rico pro- vided dialtone from its PBX to handle the calling center, as well as cellular telephones and walkie talkies. It processed 2,500 Virgin Islands outbound messages, and even donated cash to Virgin Islands employees. ¢ Health Affairs sent Em- ployee Assistance Program coun- selors and a medical doctor for employee and family support. ¢ Government Markets pro- vided satellite links for the gov- emment emergency agencies. “The spirit of teamwork has been demonstrated by all AT&T employees who came together in response to this disaster,” said Barry Florence, president, AT&T VI. “We should all feel proud.” ONTARIO—AT&T CANADA and three Canadian banks have agreed to invest new capital in Unitel and reschedule Unitel’s existing debt. © AT&T, Toronto Dominian Bank, The Royal Bank of Canada and the Bank of Nova Scotia would invest up to $250 million in exchange for equity in the company. AT&T Canada has agreed in principle to provide certain management and consulting services to Unitel under long-term contracts, including use of the AT&T brand name. In addition, Unitel’s recent streamlining efforts, com- bined with this loan rescheduling agreement, will ensure Unitel’s long-term viability and strengthen its capacity to continue provid- ing leading-edge telecommunications services. ; PARIS—BUSINESS COMMUNICATIONS SERVICES will provide European business customers with services to access and use the Internet as a tool for gaining business advantage. As of Oct. 1, AT&T Internet Solutions is covering. the full spectrum of business needs from providing leased-line connections to the Internet, to establishing and managing a World Wide Web site, to full sup- port for electronic commerce and publishing. AT&T Internet Solutions is an extension of AT&T’s entry into the Internet mar- _ ket that began with its announcement of AT&T WorldNet Services in the United States in August. Additional services will be announced and made available in Europe as the global Internet market develops. ACCRA—ATA&T has signed a $4.8 million contract with Celltel Ltd. to provide cellular management services in Ghana, West Africa. Under the agreement, AT&T would provide three on-site AT&T directors in Business Operations, Customer Service Positioning and Network Planning and Operations to assist in running Celltel’s cellular business in Ghana. The AT&T-Celltel agreement is the first of its kind involving AT&T in Africa. JAKARTA—Indonesia’s first ISDN (Integrated Services Digital Network) service recently was inaugurated by Indonesian President Soeharto. ISDN is a state-of-the-art technology that will revolutionize telecommunications in Indonesia, and support the country’s development into a major business hub for the region. The service was installed by AT&T Network Systems Indonesia, a joint venture with PT Citra Telekomunikasi Indonesia, established in 1993 to manufacture, assemble and test advanced telecommuni- cations equipment. The plant is located in Cibitung, West Java. Le Seance TEL AVIV—WORLDPARTNERS, an alliance of global communica- tions companies that offers seamless voice and data services to multinational businesses, will offer WorldSource Services in Israel through Bezeq Israel Telecom, Israel’s state-owned telecommunications service provider. Bezeq is the first carrier in the Middle East and the twelfth in the world to become a WorldPartners member. WorldPartners was launched by AT&T, KDD of Japan and Singapore Telecom in 1993. Other members include Unisource, Hongkong Telecom International, Telstra of Australia, Telecom New Zealand International, Philippines Long Distance Company, AT&T-United Kingdom, Korea Telecom and Unitel of Canada. LIMA—NETWORK SYSTEMS GROUP (NSG) has completed installa- tion of a cellular digital packet data (CDPD) system in Peru, the first such installation in Latin America. The CDPD system is an extension of NSG’s $30 million contract with Tele2000, one of Peru’s wireless services providers, to install a cellular voice communications system that will serve 50,000 subscribers by 1996. CDPD is a way of transmitting high-speed bursts of data over a digital wireless network. NSG’s system includes mobile database stations, a mobile data intermediate system, and asso- ciated system software. The system is integrated with the AT&T Autoplex System 1000 and Series II cell sites, which are cur- rently being used in Tele2000’s cellular network. = al & G a = = s ~ MAKING INROADS Helen Dunne, a computer science student, was one of the 234 Inroads interns who worked throughout AT&T this summer. toy SPN sa ae is: National Organization Celebrates 25-Year Partnership with AT&T By TAWNJA CLEVELAND AMONG THE HUNDREDS OF trees spread throughout Chicago’s Grant Park, one stands with a spe- _cial meaning. It represents a ‘group of 25 students—including some who worked at AT&T— _who in 1970 were the first to join Inroads, an organization that places talented minority students in corporate internships and pre- _ pares them for corporate and community leadership. The tree planting was one of many events that marked Inroads’ 25th anniversary in July. In another ceremony during the five- day celebration, Inroads honored AT&T for 25 years of “extraordi- nary and consistent sponsorship.” _ The company received an award _ for being a charter sponsor and was one of two corporations inducted into the Inroads Corpo- rate Hall of Fame. “The Hall of Fame is the highest award Inroads bestows,” said Charles Story, president and chief executive officer of the non- “profit organization. Retired Human Resources Vice President Bob Gaynor also was inducted this year for his contribution to the growth of Inroads. Gaynor was a founding member of the Inroads board of directors in Kansas City, Mo., and Northern New Jersey, and was vice chairman of the national board until 1993. Building a Win-Win Partnership What began with 25 stu- dents, one office and 17 sponsor- ‘American Red Cross Selects GIS. For Blood Information Network By ANNE WAINSCOTT TO A HOSPITAL, A SAFE, reliable blood supply can mean the difference between life and death for the patients in its care. AT&T Global Information Solutions (GIS) is safeguarding that precious lifeline by providing a secure, high-speed blood infor- ' mation network to the nation’s largest blood collector and distrib- utor—the American Red Cross. The network, BioNet, will link all Red Cross Biomedical Services regions nationwide. Blood collection sites will send data via computer to nine of the Red Cross’s blood-testing cen- ters, which will be linked to a central system in Washington, D.C. Even remote sites will be able to instantly share informa- tion about donors, blood quantity and blood types in stock. “We expect BioNet to be the benchmark in the blood banking industry,” said Tom Woteki, Red Cross vice president, Biomedical Information Systems and CIO, Biomedical Services. GIS is developing the sys- tem with Cabletron Systems Inc. and Cisco Systems Inc. The con- tract’s value is expected to be approximately $30 million. A multilayered approach to network security provides the Red Cross with the confidence that its network is secure and with the flexibility to monitor and manage the network easily. For example, ing companies has grown to include more than 6,000 stu- dents, 46 affiliates and almost 900 corporate sponsors. From the . beginning, AT&T made a com- mitment to support Inroads through grants, student training and intern sponsorship. It is one among many internship pro- grams AT&T supports on a local and national level. In recent years, the commit- ment to Inroads has become stronger than ever. The company has sponsored more than 100 interns every year for the past seven years. And nine times in the last decade, AT&T has been the largest sponsor of interns— 138 nationwide. Bill Moore, AT&T national account manager for Inroads, the design permits any authorized user of the network access to information no matter where it resides. Security for dial-in access was provided via AT&T’s InterSpan SecurID Card with additional levels of security sup-. plied at the server level. GIS was the unanimous choice of the Red Cross selection team. “We chose AT&T to design this new infrastructure because it is the world’s networking leader,” Woteki said. “We need the most advanced and reliable network for such a significant project.” “The differentiator was our -ability to develop and deliver an end-to-end integrated networking solution,” said Mark Dudderar, national account manager, GIS. “Overall, we represented a single cohesive team to the American Red Cross. The team included several business units and outside partners—all with one common goal—and the customer recog- nized this.” Morristown, N.J., says there is a simple reason for participating in the program. “Inroads’ strategy matches AT&T’s strategy of recruiting, training and develop- ing the very best employees,” he says. “At the same time, Inroads students are a critical element to our diversity strategy.” And everyone wins. Ac- cording to Hal Burlingame, senior vice president, Human Resources, “When we invest heavily in the personal growth of Inroads stu- dents, they, in turn; give back to us their new ideas, their enthusi- asm, their talent and the rich diversity of their backgrounds.” Not a Typical Internship The Inroads process is not easy. Students must maintain a 3.0 grade-point average. In the summer, when many students spend Saturdays relaxing, In- roaders attend training sessions that cover management skills, effective communications, busi- ness sophistication and commu- nity involvement—all of which prepare them for corporate life. Students usually spend two to four summers interning at a sponsoring company. They work - with mentors and supervisors to design a career development plan and to foster personal growth. Dick Maybury, national vice president, Global Communications Systems, and Jim Croll, vice president, Network Sales, Business Communications Services, Lisle, Ill., are among many employees personally involved in sponsoring and men- : toring interns. “It’s a tremendous joy to work with the interns and watch them grow and expand the boundaries of what they consider possible for their lives,” says Maybury. “They’re truly among the brightest and best this country has to offer”’ Maybury and Croll received Inroads Human Resource Quality Awards last year for help- ing to reinforce the Inroads-AT&T partnership. ; Helen Dunne, an intern at Global Information Solutions, St. Louis, agrees that she has gained valuable experience through Inroads. “I learn so much more on my internship than I do at school,” says Dunne, a computer science major at St. Louis University. Continued Growth for the Future The success of Inroads interns at AT&T relies on the commitment of supervisors and mentors. “They provide interns with crucial guidance and knowl- edge that often involves unwritten information about corporate cul- ture and corporate success,” Moore says. “We need effective mentors to ensure the success of our interns and, ultimately, to fulfill our commitment.” For more information about Inroads internships or how to become a sponsor or mentor, con- tact Bill Moore, 201-898-8440, attmail!ernpso1!moore. Hi Business: —ERGNews : Volume 2, Issue 10 © October 11, 1995 Published by the Public Relations & Employee Information Division. Editor: Marianne Carlton (attmail!macarlton) Production Manager and Photo Editor: Vivian Hope (attmail!vhope) Production Assistant: — Marilyn Choy (attmail!mchoy) Distribution Manager: Betty Torell (908-204-2319) Writers: Ollie Hartsfield (attmail!ollie]) i Ed Lopez (attmail!edlopez) Suzanne Sidhu (attmail!ssidhu) Anne Wainscott (attmail!awainscott) Collins Yearwood (attmail!cyearwood) Design: M.J.Ng Design New York City To contact AT&T News: call 908-221-4466 send electronic mail to: attmail!talktous use fax number: 908-204-2118 or mail to: AT&T News 175 Morristown Road Basking Ridge, NJ 07920: All letters will be treated as having been submitted for publication. The editors reserve the right to edit letters for length and clarity. Opinions expressed in letters to AT&T News do not necessarily reflect the views of AT&T's - management. : AT&T service marks and trademarks are published in italics in this publication. A00% B4~7= Printed on recycled paper. ley 93. 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