First-Hand:The end of PicturePhone

Submitted by Edward Goldstein

By the time John deButts became Chairman of AT&T in 1972, PicturePhone had become an embarrassment to the Bell System. Late-night comedians feasted on its failures and business commentators marveled at the hundreds of millions of dollars that had been expended on its development and service introduction. Early in his tenure, deButts included PicturePhone in his famous "decision to decide" list and appointed a task force to recommend to the Board what should be done about it.

I want to tell the story of my involvement in carrying out his decision.

At the time, I was the Marketing Vice President of the New York Telephone Company. I had bee given that job two years earlier after 21 years of Bell System service -- sixteen years at Bell Labs, the rest in the Engineering Department of AT&T. One day, I had lunch with one of the members of theTask Force. He told me that it had concluded that one of the main problems with PicturePhone was that responsibilities for different aspects of the project were divided among Bell Laboratories, Western Electric, a couple of departments at AT&T and some of the operating companies offering PicturePhone service. He went on to tell me that the Task Force would recommend that a single individual, reporting to the Chairman, be made "czar" of all these activities. This was the kind of gossip that was routinely exchanged among managers of the Bell System. But it got personal when he showed me a list of ten individuals the Task Force considered candidates for that job, my name being on that list.

It was a job I did not want. I knew very little about PicturePhone and being czar of a project connected with it looked like a dubious career move to me. I went back to my office, closed the door and started making a list of arguments I would use if the job were offered to me.

This was on a Friday. The following Monday morning, I received a phone call from John deButts's secretary: could I come see the Chairman at two that afternoon? I assured her that I could. I pulled out my list and rehearsed my arguments.

Before I was admitted to the Chairman's office someone (perhaps Alvin von Auw, Vice President - Assistant to the Chairman) confirmed that the Chairman would offer me the job of PicturePhone czar and explained to me what it would entail. At the end of his explanation, he said, "Before you decide whether to take the job, let me tell you that John told the Bell System presidents last Friday that you would take the job."

Well, that took care of my list of arguments. Perhaps being PicturePhone czar was a bad career move, but there was no "perhaps" about what embarrassing the new Chairman of AT&T would be.