The Use of Management Science in Making a Corporate Policy Decision Charging for Directory Assistance Service

This paper presents a case study describing how management science techniques assisted a large corporation in making a decision which may ultimately affect almost everyone in the United States. It was AT & T's decision to recommend to its Operating Companies that they request approval from their public utility commissions to charge customers for using directory assistance service. Directory assistance is the system by which a telephone operator provides telephone numbers to customers on a real-time basis. The paper outlines the structure of the telecommunications industry, describes how directory assistance service is provided and indicates how customer use of the service has grown. Then, the analytical techniques that were used to assist in making the decision are described. These include: development of quantifiable objectives, determination of how customers currently use the service, construction of an econometric demand model, selection of optimal implementation methods, simulation of the economic impact, and analysis of potential customer reaction. This study led to the conclusion that charging would be beneficial and pointed out the particular charging plan that would be best.

As of March 30, 1976, charging had been approved in 14 states and regulatory decisions were pending in eight others. In areas where charging has been implemented customers have significantly reduced their dependence upon directory assistance and are making increased use of local telephone directories, personal number lists and other sources of telephone number information, They have expressed little dissatisfaction with the plan.