Brant Coopersmith, chairman of the D.C. lottery board, did a little boasting recently over reports showing a major surge in lottery revenues in the last six months and that the District now ranks No. 1 in the nation in per capita sales.
Coopersmith said the lottery has been made a more profitable and smooth-running operation despite a number of major obstacles, including what he described as a lack of cooperation or concern on the part of the Chesapeake & Potomac Telephone Co.
The lottery board may have lost up to $1 million in sales between December 1983 and April 1984 because of delays by C&P in installing 200 of 500 lottery ticket terminals at licensed dealers throughout the city, according to Coopersmith. The telephone company never offered a satisfactory explanation for the delays, Coopersmith said, adding that "they were arrogant beyond belief."
A spokesman for C&P said this week that there were some problems in the installation of terminals, but said part of the problem was that servicemen had trouble gaining access to the buildings and that some of the establishments were improperly wired.
Still, Coopersmith indicated that he believes the lottery board's experience with C&P should be taken into account as the city prepares to award a contract to install telephones in the new municipal office building at 14th and U streets NW this summer and eventually replace its government-wide phone system.
"For me, what it means is that we should seek an alternative technology for selling lottery tickets ," Coopersmith said. "The implications of the lottery board's experience for others is that anybody doing business with the telephone company . . . should have a solid contract concerning delivery date."
With the apparent backing of Mayor Marion Barry, C&P is seen by many city officials and industry experts as the odds-on favor to win up to $20 million in D.C. telephone contracts during the next few years.
From the beginning of the District's tortuous and politically charged decision-making process, the administration has appeared determined to stick with C&P, despite mounting evidence that other firms could provide less costly and more technologically advanced service.
Jose Gutierrez, former director of the Department of Administrative Services, was demoted after he publicly stated that the administration attempted to steer the contracts to C&P as a favor to Delano Lewis, a C&P executive vice president who served as a top-level adviser in Barry's two mayoral campaigns.
Gutierrez conceded last week that until his falling out with the mayor, he wasn't terribly bothered by trying to work out a deal with C&P -- provided the company was competitive with other firms seeking city business.
"I was saying, 'Let's go with C&P, but let's get them to match [their competitors],' " Gutierrez said. "But C&P would never match. They were always higher . . . . What I was trying to do was find a middle ground."
As far as Gutierrez and other critics of the phone company are concerned, C&P doesn't feel obliged to hustle and cut costs like other companies in the highly competitive telecommunications industry, partly because it has friends in high places in the D.C. government.
C&P recently obtained permission from the D.C. Public Service Commission to lower the rates it charges business and government customers for Centrex service at the same time it was seeking a major increase in residential rates.
A telecommunications expert on Capitol Hill said last week that if the city goes ahead and awards big contracts to C&P without getting the best price possible, D.C. residents would be squeezed by having to pay higher taxes for C&P's more expensive government telephone service and higher residential phone rates.
"It would be the worst of all possible worlds," he said.
C&P's Lewis doesn't see it this way. He said his company is convinced that its Centrex business telephone service is the best and most economical system that the District can obtain. He said that C&P is pursuing an aggressive marketing strategy and is not attempting to exert political influence.
But not even Lewis' good friend the mayor is buying that line. Barry concedes that the Centrex service being offered by C&P is not the most technologically advanced or most economical available. However, as he explained at his latest press conference, the District may have no choice but to stick with C&P to help assure the financial well-being of the company, which is a major employer in Washington.
Barry said he feared that if C&P's revenues began to shrink, the company might be forced to seek even higher telephone rates for residential customers than the major increases currently being sought.
"We have a responsibility to look at all aspects of every contract we give in terms of the social implications," Barry said. "So price and technology are not the only factors that you look at when you talk about telephones."