For Deutsche Telekom, the Phone User Is a Nuisance (int'l edition)

As for the question in ''When giants dance: Can old monopolists really change?'' (European Edition Cover Story, May 3), the answer is no--at least not Deutsche Telekom. Telekom will never change because it does not exist to serve the customer. Telekom, like too much German business, exists mainly for the benefit of government, directors, management, staff, and its workforce--with an occasional nod to shareholders, when pushed. For Telekom, customers are only a necessary evil, nuisances to be tolerated only as long as they can be fleeced to the full.

Telekom achieves that goal with jungle pricing, confusion marketing, and exorbitant installation charges. With no monthly flat rates for service, Telekom clings to by-the-minute rates on the outmoded principle of ''user pay'' and generally nickels-and-dimes to death the ordinary household user--long after it has been accepted that by-the-minute rates are the greatest hindrance to Internet use in Germany.

Will Deutsche Telekom ever adapt to 21st century customer-oriented marketing? Don't hold your breath. Bloated management and staff have it far too good to even consider radical concepts like ''the customer is king'' or streamlining for profits.

Frederic A.C. Lister
Nauheim, Germany

Brazil Doesn't Warm to Half-Baked Theories (int'l edition)

According to Robert J. Barro in ''The men running Brazil still don't get it'' (Economic Viewpoint, May 3), Domingo Cavallo, former Argentine Finance Minister, should take the same office in Brazil, with the mission of ''dollarizing'' the Brazilian economy. The currency replacement, as he says, is the definitive solution, and the objections are a mere question of national pride. Currency management would be a service to be purchased, as any other merchandise.

We could develop further the same concept of an interchange of politicians. Maybe a Vietnamese general could be hired as Defense Secretary to help the U.S. end the Yugoslavia fiasco, or a Cuban physician could help America heal its health-care system. And if Congress refuses to cooperate, bills and amendments could be purchased from better foreign Congresses.

It looks pretty sure that in the future there will be no more than three currencies in the world. But would people such as Barro like to have a Brazilian once in a while running the Continental America Reserve Board, as Europeans do? Is national pride a U.S. monopoly? Let Brazil find its own way.

Euben Monteiro Jr.
Rio de Janeiro

The article shows how some people, despite their position at leading educational institutions, put their personal views in minor issues ahead of professionalism and are politically incorrect and disrespectful to the people of an entire nation. I understand Barro's position about the need for sound economic policy, which is what Brazil's present administration is trying to build. What I find unacceptable are his ideas about national pride and self-respect, which, by the way, are two virtues that have contributed immensely to making the U.S. such a great nation.

Luiz Hamilton Lima
Sao Jose dos Campos, Brazil

How the Fed Fights Noise Pollution (int'l edition)

I agree that the Fed deserves credit for its latest achievements (''The Fed's new rule book,'' American News, May 3). What's amazing is that the measures deal mainly with handling information--with public relations, if you will.

Let me be more specific: The latest policies embraced by the Fed (namely the decisions to signal its intentions and to wait until there are signs in the market about the inflation rate) are among the ones economists advocated from the very beginning of their science. They said that informed people can make informed decisions, so the more (high-quality) information, the better.

When the Fed decides to signal its policies, the markets benefit. After all, it is the uncertainty people care about, not so much the inflation rate. By signaling, the Fed increases the signal-to-noise ratio, and everybody is better off.

On the other hand, the Fed's decision to wait until there are clear signs requiring a change in monetary policy is preventing companies from overreacting. By avoiding tampering with a process that works, the Fed allowed people to concentrate on their business, thus it further decreased uncertainty. Before, both noise sources were in the market, adulterating the decision-making process. We can only hope they'll stay out of it for a while.

Gabriel Iordache
Romania

Federal Reserve Chief Alan Greenspan apparently believes a ''technology-driven productivity boom'' has kept inflation quiescent despite tight labor markets and rising wages. With all due respect to the chairman, I disagree. I believe the lack of inflation is primarily caused by intense competition in many sectors of the economy, which has severely limited the ability of most companies to exercise pricing discipline on their markets.

I find the current macroeconomic situation especially ominous: intense competition coupled with rising labor costs and great industrial overcapacity. If demand falters for any reason (for example, if a stock market drop were to cause consumers to significantly reduce spending), the fixed costs associated with overcapacity will have a swift and severe negative impact on corporate earnings. Corporate restructurings would soon follow, in the traditional forms of layoffs, mergers, etc. In other words, the New Economy would look a lot like the old economy.

Technology has undoubtedly helped many companies to absorb cost increases and minimize the impact on profit margins. However, were it not for the dangerous combination of intense competition and overcapacity, most companies would raise prices in a heartbeat.

Paul M. Green
Cincinnati