[12781] in Commercialization & Privatization of the Internet
In the matter of flat-rate long distance phone service
daemon@ATHENA.MIT.EDU (Tansin A. Darcos & Company)
Sat May 28 18:43:16 1994
Date: Fri, 27 May 94 23:26 EST
From: "Tansin A. Darcos & Company" <0005066432@mcimail.com>
To: Everyone Lurking on COM PRIV <com-priv@psi.com>
Karl brings up the same issue that Arthur C. Clarke did in one of the
2001-Series books (2010 or 2060).
He proposes that if the settlements issue were solved we'd have flat
rate long distance service, perhaps even nationwide.
I am still trying to figure out how this could be done. In simple terms,
even if you eliminate the settlements being paid to the local telephone
companies at both ends, you still have to figure in the cost of having a
network installed, people who run it, etc.
In the Internet, people pay their provider for the pipe that comes in. This
is where the provider makes his money, by selling capacity of pipe to
different customers.
Now if you have flat rate long distance, how do AT&T, MCI, Sprint, Wiltel/LDS,
and the others make any money?
As it stands now, they make money by people buying use of their network
by the minute. The only other way I can see to eliminate that is for
people to pay a network provider for connections. Or something else which
means they'd have to pay for it on a regular basis.
Even if you eliminated settlements, there is still miles of wire, routing
switches, routing software and personnel to run this stuff that has to be
paid for. Plus network control centers.
On Internet, this is all paid for by what we pay to the pipe sellers. I
am trying to see how you can eliminate charging for long distance phone
calls since *someone* has to pay for that network.
I think the estimate was that if we wanted to go with non-charged phone
service anywhere in the country, e.g. pick up a phone and call anywhere
without a service charge, that phone service would have to about double
in price.
Now if, what ends up happening is that with competition local phone bills
fall by 1/2 and long distance competition allows them to offer lots of
people unlimited long distance for $10 a month, with the result being that
yes, phone service costs twice as much to make all calls free, but phone
service now is 1/2 of the original rate, then that makes sense, e.g the
phone bill drops from $20 a month to $10 but long distance drops from
10-30c a minute to $0 but with a $10 a month charge, then that makes sense.
I am basing it on my own bills. I have three phone lines in my house, and
with no long distance usage, I pay $58 a month or almost $20 a line. And
that allows me a total of 195 local calls a month (at 65 each line) without
additional charges.
So is this the idea of where no-charge-per-minute long distance is coming
from? Or is there another idea. Because I'd like to hear it too.
--
Paul Robinson -- TDARCOS@MCIMAIL.COM / PAUL@TDR.COM
"We're going to blast through the Internet like the Four Horsemen
of the Apocalypse!" - Sonny Harari, TekWar "TekJustice"
