[12799] in Commercialization & Privatization of the Internet
Re: In the matter of flat-rate long distance phone service
daemon@ATHENA.MIT.EDU (Karl Denninger)
Sun May 29 09:58:33 1994
From: karl@mcs.com (Karl Denninger)
To: 0005066432@mcimail.com (Tansin A. Darcos & Company)
Date: Sat, 28 May 1994 18:20:11 -0500 (CDT)
Cc: com-priv@psi.com
In-Reply-To: <11940528042611/0005066432NA2EM@mcimail.com> from "Tansin A. Darcos & Company" at May 27, 94 11:26:00 pm
> 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.
>
> 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.
Correct.
This is how the Internet works today.
You pay some kind of average charge. Some providers have a usage-sensitive
rate as well (MCSNet is one of these). Some have ONLY usage-sensitive
rates. And some have only usage-insensitive rates.
Competition decides whether or not the pricing model a provider chooses is
a good one. If it is, then you stay in business. If it is not, then you
go out of business.
However, when the government mandates a per-minute fee on BOTH ends of a
connection, then you no longer have a choice, as the provider of that
service then cannot enter into agreements with HIS suppliers (and everyone
has 'em) for flat-rate service.
Of course all of these flat-rate discussions are predicated on some
statistical average. That's ok. What's not ok is the gummermint putting a
<floor> on the averages, which is exactly what a law-enforced settlement
does.
Consider the situation that would arise if per-byte settlements were the
rule rather than the exception on the Internet. Do you think you could
anonymously FTP to places like you do today, and pull, oh, 100MB file sets
with impunity?
No chance.
You'd get a VISA: prompt right after you sent in your password.
--
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