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Telephone Network Congestion Hype
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Info-Policy-Notes - A newsletter available from listproc@tap.org
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INFORMATION POLICY NOTES
November 4, 1996
Telephone Network Congestion Hype
In recent months there have been a rash of reports that the telephone
network is suffering congestion from Internet usage. There is much reason
to be skeptical of such claims. One reason is that Internet Service
Providers (ISPs) have more customers than telephone lines -- most ISP's
have 10 to 20 residential customers per incoming line -- which makes it
impossible for more than 5 to 10 percent of their customers to be
connected to the network at one time. Telephone companies are also
actively promoting second telephone lines, which are often purchased for
use with modems, the putative source of congestion. PacBell, one of the
firms complaining the most about Internet users, is now giving away 5
months of free Internet usage to persons who purchase a 2nd phone line.
[See: http://www.pacbell.com/ideas-offers/offers/addline/j-second.html]
This is a portion of our testimony on this topic in a Maryland PSC
proceeding, followed by a note by Roger Bohn that was posted to com-priv
on the same topic. jamie
BEFORE THE MARYLAND PUBLIC SERVICES COMMISSION
In the Matter of the Residential )
Intellilinq BRI Service Offering ) Case 8730
of Bell Atlantic, Maryland, Inc. )
October 15, 1996
PREPARED TESTIMONY OF JAMES PACKARD LOVE
on behalf of
CONSUMER PROJECT ON TECHNOLOGY
Q13. What about network congestion?
A13. There is no evidence that ISDN is causing any
network congestion. Nor is there much evidence that
personal computers are causing network congestion.
While it may be the case that lines for Internet
Service Providers (ISPs) are used heavily at certain
times of the day, it does not follow that
residential users are causing problems.
Telephone networks are fixed cost plants.
The cost of the network is determined by the build-out
at any given time, regardless of usage. The only
"usage" cost is based upon the "build-out" for peak
usage. The residential network is built according to
certain assumptions regarding usage. The important
issue is the proper "capacity" for the system.
People who use the Internet as dial-in users don't
dial in all at once. They just don't. People have
complicated lives. They eat, sleep, go to school,
go to the movies, play with their children, and do
other things which don't involve the Internet.
What do we know about Internet usage? We know
that ISPs do not have one line per customer. They
have far less than one line. According to responses
from ISPs, most firms have between 10 and 20
customers per incoming line. That means simply that
only 5 to 10 percent of their customers can be using
the service at any given time. If ISPs only have
one line for every 10 to 20 customers, then BA has
to show that the residential network is build for
less than 5 to 10 percent of the customers to be
connected at one time. If they can't show that,
then they do not have a case for charging for usage.
Q14. What about congestion at the ISPs?
A14. ISPs, like other businesses, may use lines
intensely. That isn't necessarily bad for BA,
because BA is selling telecommunications services to
the people who make the incoming calls. For
example, BA is promoting the sale of second
telephone lines. These POTS lines do not generate
much in long distance revenue. They are used mostly
for teenagers, modems and faxes. When BA sells an
apparently profitable POTS line so a consumer can
call an ISP, BA is making money on the sale of the
residential POTS line. If the residential consumer
could not call an ISP, many consumers wouldn't need
the second POTS line. The ISP is generating a
demand for something that BA sells--residential
lines.
Q15. Should ISP's pay higher fees?
A15. BA has a practical monopoly in the residential
market, and they are also an active ISP. You can't
allow BA to discriminate against their rivals in the
ISP business. Lots of businesses make intensive use
of their lines. Our organization has a PBX, and it
is often congested during the day. ISP's should pay
the same rates as other businesses pay for their
lines.
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Note by Roger Bohn on PacBell's 2nd line promotion to com-priv
mailing list.
---------- Forwarded message ----------
Date: Mon, 4 Nov 1996 16:07:57 -0500
From: Roger Bohn <Rbohn@UCSD.edu>
To: Multiple recipients of list <com-priv@lists.psi.com>
Subject: Re: Sales of second phones, a major profit driver
At 1:30 PM -0500 11/4/96, Sean Donelan wrote:
>Compared to the doom and gloom studies Bell Atlantic and other RBOCs
>published last month about how the Internet is ruining the telephone
>network, this quarter's financials statements are positively perky.
>--
>Sean Donelan, Data Research Associates, Inc, St. Louis, MO
> Affiliation given for identification not representation
Last Thursday (?) I heard a long story about this "growing problem" on
Marketplace, the NPR-carried business news program. The story was, as most
are, completely one-sided. It talked about the COST incurred because of
longer phone calls, but nothing about the REVENUES.
That night I got home and found, in my mail, an aggressive solicitation
from: !! Pacific Bell!! for a second phone line. And, as an inducement
if you get a second line they offered to throw in:
5 months free, including unlimited usage, on their new Internet service!
So obviously their marketing people believe the opposite of what their PR
people are saying. To me their PR smells of a standard attempt by a
regulated (quasi) monopoly to influence the California regulators.
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Roger Bohn Rbohn@UCSD.edu
University of California, San Diego
Internet traffic is not free. It just looks that way because someone
else is paying.
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