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i-phone for bells

  Today, CNBC reported that Duetche Telekom(sp?) has committed to invest
  $30,000,000 in products from VocalTec (an Israeli internet telephony
  software company) as well as purchasing a minority interest in the software
  The CEO from VocalTec was interviewed and led the viewers to believe that
  testing and trials are underway by telephone companies in Europe, Asia and
  the US that would allow locally based servers to route interexchange calls
  onto and off of the internet.  A local internet provider in Nebraska had
  attempted this feat a few months ago and was called on the carpet by the
  Nebraska Public Service Commission because he was not a "phone company."
  Here's how it works. In New York, a subscriber to the i-phone service dials
  an area code and phone number from a standard telephone.  At the local
  switch software recognizes that the request is from a subscriber and routes
  the call onto the internet to a server located in the market that the area
  code identifies (say LA). The LA server then completes the call to the
  local number.  
  No long distance occurred.  
  No long distance switched interconnection occurred.
  If the baby bells banded together in an effort like this, they could meter
  the calls at rates that would savage the long distance carriers, carry the
  traffic over their own unregulated owned and leased digital transport
  bandwidth and eliminate the need for futzing around with MCI, ATT, Sprint
  or anyone else.  
  Hence, there is no need for interconnection agreements to obtain access to
  long distance markets. By simply usurping the defined model with a newly
  defined technology that looks, smells, and feels like long distance to the
  consumer...but is really inter-lata distance internet telephony, they could
  bludgeon the long distance carriers while keeping a tight grip on their
  local loops.
  I don't recall seeing anything about that in the 96 Act.  Did you?
  Perhaps the interconnection stall that has thwarted competition has allowed
  the baby bells the time to develop and deploy an entree to the long
  distance communication markets without the need to allow anyone into the
  local loops.....ever!
  What do you think?
  Have a great Labor Day Weekend.
  Rick Dahlgren