Re: cost of residential ISDN (fwd)

[hes@unity.ncsu.edu]

  jq@phcs.com writes:
  >hes@unity.ncsu.edu wrote:
  >> None of us would be objecting to usage charges if they were 0.01
  >> cent/minute. I think that we are objecting to the high proposed
  >> usage charges because we think that they are based on "value to
  >> the buyer", rather on the (reasonable) "cost to provide" - such
  >> a difference is a hallmark of monopoly.
  >Excuse me?
  >No one would object to 1 cent per minute?
  
    There is a difference of two orders of magnitude between the "0.01
  cent/minute" charge that I specified and the "1 cent per minute"
  charge that you are discussing.
  
  >That rate works out to $438.00 per month for a full-time connect.
  
    Well - $4.38/month - 
  > ...
  >Those people who currently are heavy (or full-time) modem users
  >are unlikely to change there connection patterns based simply on
  >switching to a wider pipe.  We will not take up any more or less
  >switch capacity based on converting to ISDN then we do now.
  
    I see heavy modem users as the prime candidates for ISDN, and the
  use of the "2B" for a data connection will take up twice the capacity
  of everything (except the local loop) compared to a modem.
  > ...
  >The arguments that ISDN pricing must reflect usage charges in
  >areas where POTS does not have a per minute rate seems specious
  >to me.  
  
    I'd argue that both decisions should be made correctly (and should
  be based on actual costs.)  In both cases there are *some* variable
  costs, and so it would be reasonable to have that portion of the costs
  reflected in usage charges.  My point in the paragraph quoted at the
  top is that we wouldn't complain about low/justified usage charges.
  However if they are sufficiently low, the telco might consider that it
  isn't worth the fuss to bill for them.
  
  >I do not believe that usage patterns for existing users
  >will change dramatically over the near term.  Of course new
  
    I agree that the change will probably be gradual - but there is the
  potential for a dramatic change when we look at the number of home
  computers which could be networked - and consider that the broadly
  attractive part of networking is the graphics/Web material which uses
  a lot of bandwidth.
  
  >switch capacity will be needed as the number of people using
  >data services increases, but that would be needed at the same
  >rate when the new demand is for POTS as it would be for ISDN.
  
    This may not be totally true - our discussion is over the % values.
  
  >I believe that all telcos should be required to provide some
  >sort of flat rate pricing plans for ISDN, and that those rates
  >be set based solely on incremental costs plus a reasonable rate
  >of return on investment.
  
    Why would you deny them the right to provide instead a cost-based 
  usage dependant?  (If there is no incremental cost of usage, then that
  would be a flat rate - if there were incremental costs, then it
  wouldn't be flat rate.  Shouldn't you be consistent and let the costs
  drive this?)
  
  >Several hundred dollars per month premium for ISDN is highway robbery.
  
    Only because that is outrageously more than the true additional cost
  (plus reasonable profit.)
  -- 
  --henry schaffer
  hes@ncsu.edu