Re: The cost of ISDN vs. the cost of Social Engineering

[James Love <love@tap.org>]

  On Mon, 12 Feb 1996, Bill Frezza wrote:
  > Unfortunately, PacBell's original forecasts of the number of users that
  > would be located more than three miles from a central office were grossly
  > out of whack.  Rather than 12 percent, as estimated in its provisional
  > tariff filing, distant users jumped to an astonishing 30 percent . 
  
            Bill, I'm glad you can read the PacBell press releases.  But I 
  don't think that anyone argues that PacBell is trying to base its new 
  tariffs on its costs.  
  
     [snip, snip]
  
  > In what PacBell surely views as an opening shot in a protracted
  > negotiation, they proposed bumping ISDN charges up to $1.25 per hour per B
  > channel.  Similar moves are rippling though US West and Bell Atlantic,
  > which remain exceedingly wary of flat-rate usage schemes that might
  > encourage users to nail up connections permanently.  These tariffs would
  > make ISDN as prohibitively expensive as, say, America Online or CompuServe.
  
      Might is a good way to put this, since PacBell's own data show that 
  residential users are using the service less than 50 hours per month, 
  with the current tariff, which is unmetered after 5 pm and on weekends.
  
  > The Consumer Project on Technology (CPT), a Ralph Nader-backed
  > organization, would have you believe that this charging scheme is a dire
  > threat to democracy. 
  
       Don't recall making this comment, but I guess you are free to create 
  whatever straw man you want.
  
     [snip, snip]
  
  > The heart of the CPT argument is that it is evil for phone companies to set
  > prices based on "value" (i.e., willingness to pay) rather than "cost."
  > CPT's solution?  Give an administrative law judge extraordinary powers to
  > set ISDN prices!
  
      I don't recall using the term evil.  Is this just the way you write?
   "Extraordinary powers"    Ahhhhhh, Bill.  Just what do you think that 
  state public utilities commissions' DO exactly.  Why use terms like 
  extraordinary when the correct term is "ordinary?"  Setting rates is what 
  these commisions have the ordinary power to do.
  
  
  > Just stop for a minute and imagine Andy Grove teaming up with Ralph Nader
  > to argue that prices should be set by costs and not value.   I wonder what
  > a judge would chose as a "just and reasonable" price for a Pentium chip?
  
       Well, better to raise another red hering than to address the issue 
  at hand  -- price gouging on a monopoly service.
  
  jamie
  ----------------------------------------------------------------------
  James Love, love@tap.org
  P.O. Box 19367, Washington, DC 20036; v. 202/387-8030; f. 202/234-5176
  Consumer Project on Technology; http://www.essential.org/cpt/cpt.html
  Taxpayer Assets Project; http://www.essential.org/tap/tap.html