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Re: Smoking gun in CA
> >The solution is not popular with this group but if I was a telco, I'd
> >attempt to get the FCC to reclassify Internet service so that I'd receive
> >access fees on each minute someone connected to an ISP just like the
> >telco collects when you place a long distance call. Then I could
> >probably relax and not worry about flat rate ISDN or POTS.
> That is precisely what PacBell has recently proposed to the FCC, in the form
> of a private "white paper" or something that doesn't have a Petition number
> and therefore is neither public nor open to refutation by the public. This
> is also what Mad Monk Mark Fowler, Reagan's FCC head, proposed in 1987; it
> became mislabeled "modem tax" and long after it was (for the time) dead and
> done with, the notorious Modem Tax Chain Letter still circulates from 1988
> It's a wretched idea. First off it's impossible to cleanly draw a line as
> to who pays and who doesn't - I can dial my office "inside the firewall"
> private access point, and use the company's Internet (firewall) connection,
> or dial the "outside the firewall" public access point and still get there.
> Does the company pay for its PBX extension modems? Non-PBX-extension
> modems? What if they're 90% used for intra-company use but *can* connect to
> the Internet? It goes on and on. You can't pull it off.
This is already a problem with leakly PBXs delivering voice calls between
cities from and to public networks. The reality is that only public network
providers worry about this sort of thing. The existing voice access charges
are already causing problems because of Internet phones.
> But beyond that, if you could, the result would be disastrous. Today's
> typical dial-up ISP charges around a buck an hour, net. It might be $20
> flat rate with a typical user at 20-30 hours month, or a mix of cheap and
> expensive (overtime) hours. But CCLC long distance carrier payments are
> around $2/hour, more or less (higher in NYNEX than PacBell, for instance),
> plus intra-LATA mileage. That's typically a 200% surcharge. It would KILL
> the dial-up business as we know it. My guesses: It would possibly put
> Prodigy and AOL out of business, Compuserve might survive on its business
> users, on a smaller scale, but Wow would go away before nightfall.
As you point out, the CCLC payments are out of line already and there will
no doubt be pressure to drop the charges much lower, eliminating another
source of subsidy for the LEC. Why should AT&T and eventually an end
long distance user provide subsidy?
> Of course the demand for net service would not go away. The CATV companies
> would gleefully pick it up, at $30/month flat rate, with a 400 kbps-plus
> data rate.
My guess is that this is not going happen for a long time. These networks
will not be built based on $30 unlimited subscriptions unless the service
is a hobby for both the customers and the providers. ISDN is a giant marketing
trial. If enough subscribers (or their employers) are willing to shell out
$100-$200/month for access, competition will come with faster and eventually
cheaper options. If the LECs get beat into submission and the price of
ISDN gets stiffly controlled, we'll be living with it for many years to
come. I know this sounds like a rather distorted view, but it's worth
considering besides, I havn't seen any RBOC responses so I feel compelled
to take the opposing view :)
They'd finally get off the dime and get serious about doing this
> quickly, not slowly. And while they're at it, they'll also sell voice dial
> tone, since they're allowed and Lucent (and others) will be happy to sell
> them the needed HFC gear. So the telcos would not only earn the wrath of
> their potentially-best residential customers, but they'd lose ratepayers in
> droves. (Note that most telcos don't have residential customers, just
> subscribers or ratepayers.) In the end they'd find themselves burdened with
> a heap of stranded investment and negative growth.
Don't hold your breath waiting for residential loop competition. In many
areas the line rates are so well (??) controlled, I suspect it would be
difficult to make any money considering the expense of competetive plant.
Possibly, some of the IECs will go to HFC providers for local bypass but
this will probably end up being a cream skimming technique to grab business
customers and possibly wealthy residential areas. LECs will adjust the access
and loop resale rates just below the threshold of pain.
> I've previously coined a term for this telco plan: Seppuku Marketing.
> They've done it before, and *could* do it again. Telcos have *no* sense of
> marketing. (If they did, Bell Awful wouldn't have dared file its proposed
> Resi ISDN tariffs, nor would PacBell. And US West would have labeled its
> three tiers differently.) Telcos only understand how to have an
> *adversarial* relationship with "ratepayers". The only "customers" are the
> giant Centrex users and others with influential, mobile megabucks.
This is the defination of "customer." Someone who can move their business :-;
> I cast my vote for a *high* free-hours threshold in order to impose
> cost-based charges (I'd market this as "semi-permanent circuit service") on
> the few users who never hang up, while leaving 90%+ of users on flat rates,
> making efficient use of the telephone network.
This is certainly a reasonable idea *if* it could be accepted for all
circuit-switched services. In order to do this, you need to do something
that looks like local metering. For example, local calls during the day
cost 3 units/min, evening 1 unit/min and nights 0 units/min. Basic service
includes 5,000 units. There will be plenty of resistance to this from
very vocal groups that oppose any adjustments in local voice. After the
AARP and any number of other groups fight this endlessly costing everyone
a fortune in legal fees and mountains of paper, little will change.
No wonder the LECs go after ISDN rates first.