From: Rich Graves <llurch@networking.stanford.edu>
Date: Thu, 24 Oct 1996 20:42:14 -0700 (PDT)
To: cypherpunks@toad.com
Subject: Merc: PacBell predicts imminent death of the net; film at 11
Message-ID: <Pine.GUL.3.95.961024202749.24299C-100000@Networking.Stanford.EDU>
MIME-Version: 1.0
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Full text freely available at http://www.sjmercury.com/business/dial1023.htm
(they do one or two net-related stories "free" per day)

Pac Bell says Net use may collapse phone system

ISPs rebut dire, 'trumped-up' prediction

Published: Oct. 24, 1996

BY HOWARD BRYANT
Mercury News Staff Writer

As many as one of every six telephone calls in Silicon Valley now
doesn't go through on the first try because Internet denizens are
tying up the lines, Pacific Bell reported Wednesday.

Under normal circumstances, less than 1 percent of calls go
uncompleted, the company said. The situation is so dire that
California's entire phone system is in danger of breakdown, a company
executive said, with Silicon Valley especially on red alert.

[...]

But rather than being a sign of imminent collapse, critics called Pac
Bell's startling statistic a trumped-up charge designed to scare the
public and pressure federal regulators into ending a price break
Internet service providers enjoy when tying into Pac Bell's network.

''The Internet is a baby and Pac Bell has been in this game since
Alexander Graham Bell's bar mitzvah. Now they're saying that in the
last three weeks, we broke the phone system? Come on,'' said the head
of a service provider who asked not to be named for fear of reprisal
by Pac Bell.

[...]

At the heart of the issue is a pricing conflict between Pac Bell and
the ISPs. In 1983, the Federal Communications Commission gave
companies that offered Internet services, and other ''enhanced service
providers,'' an exemption from the per-minute fees that other
companies, such as long-distance telephone companies, pay to use Pac
Bell's network.

[...]

Wiping out the subsidy would force Internet companies to find new,
more efficient ways of pricing that better reflect actual usage,
Parker said.

In all likelihood, Net service prices would increase for consumers.

[...]

''This is clearly a ruse,'' said Dick Severy, director of public
policy for MCI. ''They've added 691,000 access lines
this year. Business lines are up. It's curious.''