From: David Sternlight <david@sternlight.com>
Date: Fri, 19 Jul 1996 21:26:07 +0800
To: cypherpunks@toad.com
Subject: RE: ABC news on Internet Telephony
In-Reply-To: <199607182054.NAA04198@well.com>
Message-ID: <v03007603ae15017fd230@[192.187.162.15]>
MIME-Version: 1.0
Content-Type: text/plain


At 1:54 PM -0700 7/18/96, talon57@well.com wrote:
>David Sternlight writes:
>
>>There's something fundamental going on here beneath the surface.
>>Surprisingly, a recent item (maybe the one you reported) on this
>>suggests that the big phone companies are trying to use this
>>phenomenon rather than stop it. I think it was AT&T who announced
>>that they had web software that improved the quality of such
>>internet voice calls. Surprisingly constructive, in contrast to
>>the coalition of small phone companies screaming for the FCC to
>>"stop it". The FCC has wisely said they're not going to act right
>>now because it could kill an incipient new technology.
>
>There is something fundamental going on here, a lack of common
>sense, and/or critical reasoning.

Starting off with defamation is a sure tipoff that what follows is crap.
And sure enough...

>
>Lets try it again. Who is the most likely to be disintermediated by
>a global packet network? (how do you get to your ISP?)
>
>I assume by "big phone company" vs "little phone company" you are
>refering to long distance vs local service, tell me, if the RBOC's
>continue merging, at what level do they become a " big phone
>company."

No. I'm referring to the consortium of small phone companies that asked the
FCC to stop it, in contrast to big phone companies which explicitly refused
to join in that request. The big ones were both long-distance carriers and
big local ones (a distinction that will soon disappear).

>
> The RBOC's are not the only local service providers of course,
>here in Illinois alone there are more than 80 (at my last count)
>providers of local service, and soon there will be many more.

And...?

>
>The other "urban myth" you are helping to support is the notion
>that it is the local providers that are fighting deregulation.
>Ameritech filed for total unbundling in March of '93, and you don't
>see them insisting on having a percentage of the long distance
>market before the long distance companies are allowed to compete in
>the local loop.

I'm doing no such thing. I'm reporting the empirical data. Have you some
problem with facts?

>
>ADSL is an interesting attempt at digital telephony but expensive
>and basically would mean replacing existing central office
>switches. (backbone bandwidth)

I'm not sure this is accurate. The ADSL modems are already down to the
price of v.34s at the start of v.34 and ADSL is still in its initial stage.
Being able to sell 6 MEGAbyte/sec bandwidth over ordinary copper phone pair
will increase telco revenues substantially with little additional cost
except at the switch. Switch mods don't require replacement and their cost
per dollar of revenue (even if they give away 6Mb bandwidth at ISDN prices
for 128Kb bandwidth) is pretty low. They could even charge what the cable
guys do for basic service (using video dial tone), add current charges for
local phone service, include a free Internet connection, and make money. In
fact, PacBell stopped wiring California for fiber and simply buried
incomplete cable in most locations last year because ADSL is so much better
a deal, infrastructure cost-wise. If you haven't already done so you should
check out the web sites for the ADSL consortium.

>
>In a packet network you have to either dedicate a portion of the
>bandwidth for a synchronous circuit, or you have to have a very
>fast network and use very small packets (ATM), expensive either
>way.

ATM is going bye-bye according to the trade press. It IS too expensive. As
for the synchronous circuit, if you're talking a signalling path that's
provided for and takes a tiny part of the bandwidth. At the switch it won't
look any different than today's call routing.

>
>A single central office has many times the bandwidth of the widest
>part of the internet, and the average state has hundreds of CO's.
>If even a small portion of the Internets current users tried
>placing a call things would grind to a halt. A huge increase in the
>number of backbones and their bandwidth would solve this, but who
>will pay the bill?

Now we're back on topic. Dunno how the increased bandwidth will be paid for
if lots of people start doing internet phone. Perhaps a new pricing model
with metered, but not distance-sensitive rates. Perhaps a special charge
for voice packets. Perhaps the number of subscribers attracted by cheap
phone will be enough to pay for the bandwidth under current pricing models.
Perhaps the split between the ISPs and the backbones will have to change.
Love will find a way.

>
>TANSTAAFL

Last time I looked my ISP was charging me about $20 a month--hardly "free".
And business users pay more.

>
>Sometime ago the discussion was on the cost of laying new fiber,
>may I suggest  the realworld heuristic of "a million dollars a
>mile."

Naah. The existing bandwidth that would go dark if phone calls shifted to
the net would become available. And I understand there's a huge amount of
dark fiber already in existence. I don't think this is the scarce resource.
I'ts starting to look like you're attempting proof by assertion rather than
referring to the known data.

>
>Please note I am not trying to make fun of anyone personnally, I am
>in the words of Jubal Harshaw "heaping scorn upon an inexcuseably
>silly idea, a practice I shall always follow."

I will refrain from heaping scorn on what appears to be a wild set of
ill-thought-through and uninformed objections. Your better-informed
colleagues will do it for me. If it's any comfort, I thought exactly as you
do until I started to read the discussions of this topic by experts.

(By the way there's a lot of material on Internet Phone on AT&T's web site.)

David