From: jim bell <jimbell@pacifier.com>
Date: Wed, 21 Aug 1996 13:49:52 +0800
To: Brian D Williams <cypherpunks@toad.com
Subject: Re:phoneco vs X-phone
Message-ID: <199608202048.NAA16694@mail.pacifier.com>
MIME-Version: 1.0
Content-Type: text/plain


At 11:00 AM 8/20/96 -0700, Brian D Williams wrote:
>
>Jim bell writes:
>
>>What do you mean, "doesn't really fit the facts"?!?  What part of
>>it was incorrect?  Fiber-optic _is_ commonly used in inter-office
>>trunks, right? It doesn't wear out, right?  Higher usage doesn't
>>entail greater costs, right?  The capacity, while not strictly
>>infinite, is high enough so expanded usage doesn't strain most
>>links, right?  Finally, modern phone switches have sufficient
>>connect capacity so that they can handle usage which would have
>>been considered "unusual" by yesteryear's standards.  All 
>>of this points to an obvious conclusion:  Telephone companies do
>>not, in general, have increased costs as a consequence of
>>increased telephone usage.
>
>Fiber does not wear out per se, but it does need replacing, partly
>from the inevitable contractor accidents (landscapers) and
>occasional entropic events.

However, those events are generally uncorrelated with usage...

> Mux cards and repeaters do go bad on a
>regular basis, there is a correlation between usage and increased
>maintenance,

Well, technically that's true, but these devices are usually running 
continuously, not merely when a call is being made.  In other words, more 
talk != more failures. 

For the most relevant (though minor) example that I can think of, consider 
the typical laser diode used to drive fiber optic cables.  These devices 
have a finite wearout mechanism (as opposed to most IC's which generally do 
not wear out in normal usage), so they may be seen to have a limited 
lifetime.  However, in use they are continuously transmitting data, even 
when portions of the channel are unoccupied, so they have a constant life 
regardless of individual phone usage.


>and of course increased usage means increased electricity usage.

This is an extraordinarily minor effect, as you might imagine.


>One point that seems to be missed here is the very high cost of
>compliance with government regulations. If the internet phone
>people have to comply with the same regulations it will drive up
>their costs dramatically, and if the regulations are lifted for
>all, the RBOC's think they can out compete them.

If that is the main difference in costs, then we should abandon those regs.  
Another big cost is billing, which could be eliminated if usage were 
unmetered.   In any case, I tend to agree:  Make these changes, eliminate 
the LD/local subsidy, and  the LD companies would have no problem (at least 
domestically) competing against Internet phone.   (International may be a 
different story, because foreign telcos tend to be owned by countries.)  

Jim Bell
jimbell@pacifier.com