From: Vipul Ved Prakash <vipul@pobox.com>
Date: Wed, 21 Aug 1996 06:18:20 +0800
To: jimbell@pacifier.com (jim bell)
Subject: Phoneco vs X-Phone
In-Reply-To: <199608181544.IAA18394@mail.pacifier.com>
Message-ID: <199608200402.EAA00380@fountainhead.net>
MIME-Version: 1.0
Content-Type: text


> 
> Well, let's consider such costs.  Most of which (maintenance, management, 
> rolling stock) are unrelated to amount of telephone usage.  So there is no 
> reason that these costs should be unequally attributed to a person who makes 
> local calls 1 hour per day, as opposed to another who only calls 15 minutes 
> per day, for example.
> 
> As for the "laying new pipes" issue:  Years ago in the the US, when 
> inter-central-office trunk connections were all implemented using large 
> bundles of copper pairs, it would have been _correct_ to say that higher 
> telephone usage resulted in larger costs, since more trunk lines were 
> necessary.  Today, on the other hand, inter-office trunks (at least the new 
> ones, and I presume that even many of the old ones have been switched over) 
> are implemented in fiber optics.  Extra capacity is either automatically 
> available (since the capacity of a given fiber is unlikely to be fully used) 
> or can be fairly simply added by converting old fiber from about 450 
> megabits per second to 2.4 gigabits, or even faster rates which have become 
> more recently available.
> 
 
Your view point doesn't really fit the facts, but since it is not the
issue here, I'll let it go. Can't resist like someone has to pay those 80,000+ 
employees at AT+T.

> >But you miss my point, if a phoneco is not getting a penny for its long 
> distanceservices (which subsidise the flat rate local calls) then the choice 
> would
> >be to close down. Which would be a severe attack to the local internet usage.
> 
> That's an entirely unsupported claim.  Nobody claims that telephone usage 
> (term used generically) is on the way out.  "Closing down" is only going to 
> happen if local phonecos cease to be able to provide a service that people 
> are willing to pay for.

Exactly! Once "X-Phone" has its servers in US Cities, and its charging 10 cents 
a minute for long distance calls, I don't see if the phonecos would be able to provide any service that people are willing to pay for, I mean they won't
be able to provide matching lucrative rates. 

You mean to say that, X-Phone will take advantage of the phoneco and mint 
money for a minimal investment, whereas the phoneco who spent billions on the
infrastructure will be just whistle down the road, and let the X-Phone 
indulge in its own cyberdo.
 
Its like you write a book and the cover designer sells it in his name.

Best,

- Vipul