From: jim bell <jimbell@pacifier.com>
Date: Wed, 7 Aug 1996 05:18:26 +0800
To: Duncan Frissell <frissell@panix.com>
Subject: Re: Internet Economics
Message-ID: <199608060643.XAA00161@mail.pacifier.com>
MIME-Version: 1.0
Content-Type: text/plain


At 09:15 PM 8/5/96 -0400, Duncan Frissell wrote:
>At 02:22 PM 8/5/96 -0800, jim bell wrote:
>>The current question is how to motivate individuals and companies to invest 
>>in improvements to the Internet that will benefit everyone. However, I don't 
>>think that will be the limiting factor that it may currently appear to be.  
>>Due to the nature of the Internet, there is nothing to prevent a company 
>>(such as AOL, Compuserve, or other) from building a shadow version of the 
>>Internet, through which all of its customer's traffic will pass until it 
>>emerges local to its destination.  
>
>Note that this is the business model for @HOME which will be handling the
>heavy lifting for various Internet Over Cable systems around the country.

They'll need it.  However, we can assume that POLDCs (Plain Old 
Long-Distance Companies) will fight back.  The easiest thing for them to do 
would be to offer a single-payment-per-year, unlimited-use LD telephone 
service for maybe $10 per month or so.  If, as various people have 
suggested, half the cost for LD is billing and customer service, they'll cut 
their costs by a factor of two and still make money.  This would take the 
wind out of the sails of domestic LD; it is unclear whether foreign LD would 
follow suit.


Jim Bell
jimbell@pacifier.com