From: Vipul Ved Prakash <vipul@pobox.com>
Date: Sat, 17 Aug 1996 07:03:08 +0800
To: jya@pipeline.com (John Young)
Subject: Re: FCC_ups
In-Reply-To: <199608112108.VAA23815@pipe1.ny3.usa.pipeline.com>
Message-ID: <199608170231.CAA00337@fountainhead.net>
MIME-Version: 1.0
Content-Type: text


> 
>    8-10-96. WaPo: 
>  
>    "Phone Service Via the Internet May Slash Rates." 
>  
>       Labs of Advanced Technology has developed a way for 
>       people to make long-distance calls over the Internet 
>       using only their telephones, at about half the price of 
>       ordinary toll calls. Customers would merely call a 
>       central number, then dial their long-distance numbers. 
>       The call is carried on the Internet, then put back onto 
>       the local phone system at its destination. The company 
>       plans to charge 5 to 8 cents per minute for all domestic 
>       U.S. calls, which represents a 50 to 75 percent discount 
>       off most domestic long-distance rates. International 
>       rates would depend on arrangements made with foreign 
>       phone companies. "Twenty years from now, and probably 
>       sooner, I don't see the giants of the telecommunications 
>       industry existing anymore," said the company's 
>       president. The giants hoot, "FCC, PACs, whack him." 
>  

This kind of report is often confusing and more often misleading.
Most of the internet still runs on "the infrastructure provided by 
the giants of the telecommunications industry, who according to the report 
would cease to exist after some time". 

Bigbells and Babybells provide cheap [flat rate local calls] and 
expensive long-distance calls. They make most of their money on the
later. This money goes into development and maintainance of their
infrastructure. Once they loose these profits 1. They won't be able
to provide cheap local-calls and/or 2. They would go bankrupt and shut the
entire network which is used by many to connect to the internet.

This is complex problem and the only solution I see to it is a
different pricing policy. [Prolly a differential pricing system might fit
the scenario but I don't have much idea about that] 

First flat rates would have to go out.
If Alice uses her phone for 5 hrs in month and pay _x_ dollars and Bob uses
his for 100 hrs and pays _x_ dollars, then Alice is subsidising Bob, which
is not really ethical. Everyone should pay for the amount of bandwith 
one is using.  

Another criteria for pricing can be content. Which would also imply that
a guy sitting in Delhi, India (like me) pays more for reaching a Server based 
in US, as compared to a local server. 

--- Vipul