FCC_ups

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." 
 
   "PCs and the Postal Service Challenge the Mailroom Reign of 
   Pitney Bowes" 
 
      New technology has made it possible for IBM, Bell 
      Atlantic and National Semiconductor to start prowling 
      around postage meters, which account for $20 billion a 
      year in postage. With a telephone line to the post 
      office and some fancy computer software, a "stamp" could 
      spin out of the printer at the same time the envelope is 
      being addressed. Computer-generated envelopes will not 
      only have addresses and stamps, but also a bar code that 
      can quickly be read by a computer to hasten delivery. 
      Distinctive stamps called indicia carry a specially 
      encrypted numerical code that Pitney Bowes believes the 
      Postal Service should adopt to prevent counterfeiting. 
 
   ----- 
 
   http://jya.com/fccups.txt  (22 kb) via: www.anonymizer.com 
 
   FCC_ups

On Sun, 11 Aug 1996, John Young wrote:
>       Distinctive stamps called indicia carry a specially 

Man I was excited till I read that line more carefully :-)

---
Cause maybe  (maybe)		      | In my mind I'm going to Carolina
you're gonna be the one that saves me | - back in Chapel Hill May 16th.
And after all			      | Email address remains unchanged
You're my firewall -    	      | ........First in Usenet.........

(no crypto here, so delete it already)  :)

Yeah, right.

The tier one ISPs are refusing to peer with anyone that does not have at
least a T3 backbone cross-country, as they don't want to have to carry
other's bits long haul at no charge.. This is to keep "small ISP" from
opening locations all over the country, and connecting to "the Internet"
(bigger providors with cross-country capacity) without paying for the
long-haul capacity. 

Just because this scheme is economical on a small scale (probably only
looking at the costs of the two "ends", and considering the long haul to 
be "free") doesn't mean that it will work on a large scale. Large ISPs 
pay the same costs for infrastructure as telephone companies - or more.

POTS takes 64 Kb/s for one call, or 24 calls per T1. Analog from the CO to
your house, digital in between COs.  Packetizing the voice transmission to
carry it in IP increases the required bandwidth, unless compression is
used. Compression is getting better, but even state-of-the-art systems at
16 Kb/s sound like a bad connection on a car phone, IMHO. Go lower, and
you sound like Mickey Mouse - or Mickey on a car phone. ;)  I'd rather 
pay the dime lady $.10 per minute for a good connection than pay somebody 
else $.05-.08 for compressed audio.

On top of all that, most sound cards in PCs (today) are only capable of 
half-duplex audio. If you don't know why that matters, go play with your 
walkie-talkie a bit.

"The Internet" isn't "free", and as more delay-sensitive applications 
(voice, video) are added, ISPs will only become MORE aware of the demands 
their client's activities place on their capacity. I'd rather not see 
usage tarrifed on a volume basis, but this sort of approach to doing 
business on the 'net only makes such charges more likely.

Twenty years from now, you'll still have a few players dominating the top 
level - the infrastructure needed to support communications is expensive 
to create, maintain, and manage. The economies of scale in this industry 
will drive others out of the top tier. There will still be plenty of 
niche providors that focus on the vertical markets, and lease their 
bandwidth from the big players - same as today. As for whether the 
players will be the same as today, that depends. If the railroads had 
realized that they were in the transportation business, instead of the 
train business, they'd be flying airplanes today.

Anyone that wants to carry a large volume of traffic via the 'net will
find that either the market will dictate that they pay for the bandwidth
they use, or the FCC will. I don't see the FCC getting involved, unless
the "phone service via internet" providor tries to use the courts to get
out of paying for the bandwidth they use. They'll be restricted by the 
size of the "pipe" they purchase from their ISP, and the ISPs all charge 
more for access from larger "pipes." If they lease their own 
cross-country circuits, they'll pay the same (or higher) costs as the Telcos.

The large telephone companies are moving away from circuit switched 
networks, and towards packet switched networks - have been for years. 
It's called ATM, and it's not in wide use yet. There are advantages to 
building large scale communication systems this way, but "free bandwidth" 
is not one of them.

- Ranting Wombat

On Sun, 11 Aug 1996, John Young wrote:

>    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 

SNIP
>       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." 
SNIP

> 
>    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