IP: Re: : Bells Allege Internet Growth Clogging Network From:

[Dave Farber <farber@central.cis.upenn.edu>]

Date: Fri, 23 Aug 1996 05:24:32 -0400


To: Dave Farber <<farber@central.cis.upenn.edu>,


        interesting-people@eff.org (interesting-people mailing list)


From: Gordon Jacobson <<gaj@portman.com>






At 02:15 AM 8/23/96 -0400, Dave Farber wrote:


>From: jodins@uswest.com


>Date: Thu, 22 Aug 96 14:50:59 MDT


>Subject: Bells Allege Internet Growth Clogging Network




>BELL STUDIES SAY FLOOD OF INTERNET USE IS HARMING ACCESS TO PHONE


NETWORK


>       Copyright 1996 Warren Publishing, Inc.   8-21-96




>       Studies sponsored by several RHCs suggest that rapid growth of


>Internet calls for usage-sensitive pricing for Internet service


>providers (ISPs).  And U S West (USW) urged FCC to consider burden


>imposed by Internet on phone network when reforming access charges to


>forestall what telcos claim would be disaster.




>       Four Bell companies -- Bell Atlantic (BA), Nynex, Pacific


>Telesis (PT) and USW -- said in studies that rapid Internet growth is


>forcing LECs to pay for costly network improvements while not


>providing means to recover those costs from ISPs, which pay flat fee


>for lines and don't pay access charges.  America's Carriers


>Telecommunication Assn. (ACTA) submitted BA's study last week in


>petition asking FCC to regulate Internet telephony (CD Aug 19 p2).






        I have been saying for years now that given the bandwidth


onslaught,


the Telecos and Carriers are faced with obsolescence over the next two


decades.  Their "cash cow" -- intelligently switched services -- has a


finite life and the end is in sight (Telcos and Carriers must think in


longer time frames than you or I, as the very existence of their 


"Widow,


Orphan and Pensioner" bondholders and stockholders determines to a 


great


extent how their long term decisions are made).  Now that they are


finally


beginning to recognize the reality of their position, there is this mad


scramble to find a replacement/put off the inevitable.




        Bellcore recently completed a comprehensive study on the topic


of


the effect of ISP traffic on average call length and the financial


ramifications 


to the Telcos of the increase.  Last month, in a preliminary review of


the


as yet unreleased study, one commentator in the alt.dcom.telecom


newsgroup


reported that Bellcore estimates the cost per region of increasing the


number of ports on CO switches to compensate for the average call 


length


increase is in the $30 million range.




        I find this minuscule number hard to believe and have ordered a


copy


of the report for further "first hand" analysis.  If true, however, the


brouhaha that the above 4 RBOCs are fostering is no more than a tempest


in a


teapot.  The report is due to be released in September.




        Given that all business service is usage based, ISP's unmetered


traffic essentially originates in the calling patterns of residential


users


who either have "no charge" local calling or "flat rate" local calls (ie


no


per minute charges).  In the case of NYNEX in NY for example, a


residential


local call costs about 10 cents (day rate).




        While the Telcos make a point in that the average call length


has


increased, not much sympathy should be wasted on them.  The increase in


the


"average call time" brought with it a vast increase in the number of


residential subscribers putting in 2nd lines and a corresponding increase


in


the revenue stream from "flat rate" usage charges.  (Just for


informational


purposes, my average monthly residential bill jumped from $36 per month


to


$86 per month, not including any increase attributable to the added


number


of lines.)




        Moreover, is it just my imagination, or aren't AT&T, MCI, 


Sprint


(just this week), PacBell, BA/NYNEX, Ameritech and many other Telcos 


and


Carriers all in the business of providing dial-up Internet access


themselves?




        Where's the beef?  More news at 11!




Regards, - GAJ




Home Page: http://www.seas.upenn.edu/~gaj1/home.html