TELECOM Digest OnLine - Sorted: Re: The Coming Tug of War Over the Internet -- Wash Post

Re: The Coming Tug of War Over the Internet -- Wash Post

Wesrock@aol.com
Wed, 25 Jan 2006 20:01:36 EST

In a message dated Tue, 24 Jan 2006 06:05:47 -0500, William Warren
<william_warren_nonoise@speakeasy.net> writes:

> The old line telecom providers have always relied on a tiered-service
> pricing model: relatively cheap basic services, such as local POTS
> "lifeline" service, subsidized by higher-priced and higher-profit
> premium offerings.

State commissions required this pricing. And they still do. Their
premise is that POTS should be as low as possible since by far the
largest part of the population in their state is made up of residence
users and also because of the desire to promote "universal service."

Even where telcos wanted to change the pricing model, such as by
reducing or eliminating the pricing disparity between interstate and
intrastate calls (intrastate calls being priced high, usually a good
deal higher) commissions consistently refused to go along, since this
would require raising POTS prices.

> Although the amounts of the subsidies vary, the basic
> premise has always been that business users pay more because they get
> more utility from phones and because the network is designed to meet
> business service levels, and that premium residential offerings, such as
> call waiting, are also priced at high-profit margins.

Business users are far outnumbered by residence users, and whether
state commissioners are elected or appointed, they still ultimately
have to represent and respond to popular sentiment.

Besides that, the premise that business users get more utility from
telephone service is generally true.

Wes Leatherock
wesrock@aol.com
wleathus@yahoo.com

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