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