Jim bell writes:

What do you mean, "doesn't really fit the facts"?!? What part of it was incorrect? Fiber-optic _is_ commonly used in inter-office trunks, right? It doesn't wear out, right? Higher usage doesn't entail greater costs, right? The capacity, while not strictly infinite, is high enough so expanded usage doesn't strain most links, right? Finally, modern phone switches have sufficient connect capacity so that they can handle usage which would have been considered "unusual" by yesteryear's standards. All of this points to an obvious conclusion: Telephone companies do not, in general, have increased costs as a consequence of increased telephone usage.

Fiber does not wear out per se, but it does need replacing, partly from the inevitable contractor accidents (landscapers) and occasional entropic events. Mux cards and repeaters do go bad on a regular basis, there is a correlation between usage and increased maintenance, and of course increased usage means increased electricity usage. One point that seems to be missed here is the very high cost of compliance with government regulations. If the internet phone people have to comply with the same regulations it will drive up their costs dramatically, and if the regulations are lifted for all, the RBOC's think they can out compete them. Thank you for your interesting post. Brian "Zazen? Well it beats sitting around on your ass all day doing nothing."