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To: Rupert who wrote (1680)9/4/1999 3:23:00 AM
From: elmatador  Read Replies (1) of 15615
 
The actual situation of the new generation long distance carriers is actually very simple. The price of a long distance used to reflect the cost of carrying it using line of sight microwave analog trunk routes and coaxial cable links. Newer digital technologies, SONET and fiber, cut the cost of carrying a call dramatically. Traditional carrier ATT didnt pass to their customers the fall in prices. They kept cashing in. (Compare that with the computer industry) tha passes the savings to customers via better and faster machines at lower costs)
Since these new tecnologies provided lower barrier of entry, new generation IXC (public utilities that owned right of way provided the highways for fiber laying) implement their own networks and started arbitraging. As the prices of long distance calls approach the cost of carrying it, the new generation carriers business model is looking shaky.

I expect the new gen IXC not play dead but allying themselves with the CLECs. The CLECs can leverage their caged equipment at the CO plus their new ADSL technologies to route data traffic to the new gen IXC now no longer arbitragers and ding the real thing.

What the new gen IXC need is the traffic generated by the COVADs, Northpoints and Rhythmsnet of this world. Keep an eye on the Last Mile...
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