Hi Bill, just reading the Barron's and the following caught my eye. Note the $70/month cost the RBOC's cite. If that's true, the RBOCs have an incentive to provide new types of services with or without the threat from the cable companies. The entire article is well worth reading, but here is one part. Techie
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No Reward for Hanging Up
No one foresaw the growth of the Internet. The local phone companies say they are getting killed. The regional Bells complain that Web surfers on average tie up local lines for 18 minutes or more, and that some surfers keep their computers hooked up to the 'Net around the clock. There's no financial disincentive for staying connected.
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The Bells argue that the phone system was designed for a family of three making three calls a day for an average duration of three to five minutes. When one caller can tie up a line for hours on end, maintenance costs soar, new lines must be provided to serve other customers, and new switches must be installed to bypass bottlenecks. Bell Atlantic says each $16 line it leases to an Internet provider costs it $70 a month to maintain. The company states it had to spend about $18 million extra to upgrade nine central offices in 1995 to keep up with Web surfers.
DATA Coalition members accuse the local companies of not telling the entire story. First off, it disputes the Bell companies' claim that local phone lines are facing an impending overload. Paul Misener, an Intel lobbyist who heads DATA's steering committee, notes that Pacific Bell, at the very same time it was complaining about the Web surfers of Silicon Valley, last month was offering five hours' free Internet service to customers who bought a second phone line. In fact, Misener and his members argue, the regional Bells are selling a record number of second lines to homes because of Internet growth.
The Bells counter that they can't tell if booming second-line sales reflect Internet usage; consumers might be purchasing them for teenagers or fax machines, for all they know.
``They should put in new technology to meet the increased demand and
seek a return by offering new services,'' says Misener. Trying to protect old telephone equipment by hiking fees is a monopolist's solution to the problem of growth, he adds. The regional Bells sought a lifting of the same exemption in 1988; it met stiff opposition in Congress and from the public, which called the proposal a ``modem tax.''
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