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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony -- Ignore unavailable to you. Want to Upgrade?

To: Bradley W. Price who wrote (400)	4/7/1998 7:08:00 PM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 3178

Bradley, Re FCC Taxes... I find the FCC's timing on this matter somewhat humorous. It was only about six months ago that the FCC used Internet Telephony as a menacing sword over the heads of the European PTTs. At the time the FCC told them, collectively, that if they (the PTTs) didn't fall into line, but quick, with regard to lowering their international settlement rates, then those PTTs would have to, instead, contend with Internet related voice offerings, and lose out on the business, anyway. Frank Coluccio

To: Bradley W. Price who wrote (400)	4/7/1998 7:25:00 PM
From: Frank A. Coluccio	Read Replies (2) \| Respond to of 3178

BellSouth Calls For Backbone Presence -- Telecommunications Act prevents RBOC from owning a piece of the Internet framework April 7, 1998 The southern United States is home to the country's fastest growing population, and the Internet arm of the local regional bell operating company is hoping to wire up the lion's share of that population. BellSouth Corp. is still regulated by the Telecommunications Act of 1996, and because of those restrictions, the carrier's Internet arm is unable to own an Internet backbone. The Telecommunications Act is increasingly in dispute, and if restrictions are lifted this year, all remaining RBOCs could become Internet backbone powerhouses. With 200,000 subscribers already, BellSouth.net Inc. and its President Ray Smets want to position the business as a dominant player and is developing Internet, intranet and Web hosting services across the company's nine-state territory. CRN:What can BellSouth.net do and not do as part of a regulated company? Ray Smets:When BellSouth Corp. chose to enter the [Internet service provider] business, it had choices as to how to approach that business, and it had a number of restrictions as far as how it built that business. Our prohibition in providing long distance service affects the way we designed our business around this regulation. Other than that, our ISP plan looks similar to the ISP plan of other companies breaking into the Internet business. CRN:So how is the customer experience different when working with BellSouth.net compared with an unregulated Internet service provider? Smets:We cannot be an Internet backbone, but this is obviously a direction we want our corporation to go in. If you are a long distance customer that chooses to do business with us, you would have your choice of which backbone carrier to use over the Internet. This can be either an advantage or a disadvantage. We have an obligation to bring customers a minimum of one, possibly more, Internet backbone carriers, depending on how customers wish to architect their networks. We use GridNet, IBM [Corp.] and Uunet Technologies Inc. This involves some additional sales time. CRN:Has BellSouth.net avoided IP telephony because it cannot offer long distance service, or is it because the corporation is fearful that this technology will eat away at traditional service? Smets:The technology probably isn't ready. We have to get comfortable with what the price points of that arrangement would be, and we would have to bundle it in with our service. Internet telephony is an IP service, not a voice service. By way of that classification, you could probably provide voice-over IP without restrictions, so it's a technical [not regulatory] issue. We know it's important, and we will get there. When we have an opportunity to compete in the long distance arena, we are going to grow market share. [Voice-over IP] gives us an opportunity to grow market share that is different and probably should not be bundled with long distance services from BellSouth. CRN:What is BellSouth.net. doing to shore up relationships with VARs? Smets:We have some additional programs coming out. We realize that our internal channels don't get at the entire marketplace. We have dabbled in the VAR arena, and we have seen results from those relationships. Based on those results, we are planning a more aggressive campaign that will take this further. CRN:Do you think a merged WorldCom-MCI is monopolistic? Smets:I think it is appropriate to study its effect on the marketplace because it is such a large merger, but I'll leave it to the regulators to determine if it's a monopoly.