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From: lars@ACC.ARPA
Newsgroups: mod.telecom
Subject: Re: Touch-Tone Charges
Message-ID: <8601160435.AA28040@ucbvax.berkeley.edu>
Date: Wed, 15-Jan-86 15:22:00 EST
Article-I.D.: ucbvax.8601160435.AA28040
Posted: Wed Jan 15 15:22:00 1986
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From:	SAGE::MAILER       15-JAN-1986 07:09
To:	LARS
Subj:	[Netmail From: hammond%lafite@mouton.ARPA (Rich A. Hammond at lafite.UUCP)] Re: Touch Tone Access Charges

Date: Wed, 15 Jan 86 10:02:01 est
From: hammond%lafite@mouton.ARPA (Rich A. Hammond at lafite.UUCP)
Message-Id: <8601151502.AA29329@lafite.UUCP>
To: lars@acc-sb-unix.arpa, lars@acc.arpa
Subject: Re: Touch Tone Access Charges

1) You posted from acc-sb-unix.arpa, but said your return address was
acc.arpa.  Since our hosts lists those as 2 different places, I sent
it to both.

As I understand the system:

1) Charges for Touch-tone service are set by the local operating companies
with the consent of the PUC (or it's equivalent).  The extra charge
for Touch tone service is essentially a tax on the "rich" (since  it is
a "premium" service) transferred to the "poor" (who use pulse dialing).
This is influenced by "politics" since the local companies are still
a monopoly and some redistribution of costs vs prices is done.
Thus, there is typically (another example) a "lifeline" service
grade that allows people to have a phone, at a less expensive rate.
The cost is picked up by all other subscribers.

2) The cost to the phone companies of new equipment is typically
depreciated over a long (i.e. 20 years) period of time, so we are in
fact paying for equipment that was installed quite some time ago.
Paying the costs over the long term is like buying a house with a
mortgage, the total cost is more, but the monthly outlays are small.

3) The actual cost of providing the service isn't the problem, the
problem is revenue.  The telephone companies want to continue to
make as much money as before, so if they charge less for Touch-tone,
then the pulse service (or some other service) has to go up in price.
You can guess at the reaction of the Public Utilities Commision
to such a proposal, since they view Touch tone as a "premium" service.

4) Arguments that the phone companies should simply take in less money
I won't buy, since I didn't hear those complaining about the cost
volunteering to work for less this year than last, which is what they
are asking the phone companies to do.

Rich Hammond	hammond@bellcore-cs-gw.arpa
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