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From: daemon@DECWRL.DEC.COM (The devil himself)
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Subject: Submission for comp-dcom-telecom
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Date: Thu, 30-Apr-87 18:53:37 EDT
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Posted: Thu Apr 30 18:53:37 1987
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Path: decwrl!delni.dec.com!goldstein
From: goldstein@delni.dec.com (Fred R. Goldstein dtn226-7388)
Newsgroups: comp.dcom.telecom
Subject: Intra-LATA toll gougine; Area Codes
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Date: 30 Apr 87 22:53:31 GMT
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Re: last issue's flame about how high intra-LATA rates are in Virginia
vs. AT&T;
That's entirely a state matter and has nothing to do with competition,
period.  Intra-LATA INTRASTATE calls are priced per rates set by
the state govt.  These rates vary hugely state to state; NJ's, for
example, are maybe half most other states'.  This isn't the phone
company gouging because of their monopoly, it's the state regulator's
way of subsidizing cheap local residential service.  Toll calls are
viewed as a luxury, local lines as a necessity, so the former pay for
the latter.

The FCC has taken steps to reduce this subsidy within their domain,
INTERSTATE calls, by using "access charges" (really a local service
charge) to make up for money formerly paid via toll cross-subsidization.
Some states have also moved closer to cost-based pricing.  New England
Telephone lowered its toll rates too, to face perceived (not very real)
threats of competition, but the Mass. DPU happens to believe in
cost-based (honest) rates.  Most states don't; keeping "basic" rates
low is (perceived as) better politics.

If you had competition, the competitors would still be obligated to
pay outrageous charges to the local company to contribute their share
of the subsidy.  That still occurs with the MCIs of the world.  A lot
of what they collect goes right back to pay for local service.

Re: Area code 413.  Someone pointed out, I think in this digest last
year, that 413 (a handful of phones in the unpopulated boondocks of
Western Mass.) was one of the first area codes cut into service, during
the trial phase of DDD.  Thus it got a "good" code and a small geographic
area, since they helped the test.  History bites back...
      fred (whose office will soon be in NPA 508, but home is still 617)