Xref: utzoo comp.misc:3934 alt.bbs:158
Path: utzoo!hoptoad!pacbell!ames!mailrus!rutgers!att!ihlpb!res
From: res@ihlpb.ATT.COM (Rich Strebendt)
Newsgroups: comp.misc,alt.bbs
Subject: Re: Houston bbs's vs SW Bell - more
Summary: Cost not just customer premise cost
Message-ID: <8992@ihlpb.ATT.COM>
Date: 27 Oct 88 22:32:10 GMT
References: <4252@moray.UUCP> <1933@uokmax.UUCP> <3940@homxc.UUCP> <3945@homxc.UUCP>
Distribution: usa
Organization: AT&T Bell Laboratories - Naperville, Illinois
Lines: 63

In article <3945@homxc.UUCP>, marty@homxc.UUCP (M.B.BRILLIANT) writes:
> In article <3940@homxc.UUCP>, halle@homxc.UUCP (J.HALLE) writes:
> > < -> ....
> > > ->     Recently, Southwestern Bell began raising the telephone rates 
> > < ->of computer bulletin board systems (BBSs)....
> > ...
> > ..... those lines cost more to provide than
> > residential lines.  The cost of providing a line is significantly affected by
> > the amount of use the line gets, both incoming and outgoing...
> 
> I disagree.  The usage cost of a BBS line is borne by the callers, and
> the operator should not be charged for it.
> 
> The cost of the line itself is the cost of materials, installation, and
> repairs.  That cost is not affected by usage.  All the cost of usage
> has traditionally been paid by the caller.

Not quite.  The customer premise cost (wire, installation, etc.) is
really not that great (on an annualized basis) compared to the cost in
the switching offices.  What you say may be true for the per-line
equipment, but is NOT true for the shared (common) equipment (such as
ringing generators).  The degree to which these expensive resources can
be shared is greatly determined by how heavily they are used -- hence
more of these resources are needed per 100 customers if they are
heavily used than if they are lightly used.

> On local calls, the local
> telephone company incurs all the costs and receives all the revenue. 

Again, not quite.  The long distance carriers incur the cost of
providing access to their networks whether or not they are used.

> In part, commercial users are charged more because they are presumed to
> make more local calls within the local no-charge calling area.

Another large component in the ratemaking exercise is the value of the
service to the customer.  Obviously, a telephone is worth much more to
a business than to a residential customer, so the business will be
willing to pay more for the service.  The economists have a fancy
phrase that describes this view.

> BBS's probably receive a lot of local no-charge calls, but they should
> not pay commercial rates for that.  The new wave of usage-sensitive
> pricing will ultimately make the callers pay even for those local
> calls, so if the BBS is charged for them the local company will be paid
> twice.  And BBS's don't make a lot of local calls.

The same sort of thing might be said of radio stations, particularly
talk-show stations.  Anyone know what such stations pay for the special
switching offices they use?

> Other than that, commercial lines might be charged more than
> residential lines based on presumed ability to pay.  That might be
> arguable but should not be argued in this newsgroup.  At any rate, no
> such presumption applies to a BBS run for fun.

Actually, what I am seeing in this discussion is a special interest
group that has been getting a bargain in telephone rates screaming when
they were asked to pay part of the REAL cost of their special grade of
service.

				Rich Strebendt
				ihlpb!res