Xref: utzoo comp.misc:3946 alt.bbs:169
Path: utzoo!hoptoad!amdcad!ames!think!bloom-beacon!spdcc!rayssd!fabscal!dorn
From: dorn@fabscal.UUCP (Alan Dorn Hetzel)
Newsgroups: comp.misc,alt.bbs
Subject: Re: Houston bbs's vs SW Bell - more
Summary: Reasons for residential/commercial rate differences
Keywords: bell rates residential commercial phone
Message-ID: <603@fabscal.UUCP>
Date: 28 Oct 88 14:31:20 GMT
References: <4252@moray.UUCP> <1933@uokmax.UUCP> <3940@homxc.UUCP>
Reply-To: dorn@fabscal.UUCP (Alan Dorn Hetzel, Jr.)
Distribution: usa
Organization: Fabscal Systems
Lines: 39

In reference to the rebuttal from the goon at AT&T, which states that he
hope SWBell winds up winning, because they are really justified in charging
that much more for "business" lines due to increased costs associated with
increased usage:

     1) charges for types of lines, such as residential and/or commercial
        are not determined on a cost recovery basis.  (At least not here
        in Georgia, and not in several other states I know of)  These
        charges are determined by the local PSC (Public Service Commission)
        and they are very political in nature, having little to do with 
        real costs.

     2) Where AT&T is concerned, their cost to carry traffic *is* usage
        sensitive, because when a long distance circuit isn't being used
        by one customer, it can be used by another.  This is *not* the
        case for the local operating companies, whose *major* cost is
        maintaining their physical plant (The miles and miles of copper
        they have put in the ground and strung on poles).  Every customer
        phone, whether business or residential, uses a dedicated pair of
        copper wires all the way back to the switch.

     3) Now, yes, there are some additional costs related to switch bandwidth
        which *are* traffic related, but they are truly insignificant when
        judged in comparison to the fixed costs of maintaining and improving
        the base wiring.

     4) Here in Georgia, the PSC *highly* subsidizes residential (especially
        rural residential) rates by inflating business rates substantially.
        A while back (several years) some enterprising soul from the business
        community suggested cost based billing.  This would have based cost
        of service to the customer on the cost of providing service.   The
        thing which killed this idea was that the typical rural residential
        customer who was forty miles from his exchange would have had a
        *huge* monthly bill, and the city customer would pay almost nothing.
        You can guess this didn't fly with the PSC.

     More later,

-d.