IP: Re: Here we go re internet telephones

[Dave Farber <farber () central cis upenn edu>]

From: rjs () rpcp mit edu (Richard Jay Solomon)




> From: Hal Varian <hal () alfred sims berkeley edu>
> To: Dave Farber <farber () central cis upenn edu>


> Internet providers and long-distance carriers.  My guess is that
> this kind of thing will hasten the moves to impost local access charges
> on Internet providers.  (See


Hal:


my guess is that this will hasten the day when <64kbps channels are sold at
flat rates. The real cost (not price) of telephone calls worldwide is so
incredibly low that the Internet isn't really any cheaper, just priced
differently. After all, the Internet is merely a hostile overlay on the
telephone system.


Do you think that General Motors pays 5 cents/minute for telephone calls?
Some economists would be shocked to find out what the big guys actually
negotiate for carriage, and AT&T still makes a huge profit on that.


Richard