Newsgroups: uk.telecom
From: mandarin@cix.compulink.co.uk (Richard Cox)
Subject: Will we ever get free local phone calls?
Cc: mandarin@cix.compulink.co.uk
Reply-To: mandarin@cix.compulink.co.uk
Date: Mon, 28 Dec 1992 11:51:00 +0000

J.P.Knight@lut.ac.uk (Jon P. Knight) asks:

>>  I seem to remember reading somewhere that AT&T were involved in one of
>>  those new telephone operations (the ones the Post Office, the CEGB, BR
>>  and Uncle Tom Cobbly and all seemed to be getting in on).  So what became
>>  of the free local phone calls?  Will it ever happen?

Some of the local cable-tv franchises that offer telephone service, do offer
"free" local phone calls (for which read "all local phone calls bundled into
the monthly charge") but only within their area AND between their customers.
If the call has to go into another system, the operators of that system will
inevitably charge the originating system on a per-call basis and no operator
could offer for free anything that has to be paid for per unit.

Kingston Communications (Hull) have been offering their customers unmeasured
service for some time ..... but, again, this does NOT include calls into the
nearby areas that are on the BT system.

>>  I know it is done in America but is it just a historical thing or does it
>>  actually pay its way

The situation in the USA is largely historical; whereever the US telcos have
an opportunity to withdraw unmeasured service, they do so.  It does not make
as much profit as measured service !

> in the future there would be one flat rate for telephone calls *everywhere*
> (local, national, international; the works).  Does anyone here think that
> this will happen?

I think that was a quote from the book Odyssey 3 - oddly enough I put exactly
that quote to Michael Hepher (MD of BT) on 1st December this year, pointing
out to him that the call cost differential by distance was far less than the
tariff differential by distance as charged by (say) BT.  He indicated that as
long as the market would bear the cost differential, BT would remain happy to
charge it !

You have, in effect, asked for two potentially conflicting arrangements.   On
the one hand distance independant tariffs are justifiable as the cost of call
transmission falls; on the other hand the marginal cost of local calls is now
negligible within the area served by a single exchange.   Remember, too, that
a single modern digital exchange can serve an area of *several hundred square
miles* (outside London) and that however they are tariffed,  such an exchange
treats all calls between its own lines as "local".   Calls between neighbours
can now have to travel an eighty mile (or more) round trip to be "delivered".

The cost of calls in the future will be determined by new factors: the charge
for "value-added services" (personal numbers, mobility, special billing, etc)
and the "cost of interconnection" - i.e. charges that are made as a result of
the opportunity presented to one company by the need perceived by a second to
interconnect its services with the first company's services.  POTS (plain old
telephone service) will be as near to free as it is possible to get.

An excellent example of the cost of interconnection is provided by what is
known as the "accounting rates": tariffs that phone companies in different
countries agree to charge each other for incoming calls over international
circuits (charges in addition to the charges for the international circuit
used).  These are usually well in excess of the charge that would be made,
for a national call in the country concerned.  It suits both phone companies
and national governments to push these as high as possible, regardless of the
lack of justification, as they increase revenue (and "exports") in a monopoly
market situation.

Or to put it another way, why could Mercury not do a "Sunday Special" ?
Because they are bound to meet their interconnection payments to BT !

Richard D G Cox

Mandarin Technology, Cardiff Business Park, Llanishen, CARDIFF, Wales CF4 5WF
Voice: +44 222 747111      Fax: +44 222 711111      VoiceMail: +44 399 870101
E-mail: mandarin@cix.compulink.co.uk     Not diallable on 511 in mainland USA
Newsgroups: uk.telecom
From: rob@sound.demon.co.uk (Robert J Barth)