8 thoughts on “Why defend the bell system?”

  1. What about the requirement of connecting with the FBI’s Carnivore? Won’t that add startup costs and eliminate some of the smaller players?

  2. Pricing pressure is already happening. Vonage just introduced a lower-priced tier. Now for just $14.99 a month people from the US can call me in Europe without paying international fees (it’s even free if they’re in NYC or use Vonage too), and I get 500 minutes a month to North America as well. I guess they might even introduce a basic plan where you get a phone number without any bundled calls for less than $10 a month.

    The savings work both ways, so the total loss of revenue for big international callers, as well as for the people who call them, can go into the hundreds or thousands of dollars per month.

  3. Call me naive but I am trying to understand the pricing model and who is going to make money. If i need to Use Vonage, First I need broad band connection at home, so, TW costs around $45( Road Runner ) and SBC DSL costs around $50 ( DSL + Local ). Then I have to Pay $40 for Vonage.. Thats eventually $100 for BroandBand and Vonage. From my view most of the long distance callers spend around $40 on an average( Including International ). So, instead of going to VOIP and Broadband, they can have $30 Local + Long distance Service and Pay $40 on Long distance call for a month. A typical consumer saves $30. So where is the savings for a normal consumer.

    So as a normal Consumer I dont save anything instead if I become early adopter then I stand to loose $$$$.

    More over the countries people are calling they need to have a really good telecom infrastructure with high bandwith availability for affordable prices. IMHO it might take another 3-4 years before VOIP goes mainstream.

  4. Shiv if you add your own numbers and throw broadband in the mix, the price slides drastically. i think you are missing the big picture here – there is a price war breaking out and it threatens everyone. now when was the last time you paid more for more voice minutes on a wireless plan. the offer you have can be easily replaced by a cellphone plan that costs $40 a month. if you get broadband, then you can get voice as a tack-on from one of the VoIp providers – the pricing model is now broken

  5. I agree with many of your points OM. BUT

    These logic trains about Vonage beating the bells would run if the telco lobbyists didn’t have the majority of politicians already eating out of their pocket.

    So Salon or whomever else can throw around numbers all day; but the bells own this country and have for decades. Look at anti-muni bills. Look at the eight dollars they charge for a service like call waiting that costs a penny to provide. Look at how they’ve gotten away with phantom equipment reports.

    It simply isn’t a matter of “the best horse winning” and using an abacus to calculate the outcome, because the game is rigged. They can defy trends. They can buck logic with lobbying cash.

    With the other VoIP shoe yet to drop at the FCC, If I were a betting man my chips would always be with Mr. Seidenberg and company.

  6. Pingback: Om Malik on VoIP
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