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echo: cellular
to: LORIN POTTER
from: ZIGGY MALTER
date: 1997-06-07 08:55:00
subject: CALLING PARTY PAYS

Hi Lorin,
LP>Ziggy, you are close, but think about this.  No one installs equipment to
LP>handle 100% of traffic during the most extreme busy times.  Not cellular,
LP>not the phone company, not street and highways.
LP>
LP>Since most traffic is during the day, you use more expensive equipment
LP>to handle the traffic during extreme busy times, so you have to charge
LP>more.
Your logic is good, however from what I have been told by all the 
providers, these days the equipment and resources cost exactly the same 
24 hours per day.
A good example arose yesterday in one of our local newspapers which had 
front page headlines saying that the Australian consumer was being 
ripped-off by excessive international phone rates. It was calculated 
that because of modern technology, the actual cost of providing 
international calls was one-fifth of what was actually being charged. In 
other words, the companies were making 500% profit on international 
phone calls. 
I believe that my argument about modern technology making it cheap 24 
hours per day is easily seen with research such as the above.
LP>I'd like to be the one charging for cellular, but am not.  Since the plan
LP>that we have makes no difference between time of day, I guess that I don't 
LP>.  I do however, understand what it is to have to equip for 
LP>the heavy useage time, just to see equipment wasted for the other 23 hours
It's the same argument as the differing costs of long distance as 
opposed to local calls. My cellular provider has a flat rate across the 
whole nation. In other words, I can call from Sydney to Perth which is 
about the same distance as Los Angeles is from New York City, for the 
same rate as if I rang my next-door neighbour. I can ring to anywhere on 
the continent of Australia which is bloody big, for the cost of a local 
call. We don't even have roaming, as I can make a call to anywhere from 
anywhere for that one local call rate if I access a cell anywhere in the 
country. However my provider is making squillions of dollars, even with 
this setup.
In the old days, sure, it cost more to ring long-distance and we all 
paid, but these days there is absolutely NO excuse for such charges. The 
only reason in 1997 that phone companies have long-distance rates is 
that nobody has kicked up a stink about it.
It was recently found in Australia that the phone companies could make a 
huge profit by having a free phone call rate to anywhere in the country 
and just charging rental per month. The costs saved by eliminating 
itemised billing and metering equipment would more than offset any loss 
of profits from long-distance rates.
These are not my imaginings, but the results of high-level surveys made 
on phone companies in recent times.
Cheers - Ziggy
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