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Re: Internet Economics
At 09:15 PM 8/5/96 -0400, Duncan Frissell wrote:
>At 02:22 PM 8/5/96 -0800, jim bell wrote:
>>The current question is how to motivate individuals and companies to invest
>>in improvements to the Internet that will benefit everyone. However, I don't
>>think that will be the limiting factor that it may currently appear to be.
>>Due to the nature of the Internet, there is nothing to prevent a company
>>(such as AOL, Compuserve, or other) from building a shadow version of the
>>Internet, through which all of its customer's traffic will pass until it
>>emerges local to its destination.
>
>Note that this is the business model for @HOME which will be handling the
>heavy lifting for various Internet Over Cable systems around the country.
They'll need it. However, we can assume that POLDCs (Plain Old
Long-Distance Companies) will fight back. The easiest thing for them to do
would be to offer a single-payment-per-year, unlimited-use LD telephone
service for maybe $10 per month or so. If, as various people have
suggested, half the cost for LD is billing and customer service, they'll cut
their costs by a factor of two and still make money. This would take the
wind out of the sails of domestic LD; it is unclear whether foreign LD would
follow suit.
Jim Bell
[email protected]