Not particularly original telecomm musings:

While the GTE purchase of BBN may have attracted the most notice, two other (predicted) events of this week are furthering motion toward the death of small, cheap Interenet Service Providers.

Yesterday, the FCC approved a reduction in long distance access charges, the fees charged by RBOC's to LD comapanies for switching messages onto the local loop. This was very, very profitable for the RBOC's. While the RBOC's will also be permitted to offer LD service, they are unlikely to be able to keep access charges so high that they can steal a lot of LD business just because they aren't paying themselves for access. (MCI has already protested that the new fees are at least 50% too high.) Therefore, this is expected to result in the raising of local telephone charges, including (I believe) the ultimate removal of all unmeasured service. Also affecting the way you may be using your telephone for ISP, the RBOC's will be permitted to charge more for a second phone in a single residence.

The second development is that the major Internet backbone providers, UUNET, Sprint, MCI and BBN have announced that they will stop peering with substantially smaller ISP's. That is, they will charge access fees to mid- and small-size ISP's. (The economics of this is basically the opposite situation from the telco one, because so much ISP traffic winds up on the backbone, unlike the residential telephone service which mostly stays on the providers own network). This will cause the smaller ISP's to raise their rates, but leave the large ones, at least those integrated with telcos or cable companies ---which, with GTE's purchase of BBN, is now all of them--- able to offer cheaper ISP. My feeling is that $10/month unlimited ISP will be gone in a year, and unmeasured metropolitan and local service gone in two years.

What happens next in Europe is interesting. My guess is that the names Erricson and British Telecomm will figure in it. And whether its one or both may depend on whether Blair gets the UK into the single currency scheme quickly.

08may97