[IP] more on facts on more on Cell Phone Controversy in Winthrop
Begin forwarded message:
From: John Levine <johnl@xxxxxxxx>
Date: August 15, 2004 1:34:28 PM EDT
To: dave@xxxxxxxxxx
Cc: Subject: Re: [IP] facts on more on Cell Phone Controversy in
Winthrop
Such negotiations are often contentious; there is a long history of
tricky business practices associated with interconnection agreements
involving CLECs, long distance companies, and ILECs.
No kidding. When cellular service was new, they frequently agreed to
interconnection agreements with high per minute termination rates
because that made the ILECs happy to build the facilities and th
wireless carriers could pass the charge on to their customers. (They
used to surcharge me 3 cents/min for calls terminating on other
networks.) Now that wireless rates have dropped and everyone has
bundled minute plans so the incremental revenue per call is zero,
wireless carriers want something closer to costs, which as others have
noticed is basically bill and keep, both sides terminate the other for
free.
But an important thing to remember in this case is that little bitty
rural telcos get the bulk of their revenue not from their subscribers,
but from the universal service fund with per-line subsidies, and to a
lesser extent from deliberately inflated access fees charged to long
distance carriers. The monthly rates the customers pay are perhaps a
third of the revenue. Maybe the coop's management wants to charge
wireless termination as long distance access rather than local EAS.
It's hard to tell.
But in this case, the answer is simple. Since the East Buchanan telco
is a coop, its owner-subscribers should tell the management to quit
screwing around and provide phone service like they're supposed to,
using all of that nice USF money the rest of us are paying them. If
they have to adjust rates to deal with the realities of
interconnection in 2004, so be it.
This is particularly true in view of their remarkable dividend payment
history at http://www.eastbuchanan.com/EB%20Telephone/dividends.htm
which reveals that for every dollar their customers paid, the
customers get about half of it back at the end of each year as a
dividend. Oh, and they're affiliated with Iowa Wireless which offers
unlimited local calling for $35/mo, and their customers get the
dividend on that, too. Sheesh. What do they expect?
Regards,
John Levine, johnl@xxxxxxxxx, Taughannock Networks, Trumansburg NY
http://www.taugh.com
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