Re: BellSouth does it again...

Rich Adamson (adar0@routers.com)
Wed, 20 Nov 96 16:50:30 CST

>The above statement simply cannot be true! The costs of installing a
>residential like must be greater since on the average the copper runs are
>greater to residential areas. And there have to be more than 3 times as
>
>Actually, residential lines are money losers. When the telephone started
>to become a commodity, business users subsidized residential customers.
>This still holds true today. The idea was to make residential service
>affordable to all (I beleive Megazone touched on this earlier). The
>cost of providing a dial tone is $38 in Minnesota (this is what I have
>figures for). This covers all of the costs from putting the cable into
>the ground to maintaining the voice switches and everything in between.
>What do you pay for a residential line?

I probably shouldn't be feeding this off-topic discussion, however
I also use to work for one of the largest non-RBOC telephone companies
in the US and our average investment for "all facilities" (including
inside and outside plant) to provide basic service was in the
$1400 range per customer (averaged over a population of over
a million customers). The more rural investments were considerably
higher ($5000 range), and the more urban considerably less. There
aren't very many businesses that would say the return on investment
for basic services ($1400 divided by ~$25/month) is anywhere near
reasonable. And when one considers that most telephone companies
have something around 80% to 90% residential service per exchange,
some form of staff to handle business, etc., I don't think I'm going
to start a competetive telephone system for residential services
(nor do you see anyone or any institutions wanting to invest in
those that are primarily residential).

Its also quite interesting to see what telephone switching vendors
like Northern Telecom (etc) charge for software upgrades (i.e., ISDN).
Try to guess at how many zero's behind the leading digit (excluding
any hardware, line cards, and rearrangement of outside facilities).