Letter to MD PSC, re: Bell Atlantic ISDN Tariff

Here's a letter I wrote to the Maryland Public Service Commission for consideration during their meeting regarding Bell Atlantic's proposed ISDN Tariff. See the Consumer Project on Technology's Page on Bell Atlantic ISDN Action for more information.

Note that I've replaced the signature block I actually used with one more appropriate for use on the Internet.

Daniel P. Gahagan
Executive Secretary
Maryland Public Service Commission
16th Floor
6 St. Paul Street
Baltimore, MD 21202-6806

Dear Sirs and Madam,

I write to you today in response to the ISDN Tariff Bell Atlantic Transmittal 963, Dated June 3, 1996.

Although I am not today a resident of Maryland, many of my friends whom I help on computer-related matters are, and I consider it as much my home as the District or Virginia. As with many things in the past, what happens in one of these three can deeply affect the other two. Towards that end, it is important to make sure that things are done right the first time, lest the same mistakes be repeated elsewhere and the effects linger on horribly for years or decades.

I am thirty years old, currently a resident of the City of Alexandria in Virginia, and I've lived in this same apartment complex for several years. I was first introduced to the concept of ISDN while an employee of the Defense Information Systems Agency back in 1989, and was immediately struck by the elegant concept of not having to take digital data, turn it into analog sounds, then redigitize that data for transmission to the remote end, where that process would have to be reversed. Not only would the quality of the transmission be greatly increased, but by avoiding the intermediate redigitization steps, significant increases in capacity could be achieved. To me, this seemed to be an ideal technical solution to a whole host of problems. I decided then and there that I wanted to get ISDN installed for myself as soon as it was feasible to do so, and I'm still waiting.

Today, I work for America Online, the largest Online Service Provider in the world. We have over six million users, but we also have a problem. Many of the most interesting technologies (already here or upcoming, such as the world-wide web, interactive multimedia, virtual worlds, streaming audio, videoconferencing, etc) are bandwidth-starved. Even 28.8 modems are barely enough to satisfy the requirements of the world-wide web, and even then they are becoming less and less capable as more and more sites add more multimedia content in an attempt to draw and sustain more visitors. If we can't continue to provide new and unique content, and deliver that to the customer in a reasonably timely fashion for a reasonable price, the whole thing will ultimately come crashing down. And that's very unfortunate, because as was stated in ACLU vs. Reno "As the most participatory form of mass speech yet developed, the Internet deserves the highest protection from governmental intrusion." But to keep this new form of speech free, we have to have participation. And we can only have participation if we can keep users interested, and that can only happen if the necessary high-speed access is universal. ISDN clearly isn't the ultimate basic Internet access method, but it's here today (if only it can get tariffed at a reasonable rate), and is a good stepping stone to the technologies around the corner (the ADSL family, cable modems, etc...).

As I'm sure you've heard, the U.S. economy is moving away from an agrarian/manufacturing economy, and towards a service/information economy. The Internet clearly represents the present health and well-being of America Online, as well as the future of the U.S. economy, and the economy of the rest of the world, but this doesn't do us much good if we let the LECs kill the thing before it ever really gets a chance to take off. We must act now to ensure our present, as well as the future of our grandchildren and this world that we have borrowed from them. The most immediate step we must take to is guarantee universal high-speed access to the Internet to anyone who wants it.

Bell Atlantic will try to tell you that they have to recoup the cost of installing SS7 across all their switches, because that software is required for supporting ISDN. That's simply not true. They ordered virtually every single modern switch pre-loaded with virtually all the software it could possibly be installed with, including the base SS7. They've already recouped this cost from the average ratepayer in the form of necessary fees to pay for upgrading the infrastructure, and they should not be allowed to charge users for that cost a second time.

Bell Atlantic will also try to tell you that ISDN should be priced according to its value to the customer, not according to their cost. However, they are a monopoly, and one of the things a monopoly has to do is guarantee universal access to basic services, at a fixed amount above their cost to provide those services. Until there is real competition in the local loop to cause the market forces to take over, they should not be allowed to price anything based on its value to the customer as opposed to what it costs them to provide that service.

Bell Atlantic will also try to convince you that it is very expensive to backhaul connections to support ISDN to COs not properly equipped. What they won't tell you is that virtually all COs have at least one 5ESS switch installed, fully capable of supporting ISDN and all the latest services. Again, they want to charge again for something that has already been paid for.

Bell Atlantic will also argue that users who are allowed unlimited data access will "nail up" those lines and never take them down. This does not hold true for most users. This would be true if the charge was per-call, in which case you'd get some calls that last years (but might cost only $0.08). However, one of the hallmarks of ISDN is its very short call setup time (less than one second), so that you can have an ISDN connection being continually torn down and brought back up virtually all day, and yet the user feels like they are directly connected to the Internet at all times (a minor hiccup in the in looking up the name of a machine on the Internet can easily take more time than the call setup for an ISDN connection). If it's priced right, and Bell Atlantic puts even minimal effort into watching usage patterns and developing solutions (hardware, software, and incentives) to make bandwidth-on-demand feasible, then the whole "different call usage patterns" capacity issue simply never materializes.

Bell Atlantic will try to avoid at all costs the issue that, once a call gets into the network, a conversation that originated from a POTS line has all the same bandwidth and support costs as a call that originates on an ISDN line. At that point, "bits are bits" and it costs the same amount to move bits around no matter how they originated. However, the user sees a much different picture, with either 28.8Kbps base throughput available to them (on pristine lines) in analog mode, versus 64Kbps base throughput available on digital lines. And this doesn't begin to address the additional features that become possible with end-to-end digital communications.

Also, Bell Atlantic doesn't have to pay for the equipment to digitize (or redigitize) your analog connection, instead you get to pay for that when you buy your CPE (and expensive Customer Premises Equipment it is, too). They're also getting out of the business of paying to provide line power for telephones, and users will now have to provide their own battery backup for those times when emergencies happen. Except for the backbone capacity issue, once a call gets set up, one that lasts five hours costs just as much as one that lasts five minutes. The real costs are in maintaining the quality of the lines from your home to your CO, not in pushing bits across those lines and the trunks.

When analyzed in the cold, hard light of reason, it it almost certain to cost the telephone companies less to support purely digital communications as it does to support analog communications. The only difference is that purely digital communications are "newer" and more capable, and therefore they want to charge more for them. Do you remember when you used to pay one price for "Regular" gasoline and extra for "Unleaded", when the only difference is that "Regular" was "Unleaded" with lead added? Well, Bell Atlantic is trying the same kind of methodology, but unfortunately, we don't have dozens of local telecommunications providers that can provide the kind of competition that would force that pricing to realign itself to reality.

One of the real reasons that Bell Atlantic is trying to charge so much for ISDN service is because they are trying to protect other cash-cow services. However, they don't appear to have learned the lesson of IBM -- you need to let all the various business units of your company compete for customers, and if one part of the company suffers at the hand of another, then the ultimate winners are both the customer (who gets better service at a better price) and the company, since happier customers ultimately generate more business for you overall. Protecting cash-cow services ultimately alienates the customer (they get angry you're overcharging them so much), and drives them to a competitor that will price products and services more reasonably. But when you're a customer of a monopoly, you don't have that option, and therefore we have to make sure that the monopolies implement the lessons learned by the Rise and Fall of IBM.

In closing, I'd like to point out that flat-rate service in the $20.00-40.00 range is available in many other places, including Arkansas, California, Illinois, Michigan, New Mexico, Ohio, Tennessee, Wisconsin, as well as being recommended by the PUC in another Bell Atlantic territory, Delaware.

I hope that Maryland can continue its fine tradition of leadership in local issues by putting their collective foot down and making Bell Atlantic provide a basic service such as ISDN at a reasonable cost to the consumer (who, after all, doesn't have a choice as to where they can get their phone service from).

Brad Knowles,                                  MIME/PGP: brad@shub-internet.org
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