Whenever I call a friend in the UK, I pay something in the order of 0.5 to 1 euro per minute on telephone fees. But if I use VoIP instead, I pay next to nothing. Yet, in both cases I am using (almost) the same infrastructure to route the call.
Why the price difference? Are calls over PSTN overpriced? Or is VoIP underpriced? What would happen if VoIP was more popular?
For long distance, most definitely. “Five cents a minute” type price levels are at least a factor of a hundred too high. Note that there is a lot of cost involved going from a regular phone to/from the Internet, but if you’re paying a flat fee for that then long distance is essentially a freebie.
There is a major war going on in the US right now with the old Phone Companies trying to kill upstart VoIPs. The latest gimmick is requiring them to implement full 911 service in 120 days. Note that the landline and wireless Co.s had far, far longer to implement 911. You can almost smell the bribes. Sorry, I mean “campaign donations.”
Oh, I get to steal a thread – how is this viewed in Europe? I seem to think those telephone companies were nationalize or semi-nationalized. What are the death throes like there?
Who pays? Everyone. That is, every owner of a piece of the internat pays for that piece. If you connect your computer to the internet and pay a monthly boll, for example, that connection becomes part of the internet… and it’s the part that you pay for.
As for “Voice over Internet Protocol” calls, I can think of a number of reasons they are cheap:[ul][li]VoIP companmies don’t have the old infrastructure and pension costs that the traditional phone companies do. []VoIP companies don’t have to maintian the same reliability, or provide things like public-safety calls (911 calls, in the NANP). []Pure-computer VoIP outfits like Skype can offer computer-to-computer service for free, relying on internet connections that are already paid for. (I understand that Skype charges for calls that terminate on the regular phone network.)Both new VoIP companies and traditional phone companies are taking advantage of a glut of international optical fibres that were laid in the nineties to lower long-distance communication costs. [/ul][/li]
Traditoinal phone companies are moving to the VoIP technology inside their networks as well; advertising its network capabilities to telcos was one reason equipment supplier Northern Telecom changed its name to Nortel Networks.
It doesn’t really look like this is the case. Verizon has it’s own VoIP service and will soon allow access to their 911 network, Bell South was considering to do the same (re 911), I don’t know if they implemented it yet. While they may have tryed to kill it at first, they know that is pointless and actually counter productive to their end game goal of establishing a fiber high speed network to homes.
The big difference in costs are taxes and regulated prices that are included in the standard phone service, including that tax that goes back to the Spanish- American war.
Which tax? (If you can point me in the right direction it might save me some research time. Thanks.)