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Arnold Kling has a Ph.D. in economics from MIT; founded, one of the very first commercial websites, in 1994; separated from Homefair in January 2000 after it was sold to Homestore; is author of Under the Radar: Starting Your Internet Business without Venture Capital, and is an essayist. Send comments to us at

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« The Phone Deregulation Argument | Main | Declan on Privacy »

March 01, 2004

Clay on VOIP

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Posted by Arnold

A couple of excerpts from his latest.

If Plan A is "Replace the phone system slowly and from within," Plan B is far more radical: "Replace the phone system. Period."
...Where Plan A is a fight between incumbent and upstart phone companies, Plan B says that we no more need a phone company than we need a text company.
...telephony is treated as a vice instead of an essential service -- the taxes and surcharges on a phone bill are more in line with the markup on alcohol and tobacco than with gas or air travel.

I think that voice will "tip" away from telephone companies when there is enough wireless Internet access available. If I can get wireless Internet access nearly everywhere, then I can ditch my cell phone and landline phone in favor of an Internet device that happens to be able to handle voice.

Comments (2) + TrackBacks (0) | Category: telecom, FCC


1. Brad Hutchings on March 1, 2004 12:49 PM writes...

Don't underestimate the trend to move away from wired phone lines (to wireless, VOIP, etc.), but also don't underestimate the factors which will slow the migration. Case in point... In my city's newsletter mailer this month, there is a column addressing the problem of movng to alternative phone systems from the Sheriff's point of view. According to the Sheriff, there are a lot of people ditching their land lines in favor of cell phones as their primary phones. This presents a problem for 911 call handling, as cell phone 911 is dispatched through the CHP first, then to the appropriate local law enforcement center. They have difficulty pinpointing location and will continue to have that difficulty to some degree even when FCC rules fully kick in to require positioning data on cell phones. Finally, he cautions that cell phones don't always work because of hilly areas, congestion, etc. and cautions those who have a propensity to need emergency services against ditching their land lines completely.


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2. John on June 30, 2004 01:36 PM writes...


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