Low Rates and Bankruptcy for All

摘要

Thirty cents a minute. That's how much it cost me to call home when I was in college about 20 years ago. That was for a 400-mile domestic call. Overseas calls were obviously much more expensive. And I learned just how expensive they were when I kindly let the grad student next door use my telephone (his was on the blink) to ring up Tokyo. He started the call at 11:53 pm and ended it at midnight exactly. Unfortunately, AT&T's recording and billing software systems recognized 12:00 am as the start and the end of different days. So I got billed not for 7 minutes, but for 24 hours and 7 minutes -at $2.42 a minute, for a total of $3,501.74. (When I went to straighten it out, I was treated to a rare sight: an entire telephone billing office convulsing with laughter.) Today, if I actually want to make a 1,447-minute phone call to Tokyo, it will run me $92.61 - or just 6.4 cents a minute. Turns out the cost of calling Tokyo has halved roughly every four years for the past two decades. Likewise, the price of dialing long distance within the US has also plummeted. Now it's not hard to get a rate of 3.9 cents a minute, which is nearly eight times less than in my college days. Why the mammoth fall in telecommunications prices? Part of the answer is what you'd expect: computers, switches, and fiber optics. The unexpected part: irrational exuberance, overbuilding, and excess supply.