Internet Calling Pressures Bells to Lower Rates

The New York Times reports:

Competition in the phone business, intensifying this year as Internet-based calling has taken root, has reached the point where many industry experts are anticipating an era of remarkably cheap and even free calls.

That era would be built on a vast migration of phone service from traditional networks to the Internet, where the calls become just another way to use Internet connections that consumers are paying for anyway.

"People are going to look at voice communications as something they expect to get for free," said Henry Gomez, general manager of Skype, which eBay bought last year for $2.6 billion. The company usually charges a few cents a minute for calls from computers to regular phones, but in May it eliminated those fees through the end of the year for users in the United States and Canada.

New competitors, including the major cable companies and start-ups like Vonage and SunRocket, are putting intense pressure on traditional phone companies like AT&T and Verizon that have built multibillion-dollar empires by selling phone service over copper wires. On the defensive, AT&T and Verizon are discounting heavily and pushing customers toward packages of more advanced services.

Competition is good.Only government has a monopoly.