Festival of 'Free' Calls TV Interviews Why Free Beer?

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Why Free Beer? This page was inspired by Russel Whitworth's Campaign for Free Beer Page, which tries to demonstrate why free local calls aren't viable, by transposing the arguments to Free Beer. The page is written with a heavy dose of sarcasm and irony, but it's a bit patchy in places, so it's not entirely clear what Russel's position is. However, what if we think not of FREE Beer, but UNMETERED Beer? The main problem with comparing beer to bandwidth is that whilst the costs of producing beer (or almost any other consumer product) are in proportion to the amount of beer being produced, the same cannot be said of a modern telecommunications system. And the UK's telecommunications infrastructure is one of the most modern in the world (and certainly more modern than that in the U.S. as a whole, where unmetered local calls are taken for granted!). Russel's points are in italics. Ingredients Beer is made from: Barley, which grows in the ground of its own accord. Hops, ditto. Water, which falls from the sky. So... all the basic ingredients are free! And what about paying the people who maintain the plants and harvest them, and then the cost of transporting them to the brewery? As with most products in the modern world, the main cost of raw materials is the human labour to make them usable. An individual telephone call doesn't use any raw materials other than a few electrons travelling down a fibre-optic cable, which has already been laid. The costs of laying the cables has already been met. Fibre-optic cable is exremely maintenance-free and the only other costs are maintaining the "last mile" between the exchange and the customer, and of course the exchange itself. The customer end of the operation is paid for by the customer anyway, and BT (by far the UK's largest telecommunications company) is proud of the fact that it is the only national telecoms carrier in the world with 100% digital exchanges. Expanding them is a matter of adding a new computer interface card, rather than the cost of lots of heavy equipment and a building to house it, as required by old analogue exchanges. It is said that the cost of working out the duration and charge for local calls actually far exceeds the charge itself! As with the beer, the main cost is human labour, which is paid for by our monthly line subscriptions, and as for the cost of installing lines at homes and businesses, you'll get a penny change out of £100 (not including VAT). Should we note that BT's line installation costs are the highest of any telecommunications operator in Europe? Perhaps we shouldn't... Pubs It is well-known that pubs make their profit from: Crisps and peanuts. Slot machines. Mixers. Beer doesn't really come into it. But if the consumption of beer increases, then so will the turnover of two out of the three items above. So free beer will increase the profitability of pubs. The telecommunications equivalents of crisps, peanuts, slot machines and other drinks (voice mail, callback services, multiple lines, internet access, digital lines, answering services, etc.) are offered by the same supplier as the telephone line, and a survey carried out by Cable and Wireless Watch has shown that unmetered local calls indeed do increase the take-up of a telecommunications company's other services. A further difference is that whilst we accept the need to pay a standing charge for our telephone lines, pubs don't charge admittance fees. Some clubs do, but these include an amount of free drinks. Our monthly "admittance fee" is enough to cover the cost of "unlimited local beer". Breweries Large breweries make their profits from: Owning pubs. Selling soft drinks. Because Free Beer increases the profitability of pubs, it follows that it will increase the profitability of the major breweries. Imagine a situation in which all pubs belong to one of a handful of huge breweries (subsidiaries of which manufacture and supply all the extras you'd expect in a pub) and where there can be no more than two competing pubs within walking distance of any property - that's the situation with UK telecommunications, and indeed most people outside urban areas don't even have the choice between two operators. The "breweries" must compete either on the quality of their "beer" or its price - as there is no corelation between the amount of "beer brewed" and its cost (once the "brewery" and "pubs" are built, costs are so small as to be negligible), whatever the "brewery" charges is pure profit. We're advocating that as an introductory measure, "breweries" offer "unlimited beer" at specified times of day when the "pubs" are not so full. At all other times, "drinkers" have to pay a nominal charge to compensate the "brewery" for the congestion. However, as more "pubs" are built, they will become less congested, and an unlimited tariff could apply at all times. Small breweries will be able to make money from: Long-distance beers (see below). Charging visitors for tours. Selling T-shirts. EU development grants. There are only big "breweries" left. All the small ones have been bought up by the big ones, so this is irrelevant. There are various niche markets in the telecommunications industry (eg wholesale data and/or voice bandwidth) and so there are a few "breweries" whose names aren't known to the general public (Colt, Energis, etc), but that doesn't mean they're small! Tax Everyone knows that at least 93% of the price of beer is tax. In other words, the tax is 1,329% of the raw price. But if its raw price is reduced to zero, the tax becomes 1,329% of zero, which is zero. There's a confusion here between "cost" and "price". Tax isn't charged on cost, but on retail price and/or profits. If a call costs one fifty-thousandth of a penny (0.00002p) and a telco charges sixpence for that call (6.00p), the profit margin is well beyond the wildest dreams of almost any business, or the Tax Man. Why "local" beers? Well, long-distance beers involve transportation costs. It would be ridiculous to expect long-distance beers to be free. Let's define "local" in terms of telecommunications: a true "local call" is any call which remains within the same company's exchange. The only reason telecommunications companies cannot be expected to offer non-local unmetered calls is because they all have to pay each other interconnect charges which are time-based. If the various telcos agreed to pay each other flat rates, they could charge their customers flat rates, which could be part of standard monthly line rental charges. Needless to say, CUT is also campaigning for a fairer charging model between telecommunications companies, not just between them and their customers. Coming Soon... The Campaign for Equal Access to Long-Distance Beers Roaming agreements to ensure that you can get free beers at other than your local pub 10% off all Long-Distance Beers bought for your Friends & Family Indeed, there is no reason to expect that telcos should not enter into reciprocal arrangements to allow each others' customers use of their facilities for a flat fee - as long as they charge each other flat fees in the first place... Text by Richard Sliwa