Long-distance used to be a sweet business for global carriers but a one-two punch of deregulation and VoIP has caused the business to crumble. Not that we need any more evidence about this reality but BCE Inc. posted a 15.2% decline in LD revenue in the first-quarter. BCE, which owns Bell Canada, also lost 5.9% of its residential telephone lines as rivals such as Rogers and Videotron scooped up new customers. Like many North American carriers, BCE needs to find new sources of revenue to replace lower LD and local sales. Some of it comes from high-speed Internet access business (which, in some cases, replaces second lines), some of it comes from wireless service (another potential substitute for a residential line), and some comes from next-generation IP services, which sport lower profits margins than legacy services. Bottom line: it's tough for carriers to grow revenue so it becomes an endless game of cost-cutting and productivity gains. This explains, in part, why carriers are so gung-ho on changing the net neutrality rules by levying downstream tollgates and packet prioritization fees because they are a way to generate more revenue from the Internet's growth.
Update: For more views today on net neutrality, check out Tim Berners-Lee's essay and TechDirt.