[ale] off topic fwd: modem tax

[The Man in the Yellow Hat]

Hey guys and gals...this came from another list that I am on
(dc-stuff at dis.org). I thought it was interesting and probably something
that everyone might want to read.



>Date: Tue, 20 Jan 1998 22:34:59 -0500 (EST)
>From: danny burstein <dannyb at panix.com>
>To: dc-stuff <dc-stuff at dis.org>
>Subject: some more on the "modem tax" - it's _almost_ real this time
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>( *****  the new info starts at the asterisked section ******* )
>
>Given the extreme interest in this, the back and forth postings, and some
>_very_ recent significant actions, I thought it was worth posting this.
>
>a) disclaimer: I work for an ISP so obviously have a certain viewpoint.
>
>b) the numbers I use below are for the sake of example and shouldn't be
>considered exact
>
>I realize this topic has been thrashed to death, but there were some
>changes in the last few days which might be worth looking into, namely
>both a _reopening_ by the FCC _and_ some new court action by local telcos.
>
>History: the traditional "modem tax" would have classified internet
>service providers (ISPs) in the same category as long distance telcos
>(technically inter-exchange carriers/IXCs).
>
>The IXCs have to kick back fees, _per minute_, to the local telcos (at
>both ends of the connection). So, for example, if you make a call from NYC
>to LA using Joe's Bar and Long Distance, and pay Joe $0.25/minute, Joe
>hands over $0.03 to both Bell Atlantic (NYC) and PacBell (Calif).
>
>The local telcos tried getting ISPs classified the same way, so they would
>have to kick over the same per minute charges.
>
>Last year the FCC said _NO_ to this, and kept ISPs classified as
>traditional end-user business customers.
>
>Now, given that ISPs are _heavily_ phone dependant, any "regular" rate
>increases cause them inordinate problems. It's not an instant kill, but if
>all business phone rates go up, say, $5/line (which they just did courtesy
>of the "FCC fee") then that's $1/customer (assuming 1:5 modems:customers),
>or about 5% of income right off the top. Again, not an instant kill, but
>very messy.
>
>****  HOWEVER, in the past two weeks two things have occurred:  ****
>
>a) The FCC has _just_ announced that they are holding new hearings as to,
>for want of a better term 'what is a telco?' This is partially under the
>guise of the (so-called) "universal access fee" as well as various other
>intricacies, and has some pretty serious potential ramifications, kind of
>like a Constitional Convention would.
>
>b) Last week, various telcos filed an appeal in the Eighth Circuit Court
>of Appeals (St.  Louis) against last year's FCC decision , and are
>attempting to, as one of their PIOs stated, "end the free ride" that ISPs
>have been getting. I have not seen _any_ news coverage of this.
>
>The latter comment is currently on the official Bell Atlantic recorded
>news system, at 1-800-647-NEWS and is spoken by "Jane Keeler with Bell
>Atlantic's Newswire". It's Tuesday's announcement, so will probably
>disappear shortly.
>
>It's quite interesting that they've chosen to file in the Eighth Circuit
>rather than in more obvious venues... I don't have access to the actual
>paperwork but would be fascinated to see what claims are made.
>
>
>_____________________________________________________
>Knowledge may be power, but communications is the key
>                     dannyb at panix.com
>[to foil spammers, my address has been double rot-13 encoded]
>








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