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UPDATE: Internet Charges for Phone Lines[Subject Prev][Subject Next][Thread Prev][Thread Next]
- To: seaoc(--nospam--at)seaoc.org
- Subject: UPDATE: Internet Charges for Phone Lines
- From: Joe McCormick <jmccormick(--nospam--at)proaxis.com>
- Date: Tue, 13 Jan 1998 22:32:00 -0800
>This is available at >http://www.fcc.gov/Bureaus/Common_Carrier/Factsheets/ispfact.html >-patrick >_______ > >THE FCC, INTERNET SERVICE PROVIDERS, AND ACCESS CHARGES > >This fact sheet offers informal guidance on an issue that has generated a >great deal of public interest. For more specific details about the >proceedings currently before the Commission, please visit our web site >(http://www.fcc.gov/). > > >In December 1996, the Federal Communications Commission (FCC) requested >public comment on issues relating to the charges that Internet Service >Providers (ISPs) and similar companies pay to local telephone companies. On >May 7, >1997, the FCC decided to leave the existing rate structure in place. In other >words, the FCC decided not to allow local telephone companies to impose >per-minute access charged on ISPs. > >Please Note: There is no open comment period in this proceeding. If you have >recently seen a message on the Internet stating that in response to a request >from local telephone companies, the FCC is requesting comments to ><isp(--nospam--at)fcc.gov> by February 1998, be aware that this information is inaccurate. > > >The FCC issued an unrelated public notice, DA 98-2, on January 5, 1998 in >connection with a report to Congress on universal service. Pursuant to the >FCC's 1998 appropriations legislation, the Commission must submit a report by >April 10, 1998 on several issues including the legal status of Internet >services under the Telecommunications Act of 1996. Comments in response to >the public notice are due January 20, 1998, and reply comments are due >February 2, >1998. Informal comments may be sent by email to <usreport(--nospam--at)fcc.gov>. > > >Background Information > >Each long distance telephone call you make includes per-minute fees that your >long distance carrier pays to the originating and terminating local telephone >companies over whose facilities that call also travelled. Those fees, which >are >designed to recover the costs to local telephone companies for use of their >facilities, are referred to as "access charges." > >As part of its Access Reform proceeding, CC Docket 96-262, the FCC in >December 1996 sought comment on the treatment of ISPs and other "enhanced >service providers" that also use local telephone companies' facilities. Since >the >access charge system was established in 1983, enhanced service providers have >been classified as "end users" rather than "carriers" for purposes of the >access charge rules, and therefore they do not pay the per-minute access >charges that long-distance companies pay to local telephone companies. > >In the Access Reform Order, FCC 97-158, adopted on May 7, 1997, the FCC >concluded that the existing rate structure for ISPs should remain in place. >In other words, the Commission reaffirmed that ISPs are not required to pay >interstate access charges. > >When it began the Access Reform proceeding, the Commission also issued a >Notice of Inquiry, CC Docket 96-263, seeking comment more broadly on usage of >the public switched telephone network by Internet and interstate >information service providers. A Notice of Inquiry is a request for >information that does not involve any specific proposed action. The >Commission stated in the Access Reform order that it intended to use the >Notice of Inquiry record >to develop a Notice of Proposed Rulemaking (NPRM) proposing actions to >facilitate the efficient deployment of data networks. > > >Frequently Asked Questions on Internet Services and Access Charges > >Q: Does the FCC regulate the rates charged by Internet Service Providers >(ISPs)? > >A: No. ISPs are considered "enhanced service providers" under FCC rules. The >FCC does not regulate the rates that enhanced service providers charge to >their subscribers. > > >Q: How does the FCC regulate the rates that local telephone companies charge >to ISPs? > >A: ISPs purchase local phone lines so that customers can call them. Under FCC >rules, enhanced service providers ISPs are considered "end users" when they >purchase services from local telephone companies. Thus, ISPs pay the >same rates as any other business customer, and these rates are set separately >in each state. By contrast, long-distance companies are considered >"carriers," and they pay interstate access charges regulated by the FCC. > > > >Q: How are access charges different from the rates ISPs pay now? > >A: Today, ISPs typically purchase "business lines" from local phone >companies. Business lines usually include a flat monthly charge, and a >per-minute charge for making outgoing calls. Because ISPs receive calls from >their >subscribers rather than making outgoing calls, ISPs generally do not pay any >per-minute charges for their lines, which is one reason many ISPs do not >charge per-minute rates for Internet access. Access charges, by contrast, >include >per-minute fees for both outgoing and incoming calls. The rate levels of >interstate access charges are also in many cases higher than the flat >business line rates ISPs pay today. > > > >Q: Have local phone companies requested authority from the FCC to charge >per-minute rates to ISPs? > >A: Since 1983, there has been an ongoing debate about whether enhanced >service providers should be required to pay access charges, based on the >contention that these companies use local networks in the same manner as >long-distance carriers. In June 1996, four local telephone companies (Pacific >Bell, Bell Atlantic, US West, and NYNEX) submitted studies to the FCC >concerning the effects of Internet usage on these carriers' networks. The >companies >argued that the existing rate structure did not reflect the costs imposed on >local telephone companies to support Internet access, and that Internet usage >was causing congestion in part of the local network. In connection with these >studies and other pleadings, several local phone companies have asked the FCC >for authority to charge interstate access charges to ISPs, although they have >not filed a formal petition for rulemaking. > > > >Q: Is the FCC considering allowing local phone companies to impose access >charges on ISPs? > >A: The FCC requested public comment in December 1996 on whether ISPs should >pay current access charges, and more generally on how Internet and interstate >information services that use local telephone networks should be >treated. The Commission concluded on May 7, 1997 that ISPs should not be >subject to interstate access charges. There is currently no open comment >period on this issue. > > > >Q: Does the FCC currently have an ongoing proceeding on Internet and >interstate information services? > >A: The FCC issued a Notice of Inquiry (NOI) in December 1996, at the same >time as it asked for comment on whether ISPs should be subject to access >charges. The NOI asked generally about how to create incentives for companies >to >make the most efficient use of the telephone network for Internet and other >information services. The comment period for the NOI is closed, but the FCC >has stated that it plans to issue a Notice of Proposed Rulemaking (NPRM) >asking >for comment on more specific proposals based on the responses to the NOI. The >NPRM will consider actions other than imposition of per-minute access charges >on ISPs. > > > >Q: What is the difference between a Notice of Inquiry (NOI) and a Notice of >Proposed Rulemaking (NPRM)? > >A: A NOI is the earliest step in the FCC's process and typically asks >questions in an effort to gather enough information to make informed >proposals on a given topic. A NPRM is a request for comment on specific >proposals made by >the Commission. After the FCC reviews the comments filed in response to an >NPRM, the FCC can issue a Report and Order adopting new rules. > > > >Q: Are comments filed by other parties be available for review? > >A: Yes. All formal comments are available for review in the FCC Reference >Center in Washington DC, and copies may be purchased through International >Transcription Services, which can be reached at 202-857-3800. In addition, >copies of comments that were submitted on diskette are available for review >at http://www.fcc.gov/ccb/comments.html. > > > >Q: Is the FCC considering taxes for use of the Internet or online services? > >A: No. The debate involves charges levied by local phone companies, not >government taxes. > > > >Q: Is this the "FCC modem tax" that has been floating around the Internet in >various forms for several years? > >A: The "modem tax" referred to a proposal in 1987 to require enhanced service >providers to pay interstate access charges, which at that time were >significantly higher than they are today. The 1987 proposal was abandoned in >1988. >The current Access Reform proceeding is entirely separate. > > >For more specific questions, see the Access Reform page on the on the FCC Web >site at http://www.fcc.gov/isp.html.
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