W8SDZ@SIMTEL20.ARPA (Keith Petersen) (10/19/87)
Here is more information on the modem fees issue, from a file called
LEGALQ&A.TXT which was uploaded to my BBS. It was written by someone
at Telenet and is presented here "as-is" for informational purposes.
--Keith Petersen
Arpa: W8SDZ@SIMTEL20.ARPA
Uucp: {bellcore,decwrl,harvard,lll-crg,ucbvax,uw-beaver}!simtel20.arpa!w8sdz
GEnie: W8SDZ
RCP/M Royal Oak: 313-759-6569 - 300, 1200, 2400 (V.22bis) or 9600 (USR HST)
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QUESTIONS AND ANSWERS
regarding
THE FCC'S ACCESS CHARGE PROPOSAL
DOCKET 87-215
September 1987
Personal computer hobbyists and users of on-line information
services and BBS have posted questions on various bulletin
boards regarding the FCC's current access charge proceeding.
What follows are some answers developed by Telenet's Regulatory
Department.
Question: Why don't access charges apply to "private" systems?
Answer: The FCC's NPRM identifies "enhanced service
providers" as targets for the imposition of access
charges. Private systems do not appear to fall
under the Commission's definition of enhanced
service providers.
Question: How will the access charge proposal hurt local BBS?
Answer: Since the FCC only has jurisdiction over interstate
communications, calls to a BBS located in the same
state as the calling party would be unaffected by
the FCC's proposal. Callers who reach a BBS located
in a distant state via a Value-added network, however, would
pay access charges. Thus, BBS systems which serve a "community
of interest" which extends beyond the BBS' home
state would be particularly impacted.
Question: What is the $4.47 supposed to pay for that is not
covered currently?
Answer: The $4.47 per hour cost of access results from a
POLITICAL determination regarding the price of local
versus long distance telephone services. It has no
real ECONOMIC justification. Under the formula
developed for interexchange voice services, more
than half of the $4.47 per hour access charge
represents a subsidy payment from long distance
telephone users to help defray certain costs
incurred in providing local exchange telephone
service, and part of the remainder of the charge
covers costs incurred in providing specialized
interconnections which are used only by long
distance carriers. The FCC's NPRM simply proposes
to take the formula structured for interexchange
carriers and apply it to enhanced service providers.
Question: How many jobs will be lost if access charges go into
effect?
Answer: There is no way of knowing this. Individuals who
use data communications to support a "cottage"
industry, e.g., free lance programmers, could find
that the costs of access render them unable to
continue their businesses. Although it could be
argued that access charges would create jobs (if for
example libraries return to card catalogs for
bibliographic research rather than electronic
database retrieval), such inefficiencies should
perhaps not be promoted as a matter of public
policy.
Question: What will access fees cost taxpayers if access
charges go into effect? Don't school districts,
public libraries, and government agencies all use
dial-up data services?
Answer: Again, there is no way to predict what the
imposition of access charges will cost taxpayers in
terms of on-line services that are currently used by
schools, libraries, and other public agencies.
Hourly costs of such services would certainly
increase substantially, forcing either higher total
payments by public agencies which use them, or a
commensurate reduction in usage (and thus poorer
service to the taxpayer).
Question: Isn't "value-added network" a vague term? How can
access charges be applied fairly when we don't even
know what a value-added network is?
Answer: What constitutes a value-added network is indeed
vague, yet the FCC proposal would apply not only to
such networks but to all "enhanced service
providers" -- a broader but equally vague term. The
point, at any rate, is a good one. Not only would
it be virtually impossible for a local exchange
carrier to identify an enhanced service provider in
order to assess access charges on his traffic, it
would also be quite difficult to determine what
portion of any customer's traffic is "enhanced," and
what portion of that is interstate.
Question: What exactly is "stored and forwarded" data? If a
BBS operator physically transports a CD ROM full of
recent messages and data from San Fancisco to her
Chicago BBS, is that any less "long distance" than
if the data is downloaded from San Francisco to
Chicago?
Answer: Clearly, the end result is the same. The BBS
operator, however, would pay access charges in the
latter case under the FCC's current proposal, if
local exchange dial access is used.
Question: Could not certain users such as colleges and
universities, including dormitories, avoid all
access charges when communicating via Telenet to The
Source if there were private leased lines from the
colleges to Telenet and dedicated lines between
Telenet and The Source?
Answer: If there were no use of the local exchange, as
indicated by this example, access charges could be
avoided. However, relatively few terminal users
have sufficient traffic volume to justify the cost
of a leased-line connection to Telenet.
Question: I reside in the same state as the telecommunications
services I use. How will my rates be affected?
Answer: Rates for INTRASTATE data communications are not
affected by the FCC's NPRM in Docket 87-215. FCC
action on this issue, however, sets a precedent for
possible state action pertaining to intrastate
access charges.
Question: What's the status on the access charge proposal? I
heard that Telenet was exempt. Any truth to this?
If not, who do I write to and when -- or have I
missed the deadline?
Answer: Telenet is not exempt from the FCC's access charge
proposal, but rather is a prime target since there
is no doubt that, as the largest value-added network
in the U.S., Telenet is a highly-visible enhanced
service provider.
There is still plenty of time to register your
concerns with the Federal Communications
Commission; letters on the subject will be timely
if received by October 26th.
Send copies of your letter to each of the four FCC
commissioners (Chairman Dennis Patrick, Commissioner
James Quello, Commissioner Mimi Dawson, and
Commissioner Patricia Dennis); William Tricarico,
FCC Secretary; Gerald Brock, Chief, FCC Common
Carrier Bureau; and your Congressional
representatives. Letters to the FCC can be sent to
1919 M Street NW, Washington, D.C. 20554; letters to
Congress simply require the zip code 20515 for the
House and 20510 for the Senate.
Question: Hey, I heard that the FCC doesn't read your letters
unless they arrive on the right form with the right
number of copies! What do I need to know to comply?
Answer: Formal legal briefs need to follow a set format, but
informal letters simply need to include the header
"Regarding: FCC Docket 87-215" in order to be filed
with the appropriate proceeding.
Question: If enhanced service providers pay access charges,
long distance rates will come down so use of the voice
network will go up and rates will come down
further. Why don't we support lifting this
exemption?
Answer: Long distance rates MIGHT be reduced by less than
one-half of one percent, or by 1 cent for every $2.00
spent on long distance services. This will have
virtually no impact on the use of the network for
voice services. At the same time, the imposition of
access charges on enhanced service providers (at the
rate of approximately $4.50 per hour) would result
in diminished use of the network for data
communications and the loss of some services.
Residential, small business, library, and
educational users of enhanced services would suffer
the greatest hit.
Question: The Telenet analysis paper states that "originating
rates are only available for traffic that also
terminates using dial access which ordinary long
distance (MTS) calls do, but most ESP traffic does
not." Please explain. Why does ESP traffic not so
terminate? Also, is it true that MTS companies
already pay full freight?
Answer: ESP traffic originates but typically does not
terminate through the local dial network. Instead,
calls typically terminate at a host computer that is
linked to Telenet's network by a dedicated line.
That is, almost all of Telenet's dial traffic is
"originating" in nature; however, the FCC determined
in an earlier proceeding that where a call
originates but does not also terminate through the
dial network it will be charged the higher
"terminating" rate at the originating end.
MTS (that is, ordinary long distance voice service)
does indeed pay full freight -- and then some.
MTS/WATS traffic subsidizes local exchange service.
It is payment of this subsidy that the FCC now
proposes to extend to enhanced service providers.
Question: If the proposal is discriminatory because it
earmarks only one class of local exchange users --
ESPs and their users -- who are the local exchange
users that still have an exemption?
Answer: Under the FCC's NPRM, private corporate networks
with interstate leased lines and local dial access
links -- functionally identical to the networks
operated by Telenet and other ESPs -- would be
exempt from paying access charges.
Question: According to FCC Attorney Ruth Milkman, the charges
currently paid by ESPs do not contribute
sufficiently to the cost of the enhanced access
facilities they use in offering services to the
public? Does anyone have any figures to rebutt this
statement?
Answer: The nationwide average cost of a dial access line
has been quoted by Bell officials as $28.00 per
month. Telenet pays an average price of $33.00 per
month for its dial lines (leased under the local
telephone companies' business line tariffs). In
addition, business users often are charged local
message unit rates when they place calls to
Telenet's dial access lines. Thus, we feel we --
and other ESPs -- are currently paying the full cost
of the dial service we use.
Question: Would access charges apply on a local call from
McLean, Virginia to The Source on its local phone
number (not using Telenet)? Would it depend if the
caller accessed out-of-state computers like the
Official Airline Guide?
Answer: The FCC's access charge proposal does not apply to
INTRASTATE traffic, regardless of whether the caller
uses Telenet. That is, a call which originates in
Virginia and terminates on a computer located in
Virginia, such as The Source, would not be subject
to the FCC charge. If the call terminates on a
computer located out-of-state, access charges would
apply.
Question: Would access charges apply on a call to The Source
originating from Thief River Falls, MN? The call
would use AT&T to Fargo, ND (125 miles away, but the
closest Telenet node). Since AT&T already charges
an access fee on this call, would Telenet charge it
again? If Telenet would levy an additional access
fee, would the lower "originating" rate apply (after
all, it's not a one-ended call)?
Answer: Such a call, using AT&T's long distance (MTS)
service to reach Telenet's North Dakota node from
the user's location in Minnesota, would pay access
charges three times. First, it would pay access
charges on both ends of the AT&T connection
("originating" rate in MN and "terminating" rate in
ND). Then when it arrived on Telenet's dial access
line in North Dakota, it would be assessed an access
charge again (at the "terminating" rate, since
Telenet's connection to The Source in Virginia does
not use the dial network). Total access payments on
such a call would be approximately $11.50 per hour!
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