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) --cut-here-- 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! --cut-here--END--cut-here--