fbaube@NOTE.NSF.GOV (Fred Baube) (11/04/87)
"Computer Networks Threatened:
FCC Wants Users to Pay Phone Fees"
John Burgess, Washington Post Staff Writer
Sunday 18 Oct 1987, p.H-1 (better late than never)
Excerpted without permission
[Some introductory material]
[..]
In the 1980's, the computer networks have burgeoned into
a $4 billion-a-year industry, nourished by a special exemption on
interstate phone fees that the [FCC] granted in 1983 to promote
such growth.
Now the FCC has proposed taking back that break, and the
industry is livid .. FCC staff members call the outpouring the
biggest in memory on an agency issue.
The FCC says its proposal would bring the charges for
computer network users in line with what ordinary telephone
subscribers pay for access to long-distance lines. The FCC says
its plan is a matter of simple fairness.
[..]
In 1980 there were about 400 commercial data bases in the
world, according to Tymnet, a major link-up service operated by
McDonnell Douglas Network Systems Co. By 1986, there were 2901
world-wide ..
This type of service is considered key to the
"information age" .. access to just about any information
anywhere in the country and, theoretically, in the world. But to
be universal, it must be affordable.
And that is why the FCC decided in 1983 to exempt network
operators from "access charges" assessed on long-distance
telephone companies ..
The exemption has helped keep computer network rates
low. [Tymnet ranges from $1/hour to $11/hour.] Typically, users
also pay a fee per character transmitted and, if it is commer-
cially operated, a fee to the data base they are using.
The FCC maintains that operators and users have known all
along [it] was temporary .. The exemption amounts to a subsidy,
says FCC CHairman Dennis Patrick, and in the long term, he
argues, subsidies discourage development of efficient and healthy
industries ..
Sending information by voice or computer across state
lines is essentially the same thing, .. proponents contend ..
The industry, meanwhile, says it will simply pass the new
charges on to the user. By most estimates, that would mean a
markup of hourly rates [of] more than $4.
In its counteroffensive against the FCC, the industry has
found plentry of hard-luck cases .. who use the systems mostly in
off-peak times and would possibly be forced into electronic
silence.
There are doctoral students and medical researchers.
There is a blind user in Independence, Mo., who distributes music
he composed and fiction he wrote through the networks. There is
a deaf and dumb veteran in Miami who says he enjoys communicating
with people through the networks.
Dr. Robert Fusco [of] Sewickley, Pa., uses computer
networking to get abstracts of medical literature and for help in
diagnosing specific cases. One service newly offered by the
[AMA], for instance, asks a doctor for specifics of a patient's
physical characteristics, test results, and symptoms and then
offers possible diagnoses.
Fusco says the computer helps make him equal in resources
to his colleagues in big cities. "I have the same information
they have if I can tap into the data base, without actually being
in a medical center. That's the beauty of it."
But he says he fears rising costs. "If you add $5 an
hour to it, the hospital is going to say, `well, that's a little
expensive.'"
Small companies .. One case in point is the Pig Improve-
ment Co., a Kentucky firm [that breeds pigs and sells] them to
farmers. Its salespeople use Tymnet to communicate with the home
office; the company also offers an after-sales service by which
about 250 customers log into a company-maintained data base to
get information on caring for the animals.
Tymnet has told the company that under the new rates, its
bills would rise by about $1000 a month .. "so obviously we would
have to start charging" .. [or perhaps use] the old way, by
voice, through a toll-free 800 number.
But most users are large corporations. Tymnet, for
instance, estimates that only about one-fifth of its users are
individual or residential users tapping into consumer-oriented
data bases. And about two-thirds of its customers pay more than
$2000 a month for Tymnet services.
[A] customer, Westinghouse Electric Corp., whose
employees generate about 450,000 computer messages per month,
would [see its bills rise about $1 million a year].
The industry also argues the fees would create new
incentives for companies with big-volume flows to single
destinations to establish private phone networks. The FCC is
generally opposed to such private lines, on the grounds that
[BOC's] need a maximum number of customers to prosper and further
the goal of "universal service".
{PVN = Private Virtual Network; see, for example,
"Tariff Policy and ISDN", David Rogerson,
_Telecommunications_, Oct 1987, p.87 -- fb}
Overall, the industry says that the rates would be a
supreme case of short-sightedness ..
Network operators say that other fees assessed on them
assure that they're paying their fair share. And they contend
that the additional money the FCC proposal would extract is
simply too small in comparison to what long-distance companies
already pay to bring down long-distance rates in any meaningful
way .. [Telenet estimates less than 1%].
The industry is trying to use its technology to fight the
FCC's plan.
[Compuserve has added menu item 9, "FCC Proposal
Information", and 10, "Send an FCC Congressgram".]
By other commands, users can get a sample protest letter
.. and addresses of members of Congress and commission members ..
[Compuserve will print and mail a letter for 50 cents.]
As a special break, the on-line time they spend writing
the letter is free. Already about 5000 letters have been
generated this way.
"We've never really used the service in an advocacy type
role before," said Compuserve spokesman David Kishler. It is now
considering including a permanent data base for letters to
Congress on any subject, he said. {it's about time!}
FCC Chairman Patrick said he expected protests but has
been surprised by their strength.
No decision has been reached on whether to go ahead with
the proposal, he said. Some commission staff members, however,
speculate it will be modified to allow for a phased-in implemen-
tation, or may even be dumped altogether. When the decision will
come is unclear. The original Jan.1, 1988, implementation date
is not considered feasible.