Closer to home, will the FCC and "big government" cause increased prices for internet access?...................
news.com
FCC responds to fears of ISP fees
By Courtney Macavinta
NEWS.COM
January 9, 1998, 4:10 p.m. PT
URL: news.com
The Federal Communications Commission today is clarifying the issues behind a pending report to
Congress that some fear could result in new fees for Internet service providers.
Federal lawmakers have mandated that the FCC review rules it released in May that restructured
the nation's "universal service fund," which traditionally subsidized phone service for rural and
low-income residents but was revised to include up to $2.25 billion in annual funding for hooking
public schools and libraries up to the Net.
Congress ordered the FCC report in part to address whether Net service providers should have to
contribute to the universal service fund. They don't now because they are considered "enhanced
service providers."
If the FCC were to recommend to Congress that ISPs be reclassified as "telecommunications
services," online access providers could have to pay into the fund, but only after a lengthy
rule-making process. This would be good news for telcos, which pay a big portion of the universal
service fund now and have lobbied to the FCC in the past to collect other additional fees from ISPs
to offset various costs.
The FCC is accepting public comment on the universal service issue until January 20, and will report
to Congress in April. This has caused anxiety and confusion for Net users because in a separate
incident, an "erroneous" email has been circulating online stating that the FCC is accepting public
comment until February on whether a per-minute access charge should be imposed by phone
carriers on Net service providers, which is not true, an FCC spokeswoman said today.
Still, concern is still mounting in the online industry over how the universal service funding would be
collected from ISPs if they were required to contribute. Some worry the collection vehicle would
turn out to be a telco access charge that would likely be passed on to ISP customers. Any potential
universal service charge is unrelated to the permanent access fee proposed last year and referred to
in the erroneous email.
"Such a fee will put a lot of non-telephone company ISPs out of business. People who have to pay
the telephone companies a fee for every minute they spend online will not stay online as long," said
Dave McClure, executive director of the Association of Online Professionals, which fought the
access fees last year. "The effect will slow the growth of the Internet."
In the past, such access charges were funneled into universal services. But FCC officials said today
that it is far too soon to say whether ISPs will ever be classified as telcos, and subsequently have to
pay into the fund through an access charge or any other mechanism.
According to its January 5 public notice, the FCC report will clarify its definitions of "information
service," "local exchange carrier," and "telecommunications service," and "the impact of the
interpretation of those definitions on the provision of universal service to consumers in all areas of the
nation."
In addition, the agency will review "the application of those definitions to mixed or hybrid services
and the impact of such application on universal service, and the consistency of the Commission's
application of those definitions, including with respect to Internet access for educational providers,
libraries, and rural health care providers under the Act."
Despite the email notice that has been circulating on the Net, the agency also confirmed that it has
not reopened a public comment period on whether phone carriers should be allowed to charge the
permanent ISP access fee. The email began circulating a few days before the universal service public
inquiry notice was released, according to the FCC.
"The email circulating that says the FCC is asking for comment by February 13, 1998, on the issue
of whether the ISPs should have to pay access charges to local phone carriers is an erroneous
email," an FCC spokeswoman said today. "In its access reform order in May of 1997, the FCC
decided not to allow local telephone companies to impose permanent access charges on ISPs. The
FCC is no longer asking for comment in this proceeding."
Still, Congress's mandate for a review of the FCC's implementation of universal service is yet
another example of certain members' dissatisfaction with how the Telecommunications Act has been
carried out by the commission--especially issues concerning ISPs.
For example, the confirmation of William Kennard as the FCC's new chairman also was held up
until two senators were satisfied that the commission would review universal service. Sen. Conrad
Burns (R-Montana) argued that states were footing a larger portion of the universal access bill than
the federal government.
Sen. Ted Stevens (R-Alaska) pushed through the FCC universal service review as part of a huge
appropriations bill for 1998. He forced the issues of whether telcos should have to pay for
subsidized access if ISPs aren't contributing.
Some members of the online industry say the telephone companies may have a point, but they
contend a solution that could increase the cost of Net access is not the best answer.
"The telephone companies rightfully feel that they shouldn't be the only ones paying into telephone
universal service if those fees are going to go to Internet service," McClure said.
"From a global perspective, the real question is whether universal funds are the best vehicle to make
sure schools get wired to the Net when the industry is already helping to do this privately," he said.
"If it means that a permanent Net access fee will be implemented, it might not be the most equitable
way."
The cost of Net access is expected to increase for many users. According to the FCC rules, by the
end of this year, businesses will pay $2 per month more for each additional phone line. The cost
could be as high, however, as $4.21 per additional line by the beginning of next year, because long
distance providers will be charged $2.20 for each added line, a fee they could pass on to customers. |
