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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (9435)	4/8/1998 11:16:00 PM
From: Mick Mørmøny	Read Replies (2) \| Respond to of 13594

Barry, not exactly a speech, but a news item maybe related to what Ms. Leeza Rodriguez posted. Beni Technology News Wed, 8 Apr 1998, 8:08pm EDT BN 4/8 Taxes May Stifle Internet Telecom Services, Analysts Say Taxes May Stifle Internet Telecom Services, Analysts Say San Diego, April 8 (Bloomberg) -- The prospects of companies planning to offer low-cost telecommunication services over the Internet will be threatened if the U.S. government begins taxing those services, analysts and telecom industry officials said. Unlike long-distance carriers like AT&T Corp. and Sprint Communications Corp., Internet service providers don't pay access fees to the Baby Bells and other local phone companies, where all calls made on the public phone network begin and end. As the amount of Internet data traffic carried on their networks explodes, though, both the Baby Bells and the long- distance companies have called for ISPs to begin paying the fees. The federal government, which created the ISP exemption in the early 1980s to stimulate Internet growth, is now considering a change in policy. Critics say that is a bad idea. ''It would be devastating to this nascent industry,'' said John Coons, an analyst with Gartner Group Inc.'s Dataquest unit. Although Internet traffic has been rising by more than 100 percent annually in recent years and now surpasses the amount of voice traffic for many carriers, most ISPs still don't turn a profit, Coons said at the Gartner Group Predicts conference in San Diego, which runs this week. The ISPs have remained in the red because of expensive equipment costs required to handle calls and intense competition, which has kept Internet access fees as low as $19 per month for most basic services. That may be about to change as new gear from computer networking companies such as Cisco Systems Inc. and telecom equipment makers like Northern Telecom Ltd. allow voice, video and data services to be sent over a single network. The key to a solution will be finding a way for the telecom providers to get revenue from data traffic the way they do for voice services, said Northern Telecom's Chief Executive John Roth. ''People who are provisioning Internet traffic aren't making any money off it,'' Roth said. --John Shinal in San Diego, through the San Francisco newsroom (415) 912-2995/pkc

To: yard_man who wrote (9435)	4/9/1998 1:43:00 PM
From: Leeza Rodriguez	Read Replies (1) \| Respond to of 13594

The two most recent speeches by Commissioner Susan Ness are indeed available at the FCC web site. The main issue is that the ISP's have been classified under the jurisdiction of 'enhanced service providers' for many years. This allows them ALL of the privileges of the PSTN (public switched telephone network) with NONE of the obligations that telecommunication carriers have. For example, carriers have to deal with local access fees (payment to the RBOC's for use of the switching facilities) AND have to contribute to the Universal Service Fund. ISP's have NO obligation to do either one of these. On top of all this you have the absolute wild west category of IP telephony. Then you have all kinds of reciprocal compensation arbitrage situations going on with CLEC's and ISPs against the ILEC's. And believe me, this IS going on. I attended an ISP conference two weeks that gave a COURSE instructing ISP's on HOW to arbitrage. Can you say out of control? In short, it's totally zoo-y out there and a little bit of wrist slapping might be totally in order . (No threats please!) I have been following these issues for a couple of years now and I think that the FCC is very aware how potentially disastrous it would be to introduce heavy regulation into the Internet. On the other hand, the situation is getting a bit out of control and ISP's _DO_ use the switching facilities . With data traffic growing MUCH faster than voice, it is time to make the ISP's take on some responsibility. I honestly believe that the FCC is trying to be fair and I do think that they are listening to all sides of the equation. The danger of course is that Regulation of the Internet has the potential to kill this bullmarket if you agree that the future productivity gains of corporate america are based on efficiencies gained via IP . Realize also that there is an incredible lobby on both sides of the fence. The camps have been well established for a few years are are known as the Internet Access Coalition vs. the Telco Camp. My GUESS it that the first report will propose to NOT levy local access fees on ISP's, but that it WILL mandate ISP's to contribute to the USF. Also, I would not be surprised to see some incentive offered to encourage advanced local loop technologies like xDSL. Stay tuned. And you can be sure that the market will have a reaction, one way or the other. Leeza Rodriguez