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Technology Stocks : FCC Regulations -- Ignore unavailable to you. Want to Upgrade?

To: Francis Gaskins who wrote (5)	4/10/1998 8:59:00 PM
From: Francis Gaskins	Read Replies (2) \| Respond to of 54

"FCC report keeps Internet mostly free of charges" [FG's comment, very misleading headline, probably written by Bell monopolists. The next FCC headline may be "We're doing it for your own good."] WASHINGTON, April 10 (Reuters) - A government report issued Friday on who should subsidize telephone service for the poor and remote areas has largely spared the Internet from charges. The Federal Communications Commission report to Congress steered a middle ground between lawmakers seeking to enhance the current subsidies and those opposed to any FCC regulation of the Internet. FCC said services that allowed customers to make calls over the Internet using a regular telephone handset appeared to fall under the definition of telecommunications services that should contribute to universal service charges. But the agency stopped short of decision saying it wanted to see more information on individual Internet telephone offerings. ''If it looks like a duck and quacks like a duck you have to call it a duck,'' said FCC Chairman William Kennard in a telephone interview. If charges are eventually levied, it would be a blow to firms like Qwest Communications International Inc. (QWST - news) and IDT Corp. (IDTC - news), which want to offer Internet long-distance service at rates as low as 5 cents per minute. AT&T Corp.(T - news) has also announced plans to offer a similar service. FCC also said lines leased to Internet service providers fell under the definition of telecommunications and this source of subsidy money would grow as providers needs grew. The 1996 Telecommunications Act required the FCC to make explicit the subsidies paid mostly by long-distance and business customers. As part of implement the act, the FCC last May reduced per-minute access charges on long-distance calls but created new per-line charges to support universal service. At that time the FCC continued its previous policy of exempting Internet service providers from access charges, since the 1996 law distinguished between telecommunications providers and information service providers. This exemption worried lawmakers from states highly dependent on universal service subsidies who feared that the system would be undermined as the market share of Internet long-distance telephone companies grows. Led by Senate Appropriations Committee Chairman Ted Stevens, an Alaska Republican, the lawmakers had demanded the report issued Friday. The bulk of universal service subsidies have been the traditional responsibility of the relevant state with federal funds making up 25 percent. The FCC report said that in some circumstances, if a state had worked to reform own subsidy system and come up short, then the federal contribution could increase. ''These questions don't lend themselves to easy yes or no answers,'' Kennard said of the whole universal service issue. He also noted that the FCC still had a lot of subsidy reform left to do under the 1996 act. ''This report is not an open and shut case. It's the beginning of a process in the answering of these questions.'' Part of the law established new subsidies for Internet connections at schools and public libraries. Friday's report said those subsidies could be used to obtain networking equipment in addition to telephone connections. The FCC's access charge reform has been attacked from all sides. Regional telephone companies challenged the plan in the 8th U.S. Circuit Court of Appeals, which earlier struck down FCC pricing regulations arising out of the Telecommunications Act. The court is expected to issue a decision any time.