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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony -- Ignore unavailable to you. Want to Upgrade?

To: wonk who wrote (1687)	10/23/1998 1:44:00 PM
From: Frank A. Coluccio	Respond to of 3178

ww, I know what reciprocal comp is, thank you. What is less clear is the abstractness of principle I find in applying my understanding to an entity who qualifies as both a CLEC and an ISP, especially when the boundaries between ILECs and CLECs are blurring. And then there are the larger issues, such as, if this takes off, what does it portend for the model being used to determine divisions of revenues in the larger carrier industry context, and it's ultimate impact on universal service and modifications to same? I'm not necessarily opposed to making changes in these areas, but in order to formulate an opinion, I must first understand what the rationales are to those proposed changes, and then examine their impacts. I ain't there yet. Later, Frank

To: wonk who wrote (1687)	10/24/1998 10:13:00 PM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 3178

Hi, wireless... I just reread my opening sentence in my preceding post to you, and I could have phrased it much better that I did, sorry 'bout that. ----- I just finished reading Ken's post re the meeting of the big wigs last week, and I clipped the following as a prop to demonstrate my initial causes for being somewhat startled, concerning the dual path to victory by ICG (reciprocal charges AND exemption to access charges). >>>Messrs. Bryan [ICG] and Evslin [ITXC] and panel participant Lee McKnight, a professor at Tufts University's school of law and diplomacy, agreed that IP telephony could strain the access charge system and, with it, universal service support mechanisms. BellSouth Corp.'s move to begin collecting access charges from IP telephony providers was effective in bringing the issue to the forefront, Mr. McKnight said. "This is really a shot across the bow to put pressure on the FCC and state regulators," he said, predicting the matter soon would be in the courts.... Nevertheless, regulators are afraid to take action because they know IP telephony can move into the mainstream, and they don't want to prevent that by prematurely regulating what still is a relatively small pot of money, said Mr. McKnight.... "This is an issue that's not going to go away quickly," ICG's Mr. Bryan said. "This reflects the fear that the Bell operating companies have, correctly, that this is the start of the end of their business." He said IP telephony might be the "tool that brings down access charges," an FCC goal when it issued its access charge reform order last year. He stated, "There is only one concern, and that concern is Farmer Brown: universal service." <<< ----end clip There are a lot of things going on here. While Mr. Bryan concedes that Farmer Brown may be left out in left field without a line to phone 911 with, I don't see him coming up with any viable alternatives, and that's where his company's argument falls short. Evslin, on the other hand, comes to a side bar agreement with Bell Atlantic on a separate kind of access charge (colocation charge melded with a termination charge.... what's that all about? isn't that the same as an access, origination & termination charge?)... and then Evslin goes on to boast [ in another post printed here] about how every ITSP should do what he's done. Go figure. Telco rates are weighted, partially keyed to itemized costs per actual unit sold, and partially keyed to overall operating company costs... including the costs for delivering services to users who are not in optimal [read: very remote] locations. In short, there is price averaging still going on that makes it possible to sustain support for remote users for basic services at a pricing tier close to, or identical to, urban users. Once you start to tamper with the funds (universal service funds included here, lopped onto the access charge reserves) that the ILECs have at their disposal, I think that there had better be an alternative in place to take up the slac, or else I think that we can expect to see some serious repercussions and adverse effects extended to many outlying residential and business users, including those who can least afford it. Even if these repercussions are the result of the ILEC wanting to make a point, they'll exist just the same. At the very least, some other form of subsidy will need to be instituted to satisfy a whole lot of users' needs, and I haven't heard anything yet that spells out just how that will be done, short of some suggestions that smack of a total switch to socialized services. < Yecht! > This would impact everyone, because one of the most important attributes of the PSTN as we know it today is universal reach. VoIP, itself, depends on the reach of local copper to the greater extent, so even VoIP wont come to the rescue if funding is removed from the ILECs. Wish I had a few contiguous weeks or months to sort this out, but I don't ;-) Later, Frank C.

To: wonk who wrote (1687)	10/28/1998 7:45:00 PM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 3178

Wonk, and All, here's some more on the ILEC-CLEC-Internet-call Recip story, a new twist here... ...(as I struggle going through my old 008's and current GR 303 questions for Hal. What an education I'm re-getting here Hal, Thanks! [g]) : [[Borrowed from the RCN thread,]] RESEARCH ALERT- CLECs may face compensation change October 28, 1998 12:29 AM NEW YORK, Oct 27 (Reuters) - Upstart local phone companies called competitive local exchange carriers may face the reduction or elimination of certain fees they receive to connect telephone calls to Internet service providers, analysts and industry sources said Tuesday. -- If the fees are changed, certain small phone companies that rely on those fees for a significant revenue source could be hurt, Merrill Lynch said Tuesday. -- The Baby Bells contend they should not have to pay fees to the upstart local phone companies that connect calls to Internet service providers. The Baby Bells contend that calls bound for the Internet are interstate or global in nature instead of merely local phone calls. -- The regional Bell companies are expected to pay an estimated $600 million to the competitive local exchange carriers (CLEC) in 1998 to connect those calls, Merrill Lynch telecommunucations analysts said Tuesday in a conference call. The CLEC group included in that estimate includes the independent upstarts, as well as units of long distance giants MCI WorldCom Inc.WCOM and AT&T Corp.T , Merrill Lynch said. -- If the rules remain unchanged, those fees could swell to $1 billion in 1999 and to $2 billion in the year 2000, Merrill Lynch said. -- Merrill Lynch estimated those fees, after taxes, would dampen Baby Bell earnings by about two percent in 1998, three percent in 1999 and five percent in the year 2000. -- The Federal Communications Commission may decide as soon as Friday that the telephone calls to connect commputers to the Internet are more like long distance calls than local calls and therefore subject to the agency's jurisdiction, industry source said. -- The FCC may decide to keep in place the fees, called reciprocal compensation, until the contracts between the Baby Bells and the upstart companies expire next year. At that time, the fees could be reduced or elimated, analysts and industry sources said. -- Industry and agency officials said the FCC's plans were still in flux on Tuesday, but the broad outlines of a decision had formed. -- competitive local exchange companies such as US LEC Corp. CLEC , Hyperion Telecommunications Inc. HYPT and Electric Lightwave Inc. ELIX appear to have the most exposure to changes in the reciprocal compensation rules, Merrill Lynch said. -- companies such as USN Communications Inc. USNC , Teligent Inc. TGNT , NEXTLINK Communications Inc. NXLK , GST Telecommunications Inc. GSTX and RCN Corp. RCNC appear to have the least amount of exposure out of the CLEC group, Merrill Lynch said. -- Merrill Lynch said it expects the issue remain clouded for months and may drag on in court battles. (( Jessica Hall, New York newsroom 212-859-1729)) REUTERS