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To: puborectalis who wrote (5796)	2/26/1999 2:13:00 AM
From: Li Cai	Respond to of 41369

Will the following information affect AOL? ------------------------------ WASHINGTON -- The Federal Communications Commission ruled that connecting to the Internet constitutes a long-distance call, not a local one. The decision isn't expected to increase the cost of going online, the FCC said, but it was a victory for the Baby Bells and it could curtail a lucrative source of revenue for some small, independent phone companies. GTE Service Is Ruled Interstate, Suggesting Likely Boon for Bells (Nov. 2, 1998) At issue is about $600 million in fees received by independent phone companies from the Baby Bells in what is called "reciprocal compensation." Many Internet-service providers use alternative local phone companies as their carriers for incoming calls, and under the arrangement, the Baby Bells must pay the independent carriers for routing calls onto the Internet. By classifying Internet dial-ups as interstate or long-distance calls, the FCC has effectively ended the rival carriers' windfall. But it isn't a total victory for the Baby Bells; the FCC said they must honor existing agreements or defer to state regulators. It also proposed that the independent carriers negotiate future payment rates with the Bells, with oversight by state regulators. "We're pretty happy because we want to get paid under existing agreements, and the FCC says existing agreements must still be enforced," said John Windhausen Jr., president of the Association for Local Telecommunications Services, which represents independent phone companies. But Bell executives said the ruling means they no longer owe the rival carriers anything under existing arrangements. The Bells said they will challenge the ruling in court if states don't uphold that view. FCC officials stressed that the reclassification won't result in higher consumer costs, and Chairman Bill Kennard said it shouldn't be construed as an attempt to regulate the Internet. "This won't change how consumers access the Internet or what they pay," said Larry Strickling, the FCC's top telephone regulator. But FCC Commissioner Harold Furchtgott-Roth argued that defining Internet dial-up calls as long distance would make them subject to the same long-distance access charges that are levied on voice calls. And some consumer groups said they are worried that the move could eventually result in higher charges for Internet access. Gene Kimmelman, a co-director of the advocacy group Consumers Union, agreed. "The FCC said [Internet calls] look like and feel like and smell like long-distance calls -- but [said], 'We won't charge based on long-distance calls,' " he said. "I don't think that's sustainable." However, Scott Cleland, managing director of Legg Mason Precursor Group, said that by opening the door to negotiations, the FCC is trying to force the Bells and independent carriers to reduce rates for both Internet and voice calls. "The FCC is trying to drive down prices closer to cost so end users get lower prices," he said. The issue sparked a public spat between Mr. Furchtgott-Roth and Mr. Kennard at Thursday's meeting, when the five-member commission was to vote on the reclassification. Mr. Furchtgott-Roth, who abstained from the vote, charged Mr. Kennard with violating FCC tradition by refusing to honor his request to shelve the item for further consideration. Mr. Kennard responded that "we owe the marketplace a decision" on the long-pending issue.

To: puborectalis who wrote (5796)	2/26/1999 11:44:00 PM
From: Nancy Rain	Read Replies (1) \| Respond to of 41369

AT&T and AOL on Bloomberg quote.bloomberg.com New York, Feb. 26 (Bloomberg) -- AT&T Corp. may be seeking to join with America Online Inc. to increase its presence on the Internet, MPT Review Publisher Louis Navellier said on financial news network CNBC and Business Week magazine reported. AOL is ''how most people get to the Internet,'' and has a high market share of U.S. households, making the company attractive for a joint venture, acquisition or other partnership with AT&T, Navellier said. He told CNBC the most logical candidate to get AOL would be ''a conservative company,'' and AT&T could spin-off some of its operations like it did with Lucent Technologies Inc. to finance the transaction, although Business Week cited unnamed analysts as saying AOL's market capitalization of $83.5 billion could discourage any potential partner. AT&T, the No. 1 U.S. long-distance phone company, and America Online, the No. 1 online service, both declined to comment. (Business Week online 2/26 www.businessweek.com; CNBC 2/26 www.cnbc.com)