In response to my recent forwarded posting on the FCC, I received this
clarification from Howard Green. Thanks, Howard.  It is good to know that one
unhappy proposal is dead, but not good that another unhappy IT proposal lives
on . . .

Mary Krugman
______________________________-

In a message dated 1/12/98 2:50:19 PM EST, [log in to unmask]
writes:

Mary,

The FCC modem tax proposal is by now an "urban legend." It came up almost
two years ago, and the FCC rejected it resoundingly more than a year ago.
If you want to know more about it, you can go to a website
<http://www.tourbus.com/>. Look for the February, 16, 1996 issue of
"Tourbus." It talks about the modem tax proposal.

Howard
______________________________
Date:   1/13/98 11:30:30 AM EST
From:   [log in to unmask] (Howard Green)
To:     [log in to unmask]

Mary,
This also comes from "Tourbus." It clears the matter up, it seems to me.

Howard
--------
Yesterday I told you about an urban legend that is floating around the Net
that warns you that

     Many local telephone companies have filed a proposal with the FCC
     [The United States' Federal Communications Commission] to impose
     per minute charges for Internet service.  They contend that use
     of Internet has or will hinder the operation of the telephone
     network.

For the record, this story _was_ true a year ago, but on May 7, 1997, the
FCC rejected the proposal and decided to leave the existing rate structure
in place.  According to the FCC,

     There is no open comment period in this proceeding. If you have
     recently seen a message on the Internet stating that in response
     to a request from local telephone companies, the FCC is
     requesting comments to <[log in to unmask]> by February 1998, be aware
     that this information is inaccurate.

     [Quoted from http://www.fcc.gov/Bureaus/Common_Carrier/
     Factsheets/ispfact.html]

Now for the confusing part.  The FCC _IS_ currently requesting comments on
an unrelated, although somewhat similar, issue.  According to a recent
article at CNET's news.com,

     Until January 20, the FCC is collecting public and industry
     comments regarding, among other things, whether ISPs should be
     reclassified as "telecommunications services." If the telcos
     prevail, ISPs will be reclassified, and could as a result have to
     pay the switch fee already paid by long distance providers.

     The FCC also is reconsidering which types of companies should
     have to contribute to universal service. ISPs may be designated
     as services that should contribute. Either way, ISPs, no doubt,
     would pass the fees on to their customers.

     [Quoted from http://news.com/News/Item/0,4,17860,00.html]

Let's see if I can explain all of this a little further.  Currently, local
telephone companies in the United States charge long-distance carriers
(like AT&T and MCI) a switching fee for the long-distance traffic that
travels over their local lines.  If the FCC decides to reclassify Internet
Service Providers as "telecommuications services," your local telephone
company would then be free to extend these same switching fees to the the
high-speed lines that your local Internet Service Provider uses to access
the Internet.

Also, ISPs are currently exempt from having to pay into the "universal
access fund," a federally-mandated fund that helps subsidize rural
telephone service and Internet access for libraries and schools.  The FCC
is currently reevaluating this exemption.

It is important to note that the FCC has not made any decision on either of
these two issues.  They are simply seeking the public's comments.  So you
can probably ignore the breathless rhetoric that has been floating around
the Net recently, such as

     THE PHONE COMPANIES ARE HOPING YOU DON'T GET INVOLVED, THE LESS
     OPPOSITION TO THIS BILL THEY ARE TRYING TO PASS, THE QUICKER IT
     PASSES, AND THE QUICKER THEY REACH INTO YOUR POCKET.

     The goal of this is to put regular ISP's out of business so they
     can own the internet market.  YOU MUST WRITE, PETITION, FIGHT AND
     DO WHATEVER IT TAKES IF YOU WANT THIS TO GO AWAY PERMANENTLY.

In fact, the local telephone companies don't have much to do with FCC's
current request for comments.  The United States Congress told the FCC to
reevaluate the universal access fund, and that is what opened this whole
can of worms.

Still, if you are in the United States and would like to comment on these
issues [should ISPs be reclassified as telecommunications services and
should ISPs be required to pay into the universal service fund?], feel free
to exercise your fingers and pop off an e-mail letter to our friends at the
FCC.  Comments in response to the public notice are due January 20, 1998,
and should be sent to <[log in to unmask]>.

So, in summary, there are two stories about the FCC floating around the Net
right now.  The first story [that your local telephone company has filed a
proposal with the FCC to change the rate structure to impose per minute
charges for Internet service] is simply no longer true.  The proposal was
presented to the FCC in the Fall of 1996, and the FCC rejected the proposal
on May 7, 1997.

The second story [that the amount of money that you are going to have to
pay your ISP is going to go up unless we stop the evil local telephone
companies] is sort of true, but greatly exaggerated.  In fact, the FCC is
just seeking the public's comments on two questions:

     1. Should ISPs be reclassified as telecommunications services?

     2. Should ISPs be required to pay into the universal service
        fund?

Of course, the real fear is that if the FCC answers "yes" to either of
these two questions, folks in the United States might end up paying more
each month for their Internet accounts.