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Internet Access Charges Return to
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Time-Based "Access"
Charges on Internet Use The growth of the Internet has also spawned great competition between internet service providers (ISPs). This competition has been greatly beneficial to the public - lowering rates for access to what many hope will one day become the primary source of news and information for the American people. Not surprisingly, the local telephone companies have sought to obtain access to this important revenue source. Some have become ISPs themselves and some have now begun to insist that competitive Internet service providers should pay time-based, "access" charges for using the local phone networks. Long distance telephone companies pay such charges, sometimes as much as five to six cents for each minute of a call, but the FCC exempts ISPs from similar treatment. In March, 1997, the FCC commenced a proceeding which will determine whether the Internet will reach its full potential. At the behest of some local phone companies, the FCC agreed to consider whether ISPs should pay access charges. These companies claimed that growing Internet traffic was harming the reliability of their networks, and that the new fees were necessary to defray their costs and to bring Internet use down to reasonable levels. MAP believes that the dangers of permitting the local phone companies to set access charges arbitrarily for ISPs are readily apparent. Unlike the far richer long distance companies, ISPs cannot afford to pay five or six cents a minute for Internet use - those costs would be passed on to members of the public. The resulting steep rise in fees would certainly diminish Internet use by current users, and discourage new users from starting. On the other hand, there may be good reasons to require ISPs to pay some small, reasonable charge based on the actual cost of providing access to the local phone network. Some parties argued to the FCC that this charge could help pay for a new data network that would obviate the need for ISPs to use the voice network at all. In spring, the FCC began a public inquiry to determine how to promote the development of alternative, higher bandwidth Internet connectivity. The inquiry also questioned whether imposing time-based charges on Internet users is necessary to encourage this development or to relieve the pressure on the voice network. In response, MAP and the Center for Democracy and Technology formed the Internet User Coalition (IUC), a group comprised of over 17 consumer, education, civil liberties and minority organizations whose members use the Internet. The IUC helped to ensure that the needs and interest of users were represented in the debate. MAP and CDT prepared Comments and Reply Comments for the IUC, encouraging the Commission to realize that the debate is about much more than setting rates, but rather involves access issues that go to the heart of online speech, commerce, and democracy. IUC Membership:
The FCC's Access Charge Order The changes are summarized below, but overall, they represent a net win for 'Net users.
Therefore, the winners will be residential phone users and small businesses, especially those that have larger long distance bills. Residential users with second lines may or may not face higher bills, depending on their level of long distance use. Most importantly, Internet users have dodged the bullet of time-based charges - for now. The issue could arise again, as part of the FCC's inquiry into promotiong higher bandwidth connectivity. The local phone companies may also petition for time-based fees with state regulators. The IUC will continue to stay vigilant to protect users' interests in these and other FCC issues. Additional resources on ISP access charges: The FCC's First Report & Order on Access Charge Reform (errata and press releases are also available), and the closely-associated Price Caps Fourth Report and Order. Reply Comments of the Internet User Coalition on the Commission's Notice of Inquiry. (Summary of these Reply Comments) Comments of the Internet User Coalition, on the Commission's Notice of Inquiry. (Summary of these Comments) Reply Comments on "notice of proposed rulemaking." Initial Comments on access charges "notice of proposed rulemaking" for users of local phone networks, filed by MAP, CDT, Benton Foundation, Electronic Frontier Foundation, and Voters Telecommunications Watch. MAP has prepared a more detailed briefing on access charges. The FCC's public notice on access charges for users of local phone networks, which includes the notice of inquiry on ISP access charges. (also in WordPerfect format) |
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