-Caveat Lector-
FCC to Examine Internet Pricing Issues
by Sari Kalin, IDG News Service
(December 30, 1996) -- The U.S. Federal Communications Commission wants to
let Internet service providers off the hook for now. The agency tentatively
recommended that ISPs not pay current interstate access charges to local
telephone exchange carriers.
Despite that position, the FCC opened the door to examining Internet traffic
more carefully in the future. It has issued a notice of inquiry (NOI)
requesting comment on whether it should consider interstate information
services and the Internet separately from access charge reform.
While long-distance companies must pay local exchange carriers a fee for
completing a voice or data call on either end--fees estimated by the FCC to
total $13 billion a year--ISPs have been exempt for more than a decade. Long-
distance companies have long complained that the access charges are far above
costs, while the local exchange carriers have said they need the funds to
subsidize universal phone service. Some local exchange carriers, of late, have
also complained to the FCC that Internet traffic is clogging the public
telephone network.
Given concerns that Internet traffic is taxing the public phone system, the
FCC wants comments on how it can "create incentives for the deployment of
services and facilities to allow more efficient transport of data traffic,"
according to an FCC statement.
The FCC says that Internet issues are beyond the scope of the current
interstate access charge debate. For now, that is a victory for ISPs and
consumers, since the longer that ISPs can go without paying access charges,
the longer consumers can enjoy cheap Internet access, said Neal Friedman, an
attorney specializing in communications and online services at Pepper &
Corazzini in Washington, D.C. But the battle is far from over, he said.
Under last week’s notice of proposed rule making, which opens the debate on
interstate access charges, the FCC said it will look at ways to change rate
levels and structure to bring them more in line, the official said. Rate
structure could be modified by market forces, as competition increases, or by
the FCC, which could spell out a new rate plan if it believes that competition
alone won't be enough.
Comments on the notice of proposed rule making are due Jan. 27, and replies
are due Feb. 13, according to the FCC official. Comments on the notice of
inquiry are due Feb. 21 and replies are due March 24.
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FCC
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