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--- Begin Message --- -Caveat Lector-
[Colleen is a veteran telecom lawyer in DC. --Declan]
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Subject: FC: Replies to reporter about Earthlink levying additional fees Date: Thu, 5 Jun 2003 12:25:12 -0400 From: "Boothby, Colleen" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]>
One of the responses mentioned the FCC's universal service fund ("USF"). The FCC does not require ISPs to pay a USF charge, for now. ISPs, like any other end user of telecom services, may nevertheless end up paying a USF charge when they buy telecom services because telecom companies choose to pass through to end users, including ISPs, the USF "contribution" that the telecom company must pay.
But local telephone companies are currently pushing the FCC to expand the list of companies who must contribute and add ISPs. That means a new federal regulatory fee could be imposed on ISPs. Right now, only providers of interstate "telecommunications" -- meaning plain vanilla transmission services like voice lines, T1s, DS3s, DSL without the Internet access, etc. -- have to pay into the federal Universal Service Fund. The FCC currently collects a little over $6 billion (that would be a "b") PER YEAR for the USF and the amount goes up every year. The bulk of the money is handed out to local phone companies who claim that their costs are above average. Local phone companies are pushing for new rules that would require ISPs to "contribute" directly to the fund, in addition to the local and long distance phone companies who already pay. And if ISPs have to pay, they will most likely try to pass their "contribution" on to their customers. They wouldn't HAVE to, because no regulator dictates how these things are passed through; they aren't sales taxes. But that hasn't stopped long distance companies from routinely passing through their USF "contribution" as a separate line item on customer bills, e.g., the "Universal Connectivity Charge" on AT&T bills. (Funny how they never pass through regulatory reductions but that's a different problem.)
This fund isn't small change -- the current charge that telecom providers must "contribute" is 9.1% of their interstate retail revenues, up from 3.9% only five years ago when the program started.
The FCC has asked for public comment on whether ISPs should pay the USF in its proceeding to de-regulate the Bell companies' broadband Internet access services.
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