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Lesson Plans

Re: Tax on Internet access

[ Thread ][ Subject ][ Author ][ Date ]
Lincoln Arts (lincarts)
Sat, 16 Jan 1999 10:43:33 -0800

Thank you for the update. I appreciate your research into the matter.


>this info comes from a more reliable source:
>Subject: The *Real* Scoop | New Internet Fee?
>From: Tim Mclain <TMclain>
>Date: Thu, 14 Jan 1999 08:13:55 -0800
>REPLY to: Wise, Brittley <Brittley.Wise>
>Thank you for contacting our office regarding the rumor that Internet
>services will be charged at long distance rates. We appreciate you writing
>and welcome this opportunity to respond.
>First, I would like to make it clear that there is no plan to charge you
>long distance rates for Internet services. That is a rumor and it is not
>true. I would like to take a minute to explain the source of this
>misunderstanding and why this is suddenly an issue.
>The FCC has a proceeding underway concerning carrier-to-carrier payments,
>so-called "reciprocal compensation." These payments compensate a local
>telephone company for completing a local call that is place by one of its
>competitor's customers.
>For example, if a customer of Phone Company A makes a local call to a
>customer of Phone Company B, Phone Company A must compensate Phone Company B
>for handling the last leg of the call. This payment structure may have been
>negotiated by the two phone companies, or may have been based on a decision
>of the state regulatory authority. The reciprocal compensation payment by
>Company A to Company B may be based on a per-minute charge for the length of
>the call, or some other negotiated basis.
>Reciprocal compensation is thus paid between telephone companies for use of
>the local phone network. Reciprocal compensation is not paid by consumers
>or by Internet service providers. Accordingly, reciprocal compensation does
>not determine consumer Internet charges. Typically, the companies involved
>are an incumbent local telephone company (ILEC) currently serving a large
>number of subscribers, and a competing local telephone company (CLEC) that
>has only recently entered the market and has fewer subscribers.
>This situation began due to the dispute in the telephone industry over
>whether local calls to Internet service providers (ISPs) are subject to
>reciprocal compensation, and that is the matter the FCC is considering. In
>the example above, if the consumer dials up the Internet over the phone
>lines of Phone Company A and the ISP is served by Company B, the question is
>whether Company A must compensate Company B for completing the local portion
>of the call. That is the only issue before the Commission in this matter.
>Thus, the manner in which consumers pay for Internet access is not before
>the Commission and the Commission has repeatedly stated that it is not
>preparing to change the manner in which consumers obtain and pay for
>Internet access. Rumor to the contrary persists, however, this is simply
>not true.
>Furthermore, even if reciprocal compensation does have to be paid for
>Internet traffic phone companies will not be forced to impose a surcharge on
>either Internet customers or on ISPs. While the rates consumers pay for
>local telephone service are regulated by the states, and not the FCC, most
>states require phone companies to charge a flat rate for unlimited local
>usage, thus precluding a surcharge for Internet traffic. Consumers pay for
>these lines just as they would pay for any second phone line. Thus, local
>phone companies that originate Internet traffic are already receiving
>increased compensation as a result of this traffic.
>Nor could a local phone company forced to pay reciprocal compensation
>recover that cost from the ISP. The local phone company that pays
>reciprocal compensation has no relationship with the ISP at all, and thus
>cannot charge the ISP anything.
>I hope this explanation clears up some of the confusion. Please understand
>that in our congressional office the Internet is integral, and we would not
>want to pay extra for that service either. Please feel free to pass on this
>information to people who may have questions regarding this issue. We would
>hate for this rumor to gain any more steam. Again, that you for contacting
>our office, and feel free to contact us if we can be
>of any further assistance.
>Office of Congressman Sanford Bishop