IP: Re: All Calls to ISPs Long Distance

[Dave Farber <farber () cis upenn edu>]

> From: "Robert Cannon" <cannon () world oberlin edu>
> To: <farber () cis upenn edu>
>
>
> The California hearing on the issue of reciprocal compensation for dial up
> internet access calls was postponed.  It may be worth noting that
> Massachusetts recently ruled in favor of the Incumbent Local Exchange
> Carrier (ILECs) Bell Atlantic - indicating that the recent FCC Order did in
> fact change things and that reciprocal compensation is no longer due for
> dial up internet calls. The Internet Telecom Project www.cybertelecom.org
> tracks these developments on its reciprocal compensation page
> http://www.cybertelecom.org/rcomp.htm
>
> Mr. Turner notes that 23 states have ruled that calls to ISPs are local.  It
> is important to note that most if not all of these state rulings occurred
> *before* the recent FCC order on reciprocal compensation.  Many ILECs
> immediately went back to the state public utility commissions and filed for
> reconsideration, arguing that the pursuant to the FCC reciprocal
> compensation order, a call to an ISP modem back is interstate and therefore
> reciprocal compensation is no longer due (reciprocal compensation is paid as
> a settlement mechanism when two local telephone companies exchange traffic;
> the originating company pays the terminating company to terminate the call.
> If a CLEC has an ISP as a client, lots of calls terminate at the ISP, the
> money follows the traffic, and the ILEC ends up owing the CLEC a lot of
> money.  The FCC said that the call to the ISP is jurisdictionally
> *interstate* but that reciprocal compensation could still be appropriate
> where agreed to by the parties.).
>
> This issue clearly affects the consumer.  ISP contracts with CLECs can
> account for that reciprocal compensation, providing the ISP with telecom
> services at a discount.  Indeed, many ISPs are now CLECs with this as one
> part of their business plan.  Remove the reciprocal compensation and you
> remove the discount and consumers costs to access the Internet can go up.
> Furthermore, when Massachusetts ruled in favor of Bell Atlantic, as noted
> above, Bell Atlantic turned around and released the following press release:
> Bell Atlantic-Massachusetts Announces Rebates, Rate Reduction Result of
> State Decision to End Unjustified Fees for Internet-Bound Traffic May
> 21,1999.  www.ba.com/nr/1999/May/19990521006.html  Consumers are affected
> but it depends in part on what they are consuming.
>
> My Boardwatch article on the FCC's Reciprocal Compensation order can be
> found at http://boardwatch.internet.com/mag/99/may/bwm64.html
>
> -Robert Cannon
> Views expressed are my own and are not necessarily those of my dog Pancho
> Villa.
>
> > > From: "Turner, Jim" <Jim.Turner () mail house gov>
> > > To: "Farber, Dave" <farber () cis upenn edu>
> > > Subject: All Calls to ISPs Long Distance
> > > Date: Thu, 3 Jun 1999 15:21:41 -0400
> > > X-Mailer: Internet Mail Service (5.5.2539.1)
> > >
> > > Dave,
> > >
> > >      I had the communications legislative assistant for a senior
> California
> > > Congressman look into last week's e-mail about making calls to ISPs long
> > > distance.  Here is her response.
> > >
> > > OK, this is kind of a complicated issue.  It is most definitely a rumor
> with
> > > regard to the FCC and any federal action.  CPUC is having hearings on the
> > > reciprocal compensation issue today, however it's not as clearcut as it
> may
> > > seem.  23 state regulatory commissions have considered the issue, and all
> > > have found that the phone company that originates the ISP call must pay
> > > reciprocal compensation, but many companies are currently withholding
> > > payment while pursuing appeals, hence the PacWest-PacBell battle.
> > >
> > > In February, the FCC issued a Declaratory Ruling concluding that carriers
> > > are bound by their existing interconnnection agreements and are subject to
> > > reciprocal compensation obligations to the extent provided by agreements
> or
> > > determined by state commissions.  So, theoretically, CPUC could alter
> > > PacBell's obligatory compensation.  However, even if they do so, which
> isn't
> > > fair by the way, cosumers will not be affected.
> > >
> > > The rulings have to do with reciprocal compensation only - the FCC has
> ruled
> > > that Internet and other information services are exempt from interstate
> > > access charges.  This means that customers will continue to be able to
> > > access their ISP by dialing a seven digit number and will not incur long
> > > distance charges.  To charge more for Internet access, state commissions
> > > would have to alter their local rate plans - phone companies alone can't
> do
> > > this.  And this is something regulated by states, not by the federal
> > > government.