IP: Re: STOP THE FCC LINE CHARGE INCREASE JULY 1st, 2001, NNI Asks the FCC

[David Farber <dave () farber net>]

> Date: Sun, 01 Jul 2001 19:05:10 -0400
> To: farber () cis upenn edu
> From: David Chessler <chessler () usa net>
> Subject: Re: IP: STOP THE FCC LINE CHARGE INCREASE JULY 1st, 2001, NNI
>   Asks the FCC
> Cc: Bruce Kushnick <bruce () NEWNETWORKS COM>
>
> What's the point of this press release? If "New Networks Institute," 
> whoever they are, really wanted to accomplish anything they should have 
> been petitioning the FCC (or the Congress, which has been, for years, 
> limiting FCC attempts to raise the subscriber line charge) months ago, 
> when something could have been done.
>
> Now the FCC has an NPRM out to institute "bill-and-keep" on a national 
> basis, and apparently for IXCs. (CC Docket No. 01-92; 
> http://www.fcc.gov/Bureaus/Common_Carrier/Notices/2001/fcc01145.doc ) From 
> the discussion in the NPRM, the FCC apparently expects to do this by 
> dropping terminating access charges. Thus, if there is over-earning, as 
> the press release alleges (and as appears to be the case from the FCC's 
> "Trends" and "Statistics of Common Carriers" Reports), the FCC may be on 
> the way toward solving it by reducing the per-minute toll revenue charged 
> interexchange carriers. (As early as 1987 I argued, at a regulatory 
> conference at the U of Missouri, that this was the FCC's strategy: to 
> de-load toll costs [and, hence, charges] and increase local costs [and, 
> hence, charges], thereby showing the "success" of the FCC's "competitive" 
> strategy because toll rates would be falling substantially; the increase 
> in local rates could be blamed on the state commissions.) It also 
> corresponds to the FCC's policy of putting the "non-usage-sensitive" costs 
> on the end-user consumers, and of not considering plans that might place 
> such costs on the interexchange carriers in anything other than per-minute 
> charges (in 1987 the FCC specifically rejected several access charge plans 
> that would have accomplished this: the FCC's apparent preference for 
> recovering non-usage-sensitive costs in flat charges for the end-user 
> customers of the LECs, and measured charges for the IXC customers has 
> always been puzzling to me on purely economic grounds).
>
> Anyhow, there's a lot more going on than the press release indicates that 
> the "New Networks Institute" understands. Moreover, the press release 
> shows very limited understanding of the regulatory process, petitioning 
> for a change in policy on the last business day before it is to take 
> effect. Where was NNI when the policy was adopted? What kept NNI from 
> petitioning months ago, when the FCC would have had time to respond to its 
> petition?
>
>
>
> At 06:42 AM 7/1/2001, David Farber wrote:
>
> > > From: Bruce Kushnick <bruce () NEWNETWORKS COM>
> > > To: CYBERTELECOM-L () LISTSERV AOL COM
> > >
> > > NEW NETWORKS INSTITUTE
> > > Contact: Bruce Kushnick
> > >
> > > 212-777-5418, News () newnetworks com
> > >
> > > To Read the Complaint:
> > >
> > > TO BE RELEASED, Friday, June 29th, 2001
> > >
> > > DO NOT RAISE CUSTOMER PHONE RATES JULY 1ST, 2001, NNI ASKS FCC --- STOP 
> > > THE PHONEBILL SHELL GAME.
> > >
> > > NNI RECOMMENDS DROPPING THE ENTIRE "SUBSCRIBER LINE CHARGE" FROM PHONE 
> > > BILLS BECAUSE THE LOCAL BELL COMPANIES' PROFITS ARE EXCESSIVE AND 
> > > VOILATE "FAIR AND REASONABLE" STATUTES
> > >
> > >
> > > New York ---New Networks Institute today filed a Complaint with the 
> > > Federal Communications Commission (FCC) to not raise residential rates 
> > > on July 1st, 2001. Known commonly as the "FCC Subscriber Line Charge", 
> > > this obscure fee will rise to $5.00 a month, a 43% increase from the 
> > > long standing $3.50 per month. This charge was previously increased on 
> > > second lines, from $3.50 to $7.00 per month. For multi-line business 
> > > customers, the total amount has gone from $6.00 to as high as $9.20 per 
> > > line per month.
> > >
> > > For a family or an at-home-worker with two phonelines, they have been 
> > > hit with an additional $60 a year for service, while for businesses, 
> > > these increases have meant hundreds of dollars monthly in extra charges.
> > >
> > > The increases to residential customers mean an increase to the Bells' 
> > > revenues of approximately $2.4 billion dollars for 2002.
> > >
> > > What's wrong with this increase? Just follow the money. These added 
> > > revenues are being given to the Bell phone monopolies: BellSouth, SBC, 
> > > Qwest and Verizon, who have become some of the richest, most profitable 
> > > companies in America. According to the Business Week Corporate 
> > > Scoreboard, (2/26/01) Bell profits in 2000 were 256% above the Business 
> > > Week 500, 212% above other utilities and 170% above America's top 9 
> > > companies --- including GM, Ford, GE, EXXON, Wal-Mart, IBM, AT&T, Enron 
> > > and Citicorp. (For a detailed discussion of the Bells profits see our 
> > > new report "Bell Profits Are Outrageous". 
> > > http://www,newnetworks.com/Bellprofits2001.htm )
> > >
> > > In our Report we contend that the current Bell monopolies' profits are 
> > > excessive and violate state and federal 'fair and reasonable' 
> > > regulations ---laws that are in place to make sure that the customer is 
> > > protected from rate gouging, in lieu of competition offering better or 
> > > cheaper alternatives. For example, the Telecom Act of 1996 states:
> > >
> > > "...Consumer Protection: The Commission and the States should ensure 
> > > that universal service is available at rates that are just, reasonable, 
> > > and affordable"
> > >
> > > "With this increase, the FCC is giving these monopolies, who are already 
> > > making unjust profits, more money. How can the FCC have such blinders on 
> > > as to not examine the overall profits that customers pay the local phone 
> > > company? It is a total revenue shell game with the customers always 
> > > losing" states Bruce Kushnick, Executive Director of New Networks Institute.
> > >
> > > The counter-argument for increasing this charge has been that as the 
> > > Subscriber Line Charge goes up, charges to Long distance carriers go 
> > > down. Local becomes more expensive and long distance becomes cheaper. 
> > > However, since this charge is a total monopoly --- there are virtually 
> > > no competitors to lower this charge and it must be paid as part of local 
> > > service ---- then it is still supposed to be regulated and therefore, it 
> > > must also be considered under the 'fair and reasonable" statutes of the 
> > > Telecom Act.
> > >
> > > The Money goes to the Bells: The Subscriber Line Charge (SLC) has 
> > > various names and definitions used on phonebills. It is usually called 
> > > the "FCC Subscriber Line Charge" but other names referring to the FCC 
> > > are also common.
> > >
> > > "Though the name implies that the money goes to the FCC, the revenues go 
> > > directly to the local Bell companies. It's curious that America's 
> > > phonebills don't tell you that this charge is really more Bell profits," 
> > > added Kushnick.
> > >
> > > Based on the overall profits of the Bell companies from local service, 
> > > NNI is calling on the FCC to not only drop the planned increase to the 
> > > Subscriber Line Charge on July 1st, 2001, but to remove the entire fee 
> > > from all phonebills. To read the FCC's information see: 
> > > http://www.fcc.gov/cib/consumerfacts/SLC061500.html
> > >
> > > Please note that the figures presented are only for residential 
> > > customers and are an approximation based on available data. The total 
> > > amount of SLC charges would have been $4.4 billion for 2001, but with 
> > > the increases, the total collected for a full year will be $6.8 
> > > billion---- a $2.4 billion dollars increase. The total "End User" 
> > > charge, both for residential and businesses, collected by the Bells and 
> > > GTE for 1999 was $9.7 billion, based on the FCC's annual report 
> > > "Statistics for Common Carriers".
> > >
> > > A companion New Networks Institute report "The Real Truth in Billing: 
> > > Phonebills Held Hostage", will be released July, 2001. It compares Bell 
> > > profits to the charges on phonebills. For more information contact Bruce 
> > > Kushnick at: 212-777-5418, or to read the full Complaint, visit New 
> > > Networks Institute at http://www.newnetworks.com
> >
> >
> >
> > For archives see: http://www.interesting-people.org/



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