IP: The real facts re the FCC and the ISPs

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

From:


http://www.fcc.gov/Bureaus/Common_Carrier/Factsheets/ispfact.html


THE FCC, INTERNET SERVICE PROVIDERS, AND ACCESS CHARGES 


This fact sheet offers informal guidance on an issue that has generated
a great deal of public interest. For more specific details about the
proceedings currently before the Commission, please visit our web site
(http://www.fcc.gov/). 


In December 1996, the Federal Communications Commission (FCC)
requested public comment on issues relating to the charges that Internet
Service Providers (ISPs) and similar companies pay to local telephone
companies. On May 7, 1997, the FCC decided to leave the existing rate
structure in place. In other words, the FCC decided not to allow local
telephone companies to impose per-minute access charged on ISPs. 


Please Note: There is no open comment period in this proceeding. If you
have recently seen a message on the Internet stating that in response to
a request from local telephone companies, the FCC is requesting
comments to <isp () fcc gov> by February 1998, be aware that this
information is inaccurate. 


The FCC issued an unrelated public notice, DA 98-2, on January 5, 1998
in connection with a report to Congress on universal service. Pursuant to
the FCC's 1998 appropriations legislation, the Commission must submit a
report by April 10, 1998 on several issues including the legal status of
Internet services under the Telecommunications Act of 1996. Comments
in response to the public notice are due January 20, 1998, and reply
comments are due February 2, 1998. Informal comments may be sent by
email to <usreport () fcc gov>. 




Background Information 


Each long distance telephone call you make includes per-minute fees that
your long distance carrier pays to the originating and terminating local
telephone companies over whose facilities that call also travelled. Those
fees, which are designed to recover the costs to local telephone
companies for use of their facilities, are referred to as "access
charges." 


As part of its Access Reform proceeding, CC Docket 96-262, the FCC in
December 1996 sought comment on the treatment of ISPs and other
"enhanced service providers" that also use local telephone companies'
facilities. Since the access charge system was established in 1983,
enhanced service providers have been classified as "end users" rather


than "carriers" for purposes of the access charge rules, and therefore
they do not pay the per-minute access charges that long-distance
companies pay to local telephone companies. 


In the Access Reform Order, FCC 97-158, adopted on May 7, 1997, the
FCC concluded that the existing rate structure for ISPs should remain in
place. In other words, the Commission reaffirmed that ISPs are not
required to pay interstate access charges. 


When it began the Access Reform proceeding, the Commission also
issued a Notice of Inquiry, CC Docket 96-263, seeking comment more
broadly on usage of the public switched telephone network by Internet
and interstate information service providers. A Notice of Inquiry is a
request for information that does not involve any specific proposed
action. The Commission stated in the Access Reform order that it
intended to use the Notice of Inquiry record to develop a Notice of
Proposed Rulemaking (NPRM) proposing actions to facilitate the
efficient deployment of data networks.