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IP: details on Cal PUC plan to make *all* calls to ISPs "long distance"


From: Dave Farber <farber () cis upenn edu>
Date: Fri, 28 May 1999 19:36:36 -0400



X-Sender: jwarren () mail well com
Date: Fri, 28 May 1999 16:14:38 -0700
To: farber () cis upenn edu (Dave Farber),........
From: Jim Warren <jwarren () well com>
Subject: details on Cal PUC plan to make *all* calls to ISPs "long
 distance"

This is NOT an "urban legend"!  And the cartel of telco local monopolies
(RBOCs, regional Bell operating companies) are pushing this in almost all
states; not just before California's Public Utilities Commission.

--jim, Jim Warren, jwarren () well com, GovAccess list-owner/[im]moderator/janitor
345 Swett Rd, Woodside CA 94062; 650-851-7075; fax-for-the-quaint/650-851-2814
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To add or drop GovAccess, email to  Majordomo () well com  ('Subject' ignored)
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For brief description of GovAccess, send MajorDomo the msg:  info GovAccess


=== the outrageous details ===

     http://www.saber.net/sabernet/cpucdocs.html

CPUC ruling on Local vs. Long Distance access in California CPUC Issues on
    Local vs. Long Distance Internet Access in California


This information was updated 5/27/99 at 4:30pm

The consideration of matters scheduled for May 27 has been postponed at
the request of the Commissioners of the CPUC.

The matter involving Pac West and Pacific Bell will be considered on
June 3. The decision to rehear will be considered on June 10.

The California PUC (Public Utilities Commission) is considering a
ruling that would affect California customers' access to the Internet.
Basically, as part of an arbitration proceeding between Pacific Bell and
Pac-West Telecomm, Pacific Bell has asked the PUC to rule that calls to
the Internet are long distance calls instead of local calls! This web
page documents information concerning this issue, and gives information
on contacting public officials to express your opinions.



Summary:

In October, 1998, the California PUC ruled that calls to Internet Service
Providers (ISP's) should be considered local, rather than long distance.
Two commissioners dissented and 3 concurred. Pacific Bell appealed
the ruling to an arbitrator, who concurred with the original ruling.
Pacific Bell now has appealed the arbitrator's decision back to the PUC.
The PUC will rule on this appeal on May 27, 1999. The PUC now has three
commissioners, and commissioners Neeper and Duque dissented from the
October decision, arguing that ISP access should be considered long
distance.

On one agenda for the May 27th meeting are two possible responses to the
arbitrator's decision (Items 5 and 5a under "Orders"). Under another
agenda, the request to rehear the previous decisions is covered under
item EX-4 under "Orders". Please see the links near the bottom of this
page for the text of these two agendas.

The PUC could:

Uphold the arbitrator's decision, thus maintaining the status quo. This
is item 5 on the 5/27/99 agenda, and this is the item that the ISP's
would like to see passed.

Modify the arbitrator's decision by removing "reciprocal compensation"
from it. This modification would stop payments by Pacific Bell to PacWest
Telecomm, thus forcing PacWest to increase its charges to the ISP's
which are PacWest's customers. These increased costs would be passed on
to ISP customers in the form of rate increases. This is item 5a on the
PUC agenda. The ISP'S recommend NOT passing item 5a.

   Contact Information
   Please do NOT send e-mail to the Commission.
   It is recommended that persons interested in contacting the PUC
   concerning this issue write "snail-mail" letters to: California
   Public Utilities Commission Telecommunications Division,
   Issue 98-11-024 505
   Van Ness Ave. San Francisco, CA 94102
   Or you may FAX your letter to:
   (415) 703-1158
   or
   (415) 703-1910

   Your letter should include:
     Your Name
     Your Address
     Your Phone Number
     Reference to issue 98-11-024
     Your Comments
     Your Signature

   Since the commission now contains only three commissioners (out of
   five seats), it would be a good idea to also write to the governor:
   Governor Gray Davis State Capitol,
   1st Floor Sacramento, CA 95814
   (916) 445-2841 (Voice)
   (916) 445-4633 (FAX)
   (No E-mail address given) And you may wish to contact your
   California representatives:
   http://www.ca.gov/s/govt/legisca.html


An analysis of the situation is as follows:

Pacific Bell was required by the PUC to allow competing companies to
offer local telephone service in the state of California.

Pacific Bell implemented "reciprocal compensation". This meant that if
a customer of a competing local telephone company made a call which
terminated in Pacific Bell, the competing company would pay Pacific
Bell a nominal fee for completing the call. Likewise, if a Pacific
Bell customer made a call which terminated to a competing company's
customer, Pacific Bell would pay the competing company a nominal
fee for completing the call. This normally would favor Pacific Bell,
since more calls would go toward Pacific Bell, since it has the most
customers.  PacWest Telecomm registered as a local telephone company,
and began providing local telephone services. PacWest targeted ISP's,
and provided attractive competitive rates to the ISP companies. Thus,
many ISP's began using PacWest's services, and their customers, who were
Pacific Bell customers, began placing calls from Pacific Bell telephones
to the ISP's which were on PacWest. Therefore, Pacific Bell began having
to pay PacWest Telecomm to complete these calls.

Pacific Bell, wishing to preserve the original model of reciprocal
compensation, asked the PUC to re-classify calls to ISP's as long
distance. That way, such calls would result in PacWest paying Pacific Bell
MUCH more than Pacific Bell is now required to pay PacWest (since long
distance access charges are much higher than reciprocal compensation).

The PUC ruled against Pacific Bell's request in October, 1998. Pacific
Bell then appealed, and the arbitrator ruled against Pacific Bell in
April, 1999. Pacific Bell is now appealing the arbitrator's ruling back to
the PUC at a time when the original rulings might be overturned.  The PUC
agenda at this point lists two possible rulings. The first, item 5, would
preserve the status quo. The second, item 5a, would most likely result in
increased rates to Internet users throughout California. On May 27th, the
commissioners will adopt one of these agenda items.  The California ISP's
and their customers need to let their voices be heard before May 27th,
1999, or Internet access in the state of California may be drastically
altered! Rates will rise for customers and many rural areas may lose
local Internet access altogether!

----------------------------------------------------------------------

SaberNet's position in this matter is as follows:

The Commission should not modify its October decision or the
arbitrator's decision without obtaining input from the ISP's and their
customers.

The Commission should wait until five commissioners are seated before
considering this issue, especially if the commissioners favor item 5a.

----------------------------------------------------------------------


The following links give background information on the issue: Agenda for
5/27/99 meeting.See Items 5 and 5a under the "Orders" section. Item
5, if approved, would keep the status quo. Item 5a, if approved,
would raise the base rates being charged to ISP's by companies like
Pac-West Telecomm, since those companies would stop receiving reciprocal
compensation from Pacific Bell, and would have to raise their rates to
compensate. Fortunately, no item is proposed to overturn the arbitrated
agreement.

Another agenda for the May 27th meeting - see item EX-4 under "Orders".



Links:
PUC's write-up on the original ruling on 10/5/98
Commissioner Knight's memo concurring with the decision (Note:
Commissioner Knight is no longer with the PUC)
Commissioner Duque's dissent memo
Commissioner Neeper's dissent memo



This page was last updated 5/21/99 at 1pm


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