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IP: Re: STOP THE FCC LINE CHARGE INCREASE JULY 1st, 2001, NNI Asks the FCC
From: David Farber <dave () farber net>
Date: Sun, 01 Jul 2001 19:23:35 -0400
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.comFor archives see: http://www.interesting-people.org/
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- IP: Re: STOP THE FCC LINE CHARGE INCREASE JULY 1st, 2001, NNI Asks the FCC David Farber (Jul 01)