Date : Thu, 11 Jun 1987 22:46:00 MDT
From : Keith Petersen <W8SDZ@SIMTEL20.ARPA>
Subject: FCC proposal again threatens modem users
Here we go again!! From the Wall Street Journal, June 11, 1987...
PHONE-ACCESS FEE IS PROPOSED FOR COMPUTERS: FCC WOULD MAKE FIRMS
PAY TO LINK NETWORKS TO LOCAL PHONE LOOPS
By Bob Davis, Staff Reporter of the WSJ
WASHINGTON - The Federal Communications Commission proposed a fee
that would steeply increase telecommunications charges for many
business and residential computer users.
Under the FCC proposal, companies such as US Sprint
Communications Co.'s Telenet subsidiary and McDonnell Douglas
Corp.'s Tymnet unit would be charged as much as $5 per hour per
user to hook up their communication networks to local telephone
loops. Currently, computer networks are exempt from these so-
called access charges. The charges would almost certainly be
passed on to consumers and business customers.
US Sprint is a joint venture of GTE Corp. of Stamford, Conn. and
United Telecommunications Inc., Kansas City, Mo.
Price increases would be a big blow for millions of personal-
computer hobbyists who depend on computer networks to communicate
cheaply with one another and to call up such information services
as H&R Block Inc.'s Compuserve Inc. Currently, most customers
pay only a few dollars an hour in telephone costs.
The proposal also would be a major setback for Telenet and
Tymnet, which have attracted consumers and business customers
with discount computer telecommunications rates. These
companies rent private telephone lines, which previously haven't
been subject to access charges, and spread the costs among
thousands of computer users.
Rate increases "will dry up the marketplace for new and
innovative computer services" said Joseph Markowski, counsel for
Adapso, a trade association of computer service companies.
"Prices will go through the roof."
He added that the proposal would improperly discriminate between
computer-network companies and other companies that maintain
their own data networks. The latter companies apparently
wouldn't be charged access fees under the FCC proposal. Clark
Woodford, a Compuserve executive vice president, said any access
charges "will cause us to reassess our pricing structure."
The FCC voted 4-0 to seek comment on a plan to end the access-
charge exemption by Jan 1, 1988. The commissioners said the
exemption amounted to a subsidy for the computer-network
companies that was being paid by business and residential
telephone users. "We don't want the (telecommunications) network
to evolve in response to various subsidies and
anomalities [sic]," said FCC Chairman Dennis Patrick.
Agency staffers and others said the Jan 1 date wasn't firm. Page
Montgomery, vice president of Economics and Technology, Inc. a
Boston telecommunications company, urged the agency to delay the
decision for perhaps a year until the local phone companies
change their networks to give competitors equal connections.
Otherwise, the regional Bell companies, which are trying to enter
the computerized-communications field, would have a big
advantage. That's because the computer-service companies would
be burdened with price increases and also wouldn't be able to
offer hook-ups to the local telephone network that are as good as
those offered by the phone companies. "It would be a serious
policy mistake" to end the exemption Jan. 1, 1988, Mr. Montgomery
said.
The FCC said that access charges should decline over the next few
years, by about a dollar per hour, as the agency increases
residential charges for connecting to the telephone network.
Much of the revenue from these assessments is used to reduce the
access charges paid by telecommunications companies.
The FCC proposal came as a surprise. In March, the agency
decided that computer-network companies should remain
deregulated, which industry observers interpreted to mean that
rates wouldn't increase. But now the FCC said that only purely
private networks, operated by some big companies for their
internal communications, would remain free of access charges.