From: "E. ALLEN SMITH" <EALLENSMITH@ocelot.Rutgers.EDU>
Date: Tue, 3 Sep 1996 04:14:52 +0800
To: cypherpunks@toad.com
Subject: Modem tax again?
Message-ID: <01I9075ZGV3O9JDI20@mbcl.rutgers.edu>
MIME-Version: 1.0
Content-Type: text/plain


	As I recall, the alleged "subsidy" consists of lack of payments so
rural areas can have subsidized phone service - thus making their costs borne
by everyone else.
	-Allen

>     _________________________________________________________________
>   Avis
>     _________________________________________________________________
>                INTERNET IS HURTING PHONE NETWORKS, STUDY SAYS
>   __________________________________________________________________________
>      Copyright &copy 1996 Nando.net
>      Copyright &copy 1996 San Francisco Examiner
      
>   SAN FRANCISCO (Aug 27, 1996 3:11 p.m. EDT) -- Hoping to reduce or end
>   a subsidy that has kept down the cost of on-line service, local phone
>   companies here have presented the Federal Communications Commission
>   with studies arguing that Internet users are overtaxing phone networks
>   and ought to pay more for monthly service.
   
>   The studies, one of which was published on the Internet, argue that a
>   13-year-old subsidy lets Internet service providers (ISPs) pay a
>   fraction of what a long distance company pays to get a phone line,
>   even though Internet calls may use more phone system capacity than
>   voice traffic.
   
[...]

>   For their part, ISPs are alarmed at the remote possibility that the
>   FCC might let phone companies raise their monthly costs from the
>   current monthly average of $30 to anything approaching the $600 that
>   some long distance carriers pay for a phone line.
   
>   "If we had to pay anything like long distance access charges, it would
>   put all the ISPs out of business," said Ronald Plesser, the
>   Washington, D.C., attorney who represents the Commercial Internet
>   Exchange, an ISP trade group.
   
>   FCC staff attorney Kevin Werbach said the subsidy began in 1983, when
>   the five-member federal commission created a special rate to encourage
>   the growth of on-line services, voicemail companies and other emerging
>   industries that offered enhanced electronic services over phone lines.
   
>   In 1987, the FCC considered ending the subsidy but backed down after
>   public protest over what came to be characterized as the "modem tax."
>   Given the growth in on-line usage, ISPs assume any talk of ending the
>   subsidy would create a bigger backlash today.
   
>   "There are a minimum of 20 million and perhaps as many as 40 million
>   on-line and Internet users and many of them are registered voters,"
>   said William Schrader, president of PSI Net, an ISP in Herndon, Va.
   
>   Schrader said when he visited several FCC members recently, he
>   suggested that many of those users would be happy to send a letter of
>   protest to FCC Chairman Reed Hundt.
   
[...]

>    Copyright &copy 1996 Nando.net