From: jim bell <jimbell@pacifier.com>
Date: Tue, 3 Sep 1996 17:02:42 +0800
To: "E. ALLEN SMITH" <cypherpunks@toad.com
Subject: Re: Modem tax again?
Message-ID: <199609022230.PAA15730@mail.pacifier.com>
MIME-Version: 1.0
Content-Type: text/plain


Yes, isn't it interesting how they managed to turn this issue into their desire to "end a subsidy," when you know they would be terrified of REALLY ending the various telephone subsidies that are operating.  For years, businesses have paid more for telephone service than residences.  While this might have made sense in the era before digital switches, it does no longer.

Also,  the claim that "Internet users are overtaxing phone networks and ought to pay more for monthly service" isn't believable.  In my experience, the time between 9:30 pm and 11:00 pm is the only time which usually produces busy signals to my ISP, a time which is when, traditionally, telephone traffic is quite light as compared to peak hours.  I'd be happy to compare the "usage-factor versus time" of ISP's versus regular voice calls if I had the numbers, but I suspect that calls to local ISP's complement voice traffic rather than add to its peaks.  



At 01:40 PM 9/2/96 EDT, E. ALLEN SMITH wrote:
>	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
>
>
Jim Bell
jimbell@pacifier.com