House Passes Internet-Access Charge Ban
By TED HEARN -- Multichannel News, 5/21/2000 8:00:00 PM
Washington-The House passed a bill last week that would bar federal regulators from imposing per-minute charges on telephone calls placed to connect Web surfers to the Internet.
Federal Communications Commission spokeswoman Joy Howell issued a statement after the voice vote that said the bill (H.R. 1291), sponsored by Rep. Fred Upton (R-Mich.), was "superfluous" because "the [FCC] has no interest in imposing old regulatory schemes on new technology."
However, at the behest of the local phone industry, the bill left open the possibility for the FCC to apply per-minute access charges to carriers that route voice telephone calls over the Internet.
The United States Telecom Association fought to preserve FCC authority in the Internet-voice market because local phone carriers are concerned that access-charge revenue used to keep phone service affordable in rural and high-cost areas could dry up.
"We didn't want to create a loophole for carriers providing Internet long distance and other Internet-telephony services," USTA spokeswoman Michelle Tober said.
The FCC requires long-distance companies to pay billions of dollars per year in per-minute access fees to local phone carriers to originate and terminate long-distance calls. The universal-service fund, which includes explicit and implicit mechanisms, is estimated to be $20 billion annually.
AT & T Corp. is plunging into the local phone market to spur competition and avoid paying what it considers excessive access fees.
On March 31, AT & T-heading a group that includes Liberty Media Group and British Telecommunications plc-acquired a 39 percent stake in Net2Phone Inc., a leading Internet-telephony provider, for about $1.4 billion.
Under long-standing FCC policy, Internet-service providers like America Online Inc. are exempt from paying access fees. The exemption has spurred the development of the Internet by allowing AOL to offer monthly flat-rate pricing that allows Internet consumers to connect to the Web without incurring usage-based fees.
In the past, FCC chairman William Kennard has called the exemption one of the best decisions the commission ever made. Yet every so often, a rumor surfaces that the FCC is about to impose ISP-access fees, which triggers waves of calls and e-mail messages to the agency and Congress from angry consumers who think their Internet bills are about to rise.
Sen. John McCain (R-Ariz.) is sponsoring the same ban in a bill (S. 2255) that would also extend the current Internet-tax moratorium for another five years, McCain spokeswoman Pia Pialorsi said.
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