[5838] daemon@ATHENA.MIT.EDU (Lars Poulsen) Commercialization & Privatization of the Internet 06/02/93 02:10 (62 lines) Subject: Re: Modem Use Fees From: lars@spectrum.cmc.com (Lars Poulsen) Date: Wed, 2 Jun 93 06:08:19 GMT Apparently-To: com-priv@psi.com In article sbernst@panix.com (Stan Bernstein) writes: >The following, originating from Mr. Tom Justice (CGFS69A [Prodigy]) and >authorized for resubmission to other networks, deals with proposed modem >use fees. > "... The FCC proposes that users of modems should pay extra charges >for the use of the public telephone network which carry their data. >In addition computer network services would also be charged as much as >$6.00 per hour per user for the use of the publc telephone network. >... "In short, a modem call is the same as a voice call and therefore >should not be subject to any additional regulation...." While the instinctual reaction of most of us is to sigh "oh, no, not another Craig Shergold rumor", the issues raised here are somewhat relevant to COM-PRIV. The crux of the matter is that the FCC originally did plan to treat a modem call "just like a voice call" and therefore decided that the X.25 carrier that takes the call from the local PAD (async dial-in port) to the time-sharing host is in fact a long distance carrier, and therefore should be assessed the same network access fees as ATT, MCI and Sprint. (The packet carrier is often referred to as a VAN - Value Added Network while the long distance companies are IXCs - Inter eXchange Carriers. In this alphabet soup, the local phone company is a Local Exchange Carrier: LEC) The counter argument is that the telephone network is used for a local call to the PAD, and the rest of the carriage is done on private circuits, which should be no business of the FCC or the phone companies (except in so far as they should be obliged to rent the circuits to the packet carrier on the same tarriffed terms as to anyone else). Both arguments are strong. Either the IXCs should not be assessed the access charge, or large users who build their own long-haul nets out of leased lines should be charged too. Neither of these variations will fly, politically. After the public storm of protest caused the FCC to abandon the access charge for the packet carriers' dial-in ports, they took a second look and decided that the difference that justified collecting access charges from the IXCs but not from the VANs was that the IXCs use the LECs processing services for user authentication and billing (they get the calling number delivered along with the call) while the VANs don't (yet). The FCC therefore resolved that the VANs could continue their exemption from the access charge indefinitely SO LONG AS THEY DON'T USE ANY NETWORK SERVICES other than local call delivery. The LECs must make the ONA (Open Network Architecture) features available to the VANs, but if a VAN uses any of them, the VAN is subject to access charges as an IXC. This kind of regulatory tinkering is crucial to determining who survives when the network is privatized. Will PSI's Frame Relay service be able to compete with AT&T's end-to-end switched ISDN B-channels if PSI has to pay $6/hour to the LEC for taking the traffic out of the LATA ? -- / Lars Poulsen, SMTS Software Engineer Internet E-mail: lars@CMC.COM CMC Network Products / Rockwell Int'l Telephone: +1-805-968-4262 Santa Barbara, CA 93117-3083 TeleFAX: +1-805-968-8256 --[5838]--