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From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Thu Aug 13 01:03:00 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA25115; Thu, 13 Aug 87 01:03:00 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Thu 13 Aug 87 01:03:39-EDT Date: Wed, 12 Aug 1987 23:01 MDT Message-Id: <KPETERSEN.12326065848.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Info-Hams@SIMTEL20.ARPA, Telecom@XX.LCS.MIT.EDU Subject: Pc Pursuit kit for replying to FCC modem fees docket Status: RO The following new files have been uploaded to SIMTEL20 and are available via standard anonymous FTP: Filename Type Bytes CRC Directory PD:<MISC.PCPURSUIT> -READ.ME.1 ASCII 1602 789BH ANALYSIS.1.1 ASCII 10123 33F6H ANALYSIS.2.1 ASCII 22490 3CD4H CMNT-FMT.FCC.1 ASCII 16019 5F5DH CORP.LTR.1 ASCII 3817 FCD2H DOCKET.FCC.1 ASCII 39853 8164H LTR-FMT.FCC.1 ASCII 8520 C484H PURSUIT.LTR.1 ASCII 4822 F800H Here is the -READ.ME file: 8/11/87 Information, Analysis, and Action Issues for YOU regarding the FCC proposed Access Charges The BBS of PC Pusuit now provides copies of important information on the proposed access charges - charges that threaten to severely impact the entire online information industry if action is not taken soon by concerned Companies and End Users such as you! Please note that the FCC recently extended the time for receiving formal comments and reply comments to September 24, 1987 and October 26, 1987 respectively. Letters can be sent anytime; the sooner the better! Even though the FCC has extended the time to receive comments, this should not be construed to mean that the FCC is reconsidering or backing down from imposing access charges. It is therefore important that you voice your concerns now so that you can continue to enjoy cost-effective access to online communications services. In this libarary you will find text files prepared by Telenet regarding the access charge issue and steps you can take to influence the FCC. DOCKET.FCC - Copy of the FCC Docket on Proposed Access Charges ANALYSIS.1 - Telenet analysis of Access Charges - for PC users ANALYSIS.2 - Telenet's more in-depth analysis of Access Charges LTR-FMT.FCC - Format for submitting letter responses to the FCC CMNT-FMT.FCC - Format on submitting formal comments to the FCC PURSUIT.LTR - Letter sent to PC Pursuit customers (8-12-87) CORP.LTR - Letter sent to Telenet Corporate customers (7-23-87) --------- --Keith Petersen Arpa: W8SDZ@SIMTEL20.ARPA Uucp: {bellcore,decwrl,harvard,lll-crg,ucbvax,uw-beaver}!simtel20.arpa!w8sdz GEnie: W8SDZ RCP/M Royal Oak: 313-759-6569 - 300, 1200, 2400 (V.22bis) or 9600 (USR HST) From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Sun Aug 16 20:25:57 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA19268; Sun, 16 Aug 87 20:25:57 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Sun 16 Aug 87 20:22:16-EDT Date: Sat, 15 Aug 1987 14:51 MDT Message-Id: <KPETERSEN.12326763009.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Telecom@XX.LCS.MIT.EDU Subject: Telenet analysis(2) of FCC access fee proposal Status: RO Telenet Communications Corporation 12490 Sunrise Valley Drive July 23, 1987 Reston, Va. 22096 THE FCC PROPOSAL TO IMPOSE ACCESS CHARGES ON ENHANCED SERVICE PROVIDERS ISSUE ANALYSIS I. Background -------------- Under the FCC's rules adopted in the Second Computer Inquiry (often called Computer II) in 1980, computer based services such as protocol conversion (an integral part of Telenet's public packet network service), database access, time-sharing and other remote computing services, home banking/shopping services, electronic mail, and voice messaging services are defined as "enhanced services," and firms providing such services to the public are "enhanced service providers" (ESPs). The FCC's rules provide that enhanced services are not a common carrier activity, and ESPs may not be regulated as carriers at either the federal or state level. Thus, ESPs are treated by local exchange carriers (LECs), i.e., local telephone companies, the same as any other non-carrier user of the local exchange; that is, ESPs pay ordinary business telephone rates for the local exchange dial lines (often called 1MB or B-1 lines) that they utilize. Such dial lines are typically connected to an ESP's equipment in a particular locality (e.g., a packet switch or data concentrator) for dial-in access to the ESP's private-line network and/or host computer(s), and typically carry a mixture of interstate and intrastate traffic. In contrast, long-distance common carriers (e.g., AT&T, MCI and US Sprint) pay "carrier access charges" for their use of the local exchange dial network to access their customers. Such carriers pay FCC-imposed access charges for their interstate traffic and they pay access charges imposed by the various state public utility commissions (PUCs) for their intrastate traffic. In both cases, the charge is levied on a per-minute-of-use basis, unlike the flat rates charged for 1MB business telephone lines.(1) Carrier access charges were introduced in 1984 by the FCC, concurrent with the AT&T divestiture, to replace the long-standing system of "settlements and division of revenue" wherein revenues for long-distance telephone service were allocated within the pre-divestiture Bell System and shared with the independent telephone companies. Such access charges also replaced an interim system of charges for local access paid by the new competitive long-distance carriers such as MCI and Sprint. The FCC's initial access charge plan, issued in 1983, would have applied such charges to ESPs, on the theory that ESPs - like the long-distance carriers - utilize the local exchange network to originate or terminate their interstate traffic. However, on reconsideration the FCC decided not to apply such charges to ESPs, recognizing that private voice and data networks operated by corporations, government agencies, etc., also "leak" interstate traffic to/from the local exchange. The FCC expressed the desire to impose carrier access charges on all such traffic, but noted that there is no way for the LEC to measure the interstate minutes-of-use on dial lines connected to an ESP or "leaky PBX", and thus no effective way to apply a per-minute access charge to such traffic.(2) The FCC's 1983 decision, as modified, applied carrier access charges only to long-distance carriers providing MTS/WATS-equivalent services via their own interstate facilities.(3) Subsequently, in Docket 86-1, the FCC applied carrier access charges to other interstate common carriers, such as WATS resellers (firms which use WATS service in lieu of their own facilities, to provide MTS-type service) and telex carriers. II. Summary of the FCC's Proposal ---------------------------------- As stated in the attached Notice of Proposed Rule Making (NPRM), the FCC proposes to apply its carrier access charges to all ESPs who utilize local exchange dial lines to originate or terminate interstate traffic. Such access charges would be in lieu of the 1MB rates currently paid by ESPs, effective as of January 1, 1988. The FCC's "enhanced service" definition, as discussed above, would encompass VANs, such as Telenet, and any type of host-based services provided to external users for a fee. (That is, an organization providing computer services solely to its own employees would not be considered an ESP, as we understand the FCC's intent.) In short, the carrier access charges would apply to: * All interstate traffic utilizing local dial access on public packet-switching networks such as Telenet; * All interstate traffic utilizing local dial access on a "private" network operated by an ESP to provide host-based services - e.g., where a firm providing database services utilizes an interstate private line with a remote data concentrator equipped with dial-in ports; and * The portion of traffic from "external" users on a private network such as the previous case, where the network serves a mixture of "internal" and "external" users. Thus, access charges would affect not only VANs such as Telenet, but all organizations providing database services, electronic mail, transaction processing and other on-line services via interstate private lines with dial access. III. Financial Impact on Telenet and Its Customers --------------------------------------------------- The FCC's rate structure for carrier access charges includes two components: "traffic-sensitive" (TS) and "non-traffic sensitive" (NTS) rate elements.(4) In theory, the TS rate element - which is composed of several sub-elements - recovers the LEC's actual cost of providing dial access to the long-distance carrier whereas the NTS rate element is primarily a subsidy mechanism, used to fund a portion of the costs of local exchange service. The NTS charge, together with the FCC-imposed Subscriber Line Charge (SLC) on each business and residence exchange line, provides a pool of funds that are distributed to the LECs to subsidize the price of residential local telephone service.(5) The TS charge varies from one exchange to another, averaging 3.12 cents per minute nationwide. The NTS charge is currently fixed at 4.33 cents per minute for "terminating" access and 0.69 cents per minute for "originating" access. Although most ESP networks, such as Telenet, primarily involve dial-in rather than dial-out traffic (i.e., they operate in an "originating" mode), under the FCC access charge rules ESPs would be charged the higher "terminating" NTS rate. "Originating" rates are only available for traffic that also terminates using dial access - which ordinary long distance (MTS) calls do, but most ESP traffic does not.(6) Thus, under the FCC's proposal, an ESP would be subject to total charges of 3.12 + 4.33 = 7.45 cents per minute, or $4.47 per hour, for dial-in or dial-out access to the ESP's network. Although Telenet has made no firm decisions on the matter, it is unlikely that we could absorb any significant portion of such an enormous cost increase; thus we would have to pass the increase on to our customers. Since Telenet's current daytime dial-in rates typically range between $4 and $8 per hour - with actual figures for a particular customer depending on several factors such as monthly volume and mix of A/B/C city traffic - this could amount to a 60-100 percent price increase. The impact on our evening/weekend rates would be much more dramatic. Such rates are heavily discounted and amount to less than $1 per hour for high-volume Nightline customers. Since there is no time-of-day discount in the carrier access charges, the FCC's proposal would increase these Telenet prices by more than 500 percent. IV. Policy Arguments --------------------- A number of compelling arguments can be made against the FCC's access charge proposal. These include the following: A. Impact on Information Services Industry 1. The access charge proposal would greatly increase the cost of on-line computing and information services - hitting users of low-cost services (especially in the home and educational markets) particularly hard. Development of the market for such low-cost services would be stifled, depriving U.S. consumers of affordable information services. 2. Access charges would have serious indirect effects upon the emerging "information economy" and upon U.S. competitiveness in world markets. Such charges would affect the viability and capability of the information service infrastructure that supports U.S. industrial and commercial activities. 3. Access charges would also have a direct negative effect upon the U.S. balance of trade. The information services industry is a bright spot in our industrial trade picture, but its vitality and thus its ability to continue strong export sales would be harmed by undermining its domestic market. 4. Contrary to the FCC's claim (NPRM, para. 9), carrier access charges remain nearly as high as when they were introduced in 1984. The NTS terminating rate (which ESPs would pay) has fallen only 18%, and the TS rates are essentially unchanged; the total average rate has fallen only 11%. The current total rate is approximately 15 times higher than the average price of 1MB line, and ESPs would still experience massive "rate shock" if access charges were applied to them - just as in 1983, when the FCC noted this effect and decided not to take such action. 5. Imposition of interstate access charges by the FCC would be an open invitation for the state PUCs to do likewise for intrastate ESP traffic. This would further increase the adverse financial impact upon ESPs and their users. Moreover, the ability of the FCC and the state PUCs to single out ESPs for an access charge "tax" increases the probability of their imposing other regulatory requirements on such firms in the future. In other words - in addition to its direct financial impact - the FCC proposal has undesirable re-regulatory implications, particularly at the state level. B. Impact on Telephone Rates There would be virtually no offsetting benefit to the consumer if access charges were imposed on ESPs. The total size of the NTS subsidy pool would not increase; rather, the pool would be spread over a slightly larger base of usage minutes. Thus, there would be no change in the price of local exchange service. Due to the enormous volume of MTS/WATS traffic relative to ESP traffic, there would be only a tiny potential reduction - estimated at less than one percent - in the price of long distance service. C. Discrimination 1. In attempting to cure alleged discriminatory treatment of long-distance carriers vis-a-vis ESPs, the FCC would be merely substituting one form of discrimination for another: ESPs would be singled out from all other non-carrier users who pass interstate traffic through the local exchange and would be forced to pay drastically higher rates for identical service. 2. The massive increase in the cost of VAN service would lead users to consider alternative means of meeting their needs. Large users with high traffic densities could implement private networks which - although perhaps more costly than their current VAN service - would avoid the access charges. To the extent VAN lost traffic from such users, their over all unit cost of service would increase. This would impact the small users who have no alternative but VAN service, thereby further exacerbating the large-vs.-small user discrimination. D. The FCC's "Equity" Argument; Purpose of Access Charge The FCC apparently feels that because long-distance carriers pay access charges for their use of the local exchange, ESPs should pay likewise. But this ignores the fact that users and carriers have always paid differently for their use of the local exchange - with carriers first paying through the pre-divestiture system of settlements and division of revenues, and then paying access charges. The historical purpose of charging carriers these above-cost rates has been for long distance telephone service to subsidize local telephone service; nothing has changed which would warrant changing this basic principle and sweeping users of the network into the access charge pool. E. Bypass of the Local Exchange Another effect of the access charge proposal would be to exacerbate the trend towards bypass of the local exchange - an outcome that the FCC has sought to minimize. VANs and other ESPs would look for alternative network technologies and configurations to avoid using dial access, such as local digital radio and terminal concentrators on dedicated lines. To the extent such bypass alternatives are more costly than the true cost of local dial service, they represent a loss to the economy due to the FCC's artificial pricing barriers. F. Traffic Measurement and Enforcement Today as in 1983, the LECs have no ability to measure interstate ESP traffic (i.e., to determine which dial calls to an ESP will leave the state via the ESP's private-line network and which will not). Nor can they determine which entities are ESP's in whole or in part. Consequently, the proposed rule would be impossible to enforce fairly and evenly. Many entities which "should" pay, at least for a portion of their traffic, would escape; and entities seeking in good faith to comply with the rule would presumably have the burden of measuring their own "interstate enhanced service" traffic, and would be subject to potential liability for any errors. ACTIONS FOR TELENET CUSTOMERS AND THEIR USERS ----------------------------------------------- Although any of the above arguments could be made by any party, users and providers of enhanced services - such as the Telenet customer and his users - are particularly well-suited to address topic A (impact on computing and information services and the indirect consequences for the U.S. society and economy) and topic C (discrimination among different classes of users of the local exchange). We urge you to give these topics special attention in your comments to the FCC. In particular, please note the information requested in paragraph 10 of the NPRM regarding "rate shock" issues - particularly the impact of the proposed access charges upon demand and revenues for enhanced services and growth of the industry. If you feel that the FCC proposal would have a material effect upon user demand for any enhanced services you may provide, I would urge you to submit whatever data is publicly available regarding your rates, revenues and growth rate, and how these might be affected by access charges. FCC Procedures and Recommended Actions for Telenet Customers and Their Users As indicated in the attached NPRM, the FCC's access charge proposal is the subject of a new rulemaking proceeding, CC Docket No. 87-215. The FCC has scheduled two rounds of written comments in this docket - initial comments, due August 24, 1987, and reply comments, due September 14, 1987. Both before and after these filing dates, any interested parties may discuss the issues with the FCC Commissioners and staff. In addition, interested parties should consider contacting their Congressional delegations and members of the House and Senate Telecommunications Subcommittees, since members of Congress can also influence the FCC on behalf of their constituents. A. Written Comments Written comments addressed to the FCC can take two forms: formal legal briefs, and informal correspondence (with relevant attachments, in either case). Formal briefs are preferred if you have an attorney available to prepare them, because they tend to be taken more seriously by the FCC, but an informal letter signed by senior management of your organization and expressing the same points can also be quite effective. Your initial submission should be made by the August 24 deadline, with the September 14 filing (which is optional) reserved for a reply in support or rebuttal of the initial comments filed by other parties. The FCC is somewhat flexible about this, however, and parties who have not filed comments by the first-round due date often submit "reply" comments containing whatever arguments they wish to make. If you file formal comments and/or reply comments, they should be typed on 8 1/2 x 11" paper, double-spaced, and should have a caption on the first page the same as that shown at the top of the lNPRM to identify the docket. An original and five copies should be submitted to the Secretary, Federal Communications Commission, Washington, DC 20554, by the respective due dates. A copy should also be sent to Gerald Brock, Chief, Common Carrier Bureau, at the same address. If you prefer to write a letter, it should be addressed to The Honorable Dennis Patrick, Chairman, at the same address, with copies to the Secretary, to Mr. Brock, and to each of the other three Commissioners: Commissioner James Quello Commissioner Mimi Weyforth Dawson commissioner Patricia Diaz Dennis On the letter, indicate "RE: CC Docket 87-215". In additional, we strongly recommend that you send copies of your comments/reply comments and/or any correspondence to the FCC on this matter to your Congressman, your two Senators, and the Chairmen of the House and Senate Telecommunications Subcommittees. (The names and addresses of your Congressional representatives can be obtained from your local library, Chamber of Commerce or your local Democratic or Republican headquarters). A cover letter should be attached, stressing the importance of this issue and asking the Member of Congress to express his/her concerns to the FCC. The subcommittee chairmen are: The Honorable Edward J. Markey, Chairman Subcommittee on Telecommunications and Finance Committee on Energy and Commerce U.S. House of Representatives Washington, DC 20510 The Honorable Daniel K. Inouye, Chairman Subcommittee on Communications Committee on Commerce, Science and Transportation U.S. Senate Washington, DC 20510 Please remember to send to Telenet's Regulatory Affairs Dept. (12490 Sunrise Valley Dr., Reston, VA 22096) a blind copy of whatever you file with the FCC, so that we will be aware of it in our lobbying efforts. B. Lobbying Interested parties may discuss the issues in this docket with the FCC Commissioners and staff at any time prior to the FCC's issuance of a "Sunshine" notice stating that it plans to consider the matter at its next Public Meeting - which will probably occur sometime in October or November. It is perfectly appropriate to contact the FCC now if you have any questions about this matter, but meetings and telephone calls for the purpose of lobbying your views are generally most effective after the two rounds of written comments are completed - i.e., after September 14. At that time, we suggest that you call or visit as many of the key FCC decision-makers as possible, to follow-up on your written comments and make your views known in person. Such contacts should be focused on the four Commissioners, the Common Carrier Bureau Chief, and the Chief of the Bureau's Policy Division. Their phone numbers are: Chairman Dennis Patrick 202-632-6600 Commissioner James Quello 202-632-7557 Commissioner Mimi Dawson 202-632-6446 Commissioner Patricia Dennis 202-632-6996 Gerald Brock Chief, Common Carrier Bureau 202-632-6910 Thomas Sugrue, Chief, Policy Division, Common Carrier Bureau 202-632-9342 Such discussions with FCC personnel are known as exparte contacts and are discussed in paragraphs 15-16 of the NPRM. The key point is that if you make a presentation including arguments not covered in your previously-filed written comments, the rules require that a short summary of the presentation be sent to the Secretary's office for inclusion in the docket file, with a copy to the FCC personnel to whom the presentation was made. Copies of any handout material from presentations to FCC personnel are normally sent to the Secretary's office even when the material covered was discussed previously in written comments. FOOTNOTES: ------------- 1. The FCC's ESP access charge proposal would apply only to interstate traffic, although if adopted it is likely that at least some state PUCs would follow the FCC's lead and impose their intrastate access charges on ESPs as well. This memo discusses only the FCC proposal. 2. The FCC directed the LECs to develop a means of measuring such interstate traffic, and to report on their progress. To our knowledge, no such reports have been made, and the situation today remains as it was in 1983: The LECs have no means of determining which local dial calls to or from a customer's data or voice equipment are, in fact, interstate in nature. 3. MTS, or message telecommunications service, is the ordinary long-distance dial telephone service furnished by AT&T and its competitors such as MCI and US Sprint. WATs, or wide are telecommunications service, is similar to MTS but priced on a bulk basis for large users. 4. The NTS rate element is also called the "Carrier Common Line" (CCL) charge, and is referred to as such in the NPRM. 5. As discussed in footnote 26 of the FCC's NPRM, the SLC on residence lines is currently capped at $2.60 per line per month, and will increase somewhat in the future. The SLC on the business lines (IMB lines) is capped at $6.00 per line per month, and is not expected to increase in the future. Each LEC sets the actual SLC rates in its territory, subject to these caps. 6. See NPRM, paragraph 9 and footnote 26. * * * * * * * * * * * * * * * * From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Sun Aug 16 20:33:46 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA19303; Sun, 16 Aug 87 20:33:46 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Sun 16 Aug 87 20:24:49-EDT Date: Sat, 15 Aug 1987 14:56 MDT Message-Id: <KPETERSEN.12326763885.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Telecom@XX.LCS.MIT.EDU Subject: Telenet letter to Pc Pursuit users on FCC access fee proposal Status: RO A letter from Telenet to Pc Pursuit users: August 12, 1987 Dear PC Enthusiast: Six weeks ago we wrote to many of you about the Federal Communication Commission's (FCC) proposal to extend carrier access charges to Telenet and other enhanced service providers. In that letter, and in subsequent conversations with many of you, we promised to provide additional information when the FCC published its official notice -- which occurred on July 17. The following documents are available on PC Pursuit's Net Exchange BBS: (1) a copy of the FCC's Notice of Proposed Rule Making (NPRM) and (2) a paper that both analyzes the NPRM as it affects PC users and suggests steps that you can take to help defeat the access charge proposal, thus ensuring the continued availability of low-cost information and data communications services. Access charges would affect all interstate data communications utilizing local dial access to reach a public on-line computer service, e.g., a database or electronic mail service, home banking/shopping service, or videotex service. Access charges would also apply to services such as PC Pursuit, provided by a value-added network (VAN) like Telenet, that utilize local dial access. These charges would add approximately $4.50 per hour to the cost of connections involving only dial-in access (e.g., a PC dialing into the Telenet network to reach a database host), and would add approximately $7 to $9 per hour to the cost of connections involving both dial-in and dial-out access (such as PC Pursuit, for PC-to-PC communications). Further, unlike most communications prices, access charges have no discounts for evening and weekend hours. Services currently priced at a flat monthly rate would have to be repriced on an hourly basis under access charges. For those of you who are current PC Pursuit subscribers, access charges would require Telenet to increase its prices (currently, a flat monthly rate of $25) to reflect the $7 or $9 per-hour access charge. Of course, we expect that the significantly higher prices would dampen demand for the service, so it is not clear whether Telenet could continue to make PC Pursuit available even for those users willing to pay the higher prices. PC users who subscribe to database services such as The Source, CompuServe, or Quantum would incur access charges on those services of approximately $4.50 per hour -- effectively doubling the current rate for some services. This need not occur. We can defeat the access charge proposal with your help. By writing a letter to the Chairman of the FCC and sending copies to the other Commissioners, the Secretary, the Chief of the Common Carrier Bureau, and your Congressional representatives, you can affect the outcome of this issue. Both the FCC and the Congress are receptive to your input. Moreover, they need to hear from you in order to assess the impact of this proposal. Your letter should emphasize how access charges would affect you. Tell the FCC what database, bulletin board, or data communications services you use today and for what purposes, what your monthly usage level is, what you pay now, and how access charges (at approximately $4.50 per hour of use for database host access, and twice that for PC Pursuit) would impact your use of these services. Our analysis paper includes the names and addresses of the relevant parties to whom you can write. As indicated above, it is perfectly acceptable for you to write one letter to the Chairman of the Federal Communications Commission and to copy all other parties. Names and addresses of U.S. Senators are included here; for the name of your Congressional representative, contact your local library or Chamber of Commerce. Telenet would appreciate having a blind copy of your letter for use in our lobbying efforts. and we have enclosed a business reply envelope for your convenience in sending us one. Please note that the FCC has extended the due dates for comments and reply comments in this proceeding to September 24 and October 26, respectively. You need not wait for these dates, however; your letter can be sent immediately. Please continue to access PC Pursuit's Net Exchange BBS for updates on the FCC access charge proposal using the following sign-on procedure: @C(sp)PURSUIT, YOUR ID, YOUR PASSWORD or dial 703-689-3561 with your modem. Write today. Your letter can make the difference! With your help, this proposal can be defeated! Sincerely, Paolo L. Guidi President From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Sun Aug 16 20:35:54 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA19316; Sun, 16 Aug 87 20:35:54 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Sun 16 Aug 87 20:25:36-EDT Date: Sat, 15 Aug 1987 22:34 MDT Message-Id: <KPETERSEN.12326847333.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Telecom@XX.LCS.MIT.EDU Subject: Sample format for Comments/Reply Comment in FCC modem fees proposal Status: RO TO: Telenet Customers FROM: Phil Walker SUBJECT: Sample Format for Comments/Reply Comments in FCC Access Charge Proceeding A number of Telenet customers have requested information concerning the proper format for filings with the FCC regarding the access charge issue, Docket 87-215. Such filings can take the form of either a formal legal pleading (Comments and/or Reply Comments) or an informal letter to the Chairman of the FCC. In either case, a copy should be sent to your Congressman, your two Senators and the Chairmen of the House and Senate telecommunications subcommittees, with a cover letter asking them to urge the FCC not to proceed with its proposal. Attachment 1 to this memo is a sample format for formal Comments and/or Reply Comments. Please note that the first three pages (cover sheet, summary and table of contents) are required by the FCC Rules only if the body of your pleading exceeds 10 pages in length. You may attach as exhibits or appendices whatever material would be helpful to support your arguments -- e.g., price lists for your on-line services, market studies, economic impact analyses, statements from your management and/or customers, etc. A short affidavit (sworn statement) from one of your key executives stating that he or she has read the pleading and it is accurate to the best of his/her knowledge is a helpful addition, but is not really necessary. Your pleading should be typed on 8 1/2 x 11 paper, double-spaced (except for summary page, which may be single-spaced if you prefer). A signed original and 5 copies should be sent to the Secretary, Federal Communications Commission, Washington, D.C. 20554, in time to arrive by the respective due dates -- September 24, 1987 for Comments October 26, 1987 for Reply Comments Also, copies should be mailed to each of the three FCC staffers shown on the attached Certificate of Service. If you choose to write a letter to the FCC instead of submitting formal legal comments, it should contain essentially the same sort of recitation of your concerns and arguments. Any useful documents can be attached. Attachment 2 to this letter is a sample format for such a letter. Attachment 3 is a sample format for your cover letter to the Congressional recipients, and Attachment 4 is a list of U.S. Senators for each state. Also, please send us a blind copy of whatever documents or letters you prepare, so we will be aware of it in our lobbying efforts. A self-addressed envelope is enclosed for this purpose. Please feel free to give me a call at (703)689-5656 if you have any questions. Attachments (4) ATTACHMENT 1 NOTE: This cover page is required only if body of the pleading exceeds 10 pages in length. Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Amendments of Part 69 ) CC Docket No. 87-215 of the Commission's Rules ) Relating to Enhanced Service ) Providers ) To: The Commission COMMENTS [or Reply Comments] OF [Name of Your Organization] Respectfully submitted, By: [signature] [Typed name and address of your attorney, or whoever will sign the pleading] [Date of the filing] Its Attorney [delete this if pleading not signed by a lawyer] NOTE: This summary is required only if body of the pleading exceeds 10 pages in length. SUMMARY [Insert here a brief summary of the key points made in the body of the pleading -- including a summary of any important data you submit to support your points, such as an impact assessment.] [This summary should be no more than a page or two in length. If you prefer to keep it to one page, it may by single-spaced if necessary.] (ii) NOTE: Table of contents is required only if body of the pleading exceeds 10 pages in length. TABLE OF CONTENTS Page Summary ii I. Introduction 1 II. [First Topic Heading] III. [Second Topic Heading] IV. [etc.] V. Conclusion Appendix 1 Appendix 2 etc. (i) Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Amendments of Part 69 ) CC Docket No. 87-215 of the Commission's Rules ) Relating to Enhanced Service ) Providers ) To: The Commission COMMENTS [or Reply Comments] OF [Name of Your Organization] [Name of your organization] hereby submits its Comments [or Reply Comments] in response to the Commission's Notice of Proposed Rule Making in the above-captioned proceeding, released July 17, 1987. I. Introduction [Begin by providing a description of your organization, and the enhanced services you provide and/or use -- e.g., VAN network service, electronic mail, database access. Explain that local exchange dial-in access is essential to your provision or use of such services, and that your costs (and thus your prices, if you provide computer services) would be significantly affected by the FCC's access charge proposal.] II. [Heading for First Topic] (Underline heading) [Text of your first topic -- e.g., a discussion of the impact of the proposed price increases upon your business, your user base, usage levels and future growth rates, and the like. Refer to any attachments that will help to make your points.] III. [Heading for Second Topic] (Underline heading) [Text of your second topic -- e.g., a discussion of the discrimination inherent in singling out enhanced service providers for access charges, while all other users of the local exchange pay ordinary business dial rates.] IV. [Heading for Third Topic] (Underline heading) [Text for third topic. There can be as many topics/arguments as you wish to make.] V. Conclusion (Underline) [Short concluding statement, urging that the FCC reject the access charge proposal for enhanced service providers. Reiterate harmful impact and other policy problems which this proposal would create.] Respectfully submitted, [NAME OF YOUR ORGANIZATION] By: [signature] [Typed name and address of your attorney, or whoever will sign the pleading] [Date of the filing] Its Attorney [delete this if pleading not signed by a lawyer] CERTIFICATE OF SERVICE I, [name of your secretary], do hereby certify that the foregoing Comments [or Reply Comments] of [Name of your organization] were sent by first-class U.S. mail, postage prepaid, this day of , 1987 to the following: Gerald Brock, Chief Thomas Sugrue, Chief Common Carrier Bureau Policy Division Federal Communications Common Carrier Bureau Commission Federal Communications 1919 M Street, N.W., Room 500 Commission Washington, D.C. 20554 1919 M Street, N.W., Room 544 Washington, D.C. 20554 Ruth Milkman, Attorney Advisor Policy Division Common Carrier Bureau Federal Communications Commission 1919 M Street, N.W., Room 544 Washington, D.C. 20554 [Insert names of any other parties you wish to formally serve copies of your filing upon. For initial Comments, there is no requirement that anyone outside the FCC be served. For Reply Comments, everyone filing initial Comments should be served, but in all likelihood many parties will not comply with this requirement due to the large number of parties involved.] [signature of your secretary] [typed name of your secretary] ATTACHMENT 2 [Your letterhead] [Date] The Honorable Dennis R. Patrick, Chairman Federal Communications Commission 1919 M Street, N.W. Washington, D.C. 20554 RE: CC Docket 87-215, Amendments of Part 69 of the Commission's Rules Relating to Enhanced Service Providers Dear Chairman Patrick: [Insert text. Content should be similar to that suggested for formal comments, but perhaps less detailed. Begin with a short description of your organization and the enhanced services you provide/use. Emphasize impact of the FCC proposal upon your business, your users, etc. Discuss other policy arguments against the FCC proposal, such as the discrimination against computer services and their users which it would create.] Sincerely, cc: The Honorable James H. Quello The Honorable Mimi Weyforth Dawson The Honorable Patricia Diaz Dennis Gerald Brock, Chief, Common Carrier Bureau Thomas Sugrue, Chief, Policy Division, Common Carrier Bureau Office of the Secretary, for inclusion in Docket file [NOTE: Addresses for all these individuals are the same as shown above.] ATTACHMENT 3 [Your letterhead] [Date] Separate letters addressed to each of the following: 1. Your Congressman: The Honorable United States House of Representatives Washington, D.C. 20515 2. Each of your two Senators: The Honorable United States Senate Washington, D.C. 20510 3. Each of the subcommittee chairmen: The Honorable Edward J. Markey, Chairman Subcommittee on Telecommunications and Finance Committee on Energy and Commerce U.S. House of Representatives Washington, D.C. 20515 The Honorable Daniel K. Inouye, Chairman Subcommittee on Communications Committee on Commerce, Science and Transportation U.S. Senate Washington, D.C. 20510 Dear Congressman [or Senator ]: [Explain briefly who you are, and that you are concerned with the FCC's proposal to impose carrier access charges on enhanced service providers. Note that you have filed comments with the FCC opposing this proposal, and that a copy of your filing is attached. Briefly summarize the key points from your FCC filing, and urge the Member of Congress to express his concern to the FCC.] Sincerely, [Attach copy of your FCC filing] ATTACHMENT 4 U.S. SENATORS ALABAMA Heflin, Howell (Dem.) Shelby, Richard C. (Dem.) ALASKA Murkowski, Frank H. (Rep.) Stevens, Ted (Rep.) ARIZONA DeConcini, Dennis (Dem.) McCain, John (Rep.) ARKANSAS Bumpers, Dale L. (Dem.) Pryor, David H. (Dem.) CALIFORNIA Cranston, Alan (Dem.) Wilson, Pete (Rep.) COLORADO Armstrong, William L. (Rep.) Wirth, Timothy E. (Dem.) CONNECTICUT Dodd, Christopher J. (Dem.) Weicker, Lowell P. (Rep.) DELAWARE Biden, Joseph R. (Dem.) Roth, Jr., William V. (Rep.) FLORIDA Chiles, Lawton (Dem.) Graham, Bob (Dem.) GEORGIA Fowler, Jr., Wyche (Dem.) Nunn, Sam (Dem.) HAWAII Inouye, Daniel K. (Dem.) Matsunaga, Spark M. (Dem.) IDAHO McClure, James A. (Rep.) Symms, Steve (Rep.) INDIANA Lugar, Richard G. (Rep.) Quayle, Dan (Rep.) ILLINOIS Dixon, Alan J. (Dem.) Simon, Paul (Dem.) IOWA Grassley, Charles E. (Rep.) Harkin, Tom (Dem.) KANSAS Dole, Robert J. (Rep.) Kassebaum, Nancy L. (Rep.) U.S. Senators Page 2 KENTUCKY Ford, Wendell H. (Dem.) McConnell, Mitch (Rep.) LOUISIANA Breaux, John B. (Dem.) Johnston, J. Bennett (Dem.) MAINE Cohen, William S. (Rep.) Mitchell, George J. (Dem.) MARYLAND Mikulski, Barbara A. (Dem.) Sarbanes, Paul S. (Dem.) MASSACHUSETTS Kennedy, Edward M. (Dem.) Kerry, John F. (Dem.) MICHIGAN Levin, Carl M. (Dem.) Reigle, Donald W. (Dem.) MINNESOTA Boschwitz, Rudy (Rep.) Durenberger, Dave (Rep.) MISSISSIPPI Cochran, Thad Stennis, John C. (Dem.) MISSOURI Bond, Christopher S. (Rep.) Danforth, John C. (Rep.) MONTANA Baucus, Max S. (Dem.) Melcher, John (Dem.) NEBRASKA Exon, J. James (Dem.) Karnes, David (Rep.) NEVADA Hecht, Chic (Rep.) Reid, Harry M. (Dem.) NEW JERSEY Bradley, Bill (Dem.) Lautenberg, Frank R. (Dem.) NEW HAMPSHIRE Humphrey, Gordon J. (Rep.) Rudman, Warren (Rep.) NEW MEXICO Bingaman, Jeff (Dem.) Domenici, Pete V. (Rep.) NEW YORK D'Amato, Alfonse M. (Rep.) Moynihan, Daniel Patrick (Dem.) NORTH CAROLINA Helms, Jesse A. (Rep.) Sanford, Terry (Dem.) U.S. Senators Page 3 NORTH DAKOTA Burdick, Quentin N. (Dem.) Conrad, Kent (Dem.) OHIO Glenn, John (Dem.) Metzenbaum, Howard M. (Dem. OKLAHOMA Boren, David L. (Dem.) Nickles, Don (Rep.) OREGON Hatfield, Mark O. (Rep.) Packwood, Bob (Rep.) PENNSYLANIA Heinz, John (Rep.) Specter, Arlen (Rep.) RHODE ISLAND Chafee, John H. (Rep.) Pell, Claiborne (Dem.) SOUTH CAROLINA Hollings, Ernest F. (Dem.) Thurmond, Strom (Rep.) SOUTH DAKOTA Daschle, Thomas A. (Dem.) Pressler, Larry (Rep.) TENNESSEE Gore, Albert, Jr. (Dem.) Sasser, Jim (Dem.) TEXAS Bentsen, Lloyd (Dem.) Gramm, Phil (Rep.) UTAH Garn, Jake (Rep.) Hatch, Orrin G. (Rep.) VERMONT Leahy, Patrick J. (Dem.) Stafford, Robert T. (Rep.) VIRGINIA Trible, Paul S. (Rep.) Warner, John W. (Rep.) WASHINGTON Adams, Brock (Dem.) Evans, Daniel J. (Rep.) WEST VIRGINIA Byrd, Robert C. (Dem.) Rockefeller, John D. IV (Dem.) WISCONSIN Kasten, Bob (Rep.) Proxmire, William (Dem.) WYOMING Simpson, Alan K. (Rep.) Wallop, Malcolm (Rep.) From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Sun Aug 16 20:41:30 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA19336; Sun, 16 Aug 87 20:41:30 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Sun 16 Aug 87 20:27:10-EDT Date: Sat, 15 Aug 1987 22:37 MDT Message-Id: <KPETERSEN.12326847858.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Telecom@XX.LCS.MIT.EDU Subject: Sample format for letters to FCC regarding modem fees proposal Status: RO TO: Telenet Customers FROM: Phil Walker SUBJECT: Sample Format for Letters to the FCC Regarding the Access Charge Proceeding A number of Telenet customers have requested information concerning the proper format for letters to the FCC regarding the access charge issue, Docket 87-215. We ask that you write to Commissioner Dennis Patrick, copy each of the other FCC Commissioners, and send copies of your FCC correspondence to your Congressional representatives and to the chairmen of the Telecommunications Subcommittees in both the House and Senate. I have enclosed a sample format for letters to be sent to the FCC, including names and addresses (Attachment 1), and a sample cover letter for you to send to your Congressional representatives with copies of your FCC correspondence (Attachment 2). Attachment 3 is a listing of Senators by state. The name of your Congressional representative can be obtained from your local public library or local Chamber of Commerce. Your letter to the FCC should include a description of your organization, the enhanced services that you provide and/or use (such as VAN network service, electronic mail, data base access, remote computing), the structure of your customer base, current service usage levels, projected growth rates, and the probable impact of access charges on your costs, on the price you charge to end users, and on the development and growth of your business. Charts, tables, histograms, price lists, market studies, etc. can all be used as attachments if you choose. Your letter to Congressional representatives ought to reference your FCC submission (attach a copy), urging your Representative to take action to defeat the access charge proposal. Also, please send us a blind copy of whatever documents or letters you prepare, so we will be aware of it in our lobbying efforts. A self-addressed envelope is enclosed for this purpose. Please feel free to give me a call at (703)689-5656 if you have any questions. Attachments (3) ATTACHMENT 1 [Your letterhead] [Date] The Honorable Dennis R. Patrick, Chairman Federal Communications Commission 1919 M Street, N.W. Washington, D.C. 20554 RE: CC Docket 87-215, Amendments of Part 69 of the Commission's Rules Relating to Enhanced Service Providers Dear Chairman Patrick: [Insert text. Content should be similar to that suggested for formal comments, but perhaps less detailed. Begin with a short description of your organization and the enhanced services you provide/use. Emphasize impact of the FCC proposal upon your business, your users, etc. Discuss other policy arguments against the FCC proposal, such as the discrimination against computer services and their users which it would create.] Sincerely, cc: The Honorable James H. Quello The Honorable Mimi Weyforth Dawson The Honorable Patricia Diaz Dennis Gerald Brock, Chief, Common Carrier Bureau Thomas Sugrue, Chief, Policy Division, Common Carrier Bureau Office of the Secretary, for inclusion in Docket file [NOTE: Addresses for all these individuals are the same as shown above.] ATTACHMENT 2 [Your letterhead] [Date] Separate letters addressed to each of the following: 1. Your Congressman: The Honorable United States House of Representatives Washington, D.C. 20515 2. Each of your two Senators: The Honorable United States Senate Washington, D.C. 20510 3. Each of the subcommittee chairmen: The Honorable Edward J. Markey, Chairman Subcommittee on Telecommunications and Finance Committee on Energy and Commerce U.S. House of Representatives Washington, D.C. 20515 The Honorable Daniel K. Inouye, Chairman Subcommittee on Communications Committee on Commerce, Science and Transportation U.S. Senate Washington, D.C. 20510 Dear Congressman [or Senator ]: [Explain briefly who you are, and that you are concerned with the FCC's proposal to impose carrier access charges on enhanced service providers. Note that you have filed comments with the FCC opposing this proposal, and that a copy of your filing is attached. Briefly summarize the key points from your FCC filing, and urge the Member of Congress to express his concern to the FCC.] Sincerely, [Attach copy of your FCC filing] ATTACHMENT 3 U.S. SENATORS ALABAMA Heflin, Howell (Dem.) Shelby, Richard C. (Dem.) ALASKA Murkowski, Frank H. (Rep.) Stevens, Ted (Rep.) ARIZONA DeConcini, Dennis (Dem.) McCain, John (Rep.) ARKANSAS Bumpers, Dale L. (Dem.) Pryor, David H. (Dem.) CALIFORNIA Cranston, Alan (Dem.) Wilson, Pete (Rep.) COLORADO Armstrong, William L. (Rep.) Wirth, Timothy E. (Dem.) CONNECTICUT Dodd, Christopher J. (Dem.) Weicker, Lowell P. (Rep.) DELAWARE Biden, Joseph R. (Dem.) Roth, Jr., William V. (Rep.) FLORIDA Chiles, Lawton (Dem.) Graham, Bob (Dem.) GEORGIA Fowler, Jr., Wyche (Dem.) Nunn, Sam (Dem.) HAWAII Inouye, Daniel K. (Dem.) Matsunaga, Spark M. (Dem.) IDAHO McClure, James A. (Rep.) Symms, Steve (Rep.) INDIANA Lugar, Richard G. (Rep.) Quayle, Dan (Rep.) ILLINOIS Dixon, Alan J. (Dem.) Simon, Paul (Dem.) IOWA Grassley, Charles E. (Rep.) Harkin, Tom (Dem.) KANSAS Dole, Robert J. (Rep.) Kassebaum, Nancy L. (Rep.) U.S. Senators Page 2 KENTUCKY Ford, Wendell H. (Dem.) McConnell, Mitch (Rep.) LOUISIANA Breaux, John B. (Dem.) Johnston, J. Bennett (Dem.) MAINE Cohen, William S. (Rep.) Mitchell, George J. (Dem.) MARYLAND Mikulski, Barbara A. (Dem.) Sarbanes, Paul S. (Dem.) MASSACHUSETTS Kennedy, Edward M. (Dem.) Kerry, John F. (Dem.) MICHIGAN Levin, Carl M. (Dem.) Reigle, Donald W. (Dem.) MINNESOTA Boschwitz, Rudy (Rep.) Durenberger, Dave (Rep.) MISSISSIPPI Cochran, Thad Stennis, John C. (Dem.) MISSOURI Bond, Christopher S. (Rep.) Danforth, John C. (Rep.) MONTANA Baucus, Max S. (Dem.) Melcher, John (Dem.) NEBRASKA Exon, J. James (Dem.) Karnes, David (Rep.) NEVADA Hecht, Chic (Rep.) Reid, Harry M. (Dem.) NEW JERSEY Bradley, Bill (Dem.) Lautenberg, Frank R. (Dem.) NEW HAMPSHIRE Humphrey, Gordon J. (Rep.) Rudman, Warren (Rep.) NEW MEXICO Bingaman, Jeff (Dem.) Domenici, Pete V. (Rep.) NEW YORK D'Amato, Alfonse M. (Rep.) Moynihan, Daniel Patrick (Dem.) NORTH CAROLINA Helms, Jesse A. (Rep.) Sanford, Terry (Dem.) U.S. Senators Page 3 NORTH DAKOTA Burdick, Quentin N. (Dem.) Conrad, Kent (Dem.) OHIO Glenn, John (Dem.) Metzenbaum, Howard M. (Dem. OKLAHOMA Boren, David L. (Dem.) Nickles, Don (Rep.) OREGON Hatfield, Mark O. (Rep.) Packwood, Bob (Rep.) PENNSYLANIA Heinz, John (Rep.) Specter, Arlen (Rep.) RHODE ISLAND Chafee, John H. (Rep.) Pell, Claiborne (Dem.) SOUTH CAROLINA Hollings, Ernest F. (Dem.) Thurmond, Strom (Rep.) SOUTH DAKOTA Daschle, Thomas A. (Dem.) Pressler, Larry (Rep.) TENNESSEE Gore, Albert, Jr. (Dem.) Sasser, Jim (Dem.) TEXAS Bentsen, Lloyd (Dem.) Gramm, Phil (Rep.) UTAH Garn, Jake (Rep.) Hatch, Orrin G. (Rep.) VERMONT Leahy, Patrick J. (Dem.) Stafford, Robert T. (Rep.) VIRGINIA Trible, Paul S. (Rep.) Warner, John W. (Rep.) WASHINGTON Adams, Brock (Dem.) Evans, Daniel J. (Rep.) WEST VIRGINIA Byrd, Robert C. (Dem.) Rockefeller, John D. IV (Dem.) WISCONSIN Kasten, Bob (Rep.) Proxmire, William (Dem.) WYOMING Simpson, Alan K. (Rep.) Wallop, Malcolm (Rep.) Action? From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Sun Aug 16 21:19:20 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA19529; Sun, 16 Aug 87 21:19:20 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Sun 16 Aug 87 20:54:31-EDT Date: Sat, 15 Aug 1987 14:50 MDT Message-Id: <KPETERSEN.12326762799.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Telecom@XX.LCS.MIT.EDU Subject: Telenet analysis(1) of FCC access fee proposal Status: RO Telenet Communications Corporation 12490 Sunrise Valley Drive Reston, VA 22096 THE FCC PROPOSAL TO IMPOSE ACCESS CHARGES ON ENHANCED SERVICE PROVIDERS ISSUE ANALYSIS I. Background Under the FCC's rules adopted in the Second Computer Inquiry (often called Computer II) in 1980, computer-based services such as value-added networks; database services; timesharing and other remote computing services; electronic mail; and voice messaging services were defined as "enhanced services," and firms providing such services to the public were "enhanced service providers" (ESPs). The FCC's rules provided that enhanced services were not a common carrier activity, ESPs could not be regulated as carriers at either the federal or state level, and, thus, ESPs did not pay carrier access charges. In contrast, long-distance common carriers (e.g., AT&T, MCI, and US Sprint) paid carrier access charges for their use of the local exchange dial network to access their customers. Carrier access charges were introduced in tandem with the AT&T divestiture to replace the longstanding system of "settlements and division of revenue" wherein revenues for long- distance telephone service were allocated within the pre-divestiture Bell System and shared with the independent telephone companies. II. Summary of the FCC's Proposal As stated in the attached Notice of Proposed Rule Making (NPRM), the FCC now proposes to apply its carrier access charges to all enhanced service providers (ESPs) who utilize local exchange dial lines to originate or terminate interstate traffic. The FCC's "enhanced service" definition, as discussed above, would encompass value-added networks (VANs) such as Telenet and any type of host-based services provided to external users for a fee. III. Financial Impact on Telenet and PC Pursuit Customers The FCC's rate structure for carrier access charges includes two components: "traffic-sensitive" (TS) and "non-traffic sensitive" (NTS) rate elements. The TS charge varies from one exchange to another, averaging 3.12 cents per minute nationwide. The NTS charge is currently fixed at 4.33 cents per minute for "terminating" access and 0.69 cents per minute for "originating" access. Although most ESP networks, such as Telenet, primarily involve dial-in rather than dial-out traffic (i.e., they operate in an "originating" mode), under the FCC access charge rules ESPs would be charged the higher "terminating " NTS rate. "Originating" rates are only available for traffic that also terminates using dial access -- which ordinary long distance (MTS) calls do, but most ESP traffic does not. Thus, under the FCC's proposal, most ESPs would be subject to total charges of 3.12 + 4.33 = 7.45 cents per minute, or $4.47 per hour, for dial-in or dial-out access to the ESP's network. IV. Policy Arguments A number of compelling arguments can be made against the FCC's access charge proposal. These include the following: A. Impact on Information Services Industry 1. The access charge proposal would greatly increase the cost of on- line computing and information services --hitting users of low-cost services (especially in the home and educational markets) particularly hard. Development of the market for such low-cost services would be stifled, depriving U.S. consumers of affordable information services. In addition, access charges would have a devastating affect on the Bulletin Board System (BBS) community due to the cost-increase caused by access charges. 2. Access charges would have serious indirect effects on the emerging "information economy" and upon U.S. competitiveness in world markets. Such charges would affect the viability and capability of the information service infrastructure that supports U.S. industrial and commercial activities. 3. Access charges would also have a direct negative effect on the U.S. balance of trade. The information services industry is a bright spot in the U.S. industrial trade picture, but its vitality, and thus its ability to continue strong export sales, would be harmed by undermining its domestic market. 4. Contrary to the FCC's claim, ESPs and their customers would experience massive "rate shock" if access charges were applied to them -- just as in 1983, when the FCC noted this effect and decided not to take such action. 5. Imposition of interstate access charges by the FCC would be an open invitation for the state PUCs to do likewise for intrastate ESP traffic. This would further increase the adverse financial impact upon ESPs and their users. In addition, the FCC proposal has undesirable re- regulatory implications, particularly at the state level. B. Impact on Telephone Rates There would be virtually no offsetting benefit to the consumer if access charges were imposed on ESPs. There would be no change in the price of local exchange services, and due to the enormous volume of MTS/WATS traffic relative to ESP traffic, there would be only a tiny potential reduction --estimated at less than one percent -- in the price of long distance voice service. C. Discrimination 1. The FCC proposal singles out computer services from all other non- carrier users who pass interstate traffic through the local exchange. This is clearly discriminatory. Moreover, there is no rationale for sweeping any users of the network into the access charge pool. 2. The massive increase in the cost of VAN service would lead large data communications users to consider alternative means of meeting their needs. Large users with high traffic densities would implement private networks which -- although perhaps more costly than their current VAN service -- would avoid access charges. To the extent VANs lost traffic from such users, their overall unit costs would increase. This would impact small users who have no alternative but VAN service, thereby exacerbating the large-vs-small user discrimination. ACTIONS FOR PC PURSUIT CUSTOMERS FCC Procedures and Recommended Actions for Telenet Customers and Their Users As indicated in the attached NPRM, the FCC's access charge proposal is the subject of a new rulemaking proceeding, CC Docket 87-215. The FCC has scheduled two rounds of written comments in this docket. The Comment period has been extended to September 24 with Reply Comments due on or before October 26. Both before and after these filing dates, any interested parties may discuss the issues with the FCC Commissioners and staff. In addition, interested parties should consider contacting their Congressional delegations and members of the House and Senate Telecommunications Subcommittees since members of Congress can also influence the FCC on behalf of their constituents. A. Written Comments Letters should be addressed to The Honorable Dennis Patrick, Chairman, Federal Communications Commission, Washington, DC 20554, with copies to the Secretary, Mr. William J. Tricarico; the Chief, Common Carrier Bureau, Mr. Gerald Brock; and to each of the other three Commissioners: Commissioner James Quello Commissioner Mimi Weyforth Dawson Commissioner Patricia Diaz Dennis On the letter, indicate "RE: CC Docket 87-215". In addition, we strongly recommend that you send copies of your comments/reply comments and/or any correspondence to the FCC on this matter to your Congressman, your two Senators, and the Chairmen of the House and Senate Telecommunications Subcommittees. (The names and addresses of your Congressional representatives can be obtained from your local library, Chamber of Commerce or your local Democratic or Republican headquarters.) A cover letter should be attached, stressing the importance of this issue and asking the Member of Congress to express his/her concerns to the FCC. The subcommittee chairmen are: The Honorable Edward J. Markey, Chairman Subcommittee on Telecommunications and Finance Committee on Energy and Commerce U.S. House of Representatives Washington, DC 20515 The Honorable Daniel K. Inouye, Chairman Subcommittee on Communications Committee on Commerce, Science and Transportation U.S. Senate Washington, DC 20510 xxxx Please also forward a copy to Telenet's Regulatory Affairs Dept. (12490 Sunrise Valley Dr., Reston, VA 22096), so that we will be aware of it in our lobbying efforts. B. Lobbying Interested parties may discuss the issues in this docket with the FCC Commissioners and staff at any time prior to the FCC's issuance of a "Sunshine" notice stating that it plans to consider the matter at its next Public Meeting --which will probably occur sometime in November or December. It is perfectly appropriate to contact the FCC now if you have any questions about this matter, but meetings and telephone calls for the purpose of lobbying your views are generally most effective after the two rounds of written comments are completed -- i.e., after October 26. If you choose to follow-up your letter with a telephone call, such contacts should be focused on the four Commissioners, the Common Carrier Bureau Chief, and the Chief of the Bureau's Policy Division. Their phone numbers are: Chairman Dennis Patrick 202-632-6600 Commissioner James Quello 202-632-7557 Commissioner Mimi Dawson 202-632-6446 Commissioner Patricia Dennis 202-632-6996 Gerald Brock, Chief, Common Carrier Bureau 202-632-6910 Thomas Sugrue, Chief, Policy Division, Common Carrier Bureau 202-632-9342 From KPETERSEN%SIMTEL20.ARPA@XX.LCS.MIT.EDU Sun Aug 16 21:20:09 1987 Received: from XX.LCS.MIT.EDU by bu-it.bu.edu (3.2/4.7) id AA19538; Sun, 16 Aug 87 21:20:09 EDT Received: from SIMTEL20.ARPA by XX.LCS.MIT.EDU with TCP/SMTP; Sun 16 Aug 87 20:55:14-EDT Date: Sat, 15 Aug 1987 15:00 MDT Message-Id: <KPETERSEN.12326764609.BABYL@SIMTEL20.ARPA> Sender: KPETERSEN@SIMTEL20.ARPA From: Keith Petersen <W8SDZ@SIMTEL20.ARPA> To: Info-Modems@SIMTEL20.ARPA Cc: Telecom@XX.LCS.MIT.EDU Subject: Telenet letter to corporate users on FCC access fee proposal Status: RO LETTER SENT TO ALL TELENET CORPORATE CUSTOMERS July 23, 1987 Dear Telenet Customer: RE: FCC Access Charge Proposal, Docket 87-215 Three weeks ago, I wrote to you about the FCC's recently- announced proposal to apply carrier access charges to enhanced service providers. In that letter, I promised to furnish you with additional information when the FCC released the text of its proposal--which occurred on Friday, July 17. Attached is a copy of the FCC's Notice of Proposed Rule Making (NPRM), along with a Telenet paper that analyzes the potential impact of the access charge proposal, summarizes some of the relevant policy issues, and provides suggestions regarding actions you can take-- including filing of written comments and informal lobbying contacts with the FCC Commissioners and key staff. As outlined in the attached paper, the FCC access charge proposal--if implemented as proposed--would probably force Telenet to increase its public network dial-in rates by more than $4.00 per terminal hour, which represents approximately a 60-100 percent increase for daytime service. Evening/weekend dial access rates would be increased by as much as 500 percent, for access charges have no "time-of-day" discounts. THIS NEED NOT OCCUR. If a large numbers of users and providers of enhanced services express opposition to the FCC proposal, and DEMONSTRATE its serious adverse impact, the proposal can be defeated or altered. It is imperative that action be taken quickly if we are to impact the FCC decision process. The FCC has established August 24 as the deadline for initial formal comments, and September 14 for reply comments. It is possible that these deadlines may be extended, but for now they must be assumed to be firm. Additionally, informal letters may be sent to the FCC, and discussions may be held with the Commissioners and staff, at any time prior to the issuance of a notice that the matter will be considered at an upcoming Commission meeting (which will probably occur sometime in the Fall). I urge you to express your views forcefully to the FCC on this critical issue. This should include both written comments and follow-up discussions with key FCC personnel. If you have users or customers outside your own organization who would be affected by the FCC's proposal, I also urge you to inform them of this proposal and encourage them to express their views to the Commission. Copies of your comments to the FCC should be sent to your Congressman, your two Senators, and the Chairmen of the House and Senate Telecommunications Subcommittees, with a cover letter asking them to express their concerns to the FCC. Names and addresses of the two Subcommittee Chairmen are provided in the enclosed paper. Also, please send us a blind copy of whatever you file with the FCC, so we will be aware of it in our lobbying efforts. A self-addressed envelope is enclosed for this purpose. I cannot overstate the importance of your efforts in influencing the outcome of this proposal. It is very likely the FCC's decision will be made based on their perception of the impact on the public, especially the information services industry and its users. We think that impact will be extremely negative. If you agree, let the FCC know -- and provide whatever data is available to back up your views. Thank you in advance for your interest and support in this critical matter. If we can provide you with additional information or assistance, please contact Phil Walker, Telenet's Vice President and Regulatory Counsel, at 703-689-5656. Sincerely, Paolo L. Guidi