Re: Taxation of Internet

From: Theodore H Mann (
Date: Tue Mar 30 1999 - 19:09:18 EST

There has recently been some discussion about government efforts to
require fees or charges from internet users. I received the following
comments from Congressman Don Young, and thought they might be of general
interest to members of the B-Greek and Corpus-Paul lists.

Dr. Theodore "Ted" Mann
Orchard Lake, Michigan

On Tue, 30 Mar 1999 17:06:51 -0500 "Young, Don (Public Opinion)"
<> writes:
>Thank you for contacting my office to express your opposition to any
>fees or charges on consumer access to Internet Service Providers
>(ISPs). I
>appreciate hearing from you.
>Let me clarify what is actually taking place at the Federal
>Commission (FCC) and within the U.S. House of Representatives with
>regard to
>Internet fees and charges. First of all there is no legislation in
>House of Representatives to assess usage charges on the Internet.
>the FCC has no intention of assessing per-minute charges on Internet
>or of making any changes in the way consumers obtain and pay for
>access to
>the Internet. However, a dispute has arisen in the telephone industry
>whether local calls to Internet Service Providers (ISP) are subject
>reciprocal compensation, and this is an issue the FCC is considering.
>Some background information may be helpful to you. The FCC had a
>before it regarding carrier-to-carrier payments called "reciprocal
>compensation" and whether or not dial-up calls to the Internet are
>interstate calls and subject to federal jurisdiction. Reciprocal
>compensate a local telephone company for completing a local call that
>placed by one of its competitors customers. For example, if a
>customer of
>Phone Company A makes a local call to a phone customer of Phone
>Company B,
>Phone Company A must compensate Phone Company B for handling the last
>leg of
>the call. The payment is based upon negotiations between the two
>or on a decision of the state regulatory authority. Thus the issue
>payment from one company to another, not between the company and the
>customer. Using the same example for Internet traffic, if the
>dials up the Internet over the phone lines of Company A, and the ISP
>served by Company B, the question is whether A must compensate B for
>completing the local portion of the call.
>Recently, the FCC determined that since a substantial portion of
>traffic is interstate it is therefore subject to federal jurisdiction
>preserved the rule exempting the Internet from interstate access
>fees long distance carriers pay to the local carriers to complete
>The FCC also stated that the jurisdictional decision does not
>whether calls to ISPs are subject to reciprocal compensation. It has
>that telephone companies may have existing contracts or agreements
>indicating that ISP-bound traffic should be subject to reciprocal
>compensation. Further, a state commission, exercising its authority,
>have imposed reciprocal compensations for this traffic. In either
>telephone companies are bound to their existing interconnection
>contracts as
>interpreted by state commission.
>However, petitions for court review have been filed in response to the
>decision determining that Internet traffic is interstate. Local
>companies want the FCC to overturn reciprocal compensation rulings by
>state regulatory agencies. They contend that if Internet traffic is
>under federal jurisdiction then state regulatory commissions should
>not be
>able to require reciprocal compensation, which is a state issue. This
>be another issued to be resolved in the future.
>Consumers are concerned that regardless of any decision or judgment,
>local telephone rates will still increase as a result of reciprocal
>compensation for Internet traffic. It is assumed that increased
>costs will naturally be passed on to the consumer. You will be
>to know that only the state regulatory commission can allow an
>increase in
>the local rate. The telephone companies cannot raise rates without
>from state regulators.
>Again, I appreciate hearing from you. If you have any further
>questions or
>comments about this or any other matter, please feel free to let me
>Your thoughts and views are always welcome.
>Congressman for all Alaska

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