Verizon Ruling May Tax Dial-Up Customers

cellocgw writes "The Boston Globe is reporting that a court ruling in Verizon's favor could effectively allow phone companies to charge dial-up users on a per-minute basis." From the article: "About 68 percent of US internet users now connect via broadband, according to the latest data from Neilsen//NetRatings. That still leaves millions of users connecting the old way, in which modems in their home call local numbers over a telephone line to access the Internet. Precisely how many people were affected by the court ruling is unknown. Good said the number was in the thousands, but that Global NAPs did not have exact numbers and could not disclose the identities of all the companies that relied on Global NAPs for dial-up numbers."

DSL Lines

[Trouvist]

Aren't DSL Lines technically dial-up? They just use a higher frequency, but still dialing a local number and using the phone line... Correct me if I'm wrong, but assuming they can tax the dial-up (Earthlink, AOl,e tc), then could they also tax DSL users?

Re:Why the hell shouldn't they pay by the minute?

[voice_of_all_reason]

Because the end user is already paying for the call. Verizon is trying to get the ISP to pay as well, on the exact same data.

Re:Why the hell shouldn't they pay by the minute?

[ScrewMaster]

You do. Assuming that your cable or DSL modem is turned on 24/7, and you pay $50 per month for the service, it works out to about (5000 cents) / (44640 mins/month) = .11 cents / minute.

Re:What's the status quo?

[terrymr]

but here's what I don't get :

If I'm phone company b and somebody from phone company a calls one of my customers - then phone company a pays me for terminating the call for them.

Verizon is saying if a verizon customer calls a Global Naps customer ... then Verizon should be paid for that call.

Re:Read the ruling...

[DragonWriter]

I dunno. It seems to me both the status quo ante (originating carrier pays terminating carrier) and the status quo post (for dialup ISP calls only, the ISP carrier pays the other carrier) aren't all that sensible.

The user pays their carrier for local calling (unlimited or not, doesn't matter, its paid for, and that's the deal). The ISPs carrier pays a premium to their carrier for a number in a different area than it is physically located in. Why should either carrier compensate the other? The originating carrier knows that the virtual numbers exist, and that's part of the cost of providing local service. Similarly, the ISP's carrier knows that they'll be getting calls from the logically local exchange, that's the whole point of the service they offer. Appropriate payment for the service that is being provided ought to be built into the subscription costs on both ends, and there should be monkeying around with compensatory payments between carriers.

The old way seems like a wide open opportunity for abuse -- as long as you can selectively market your service to someone who is going to receive more than send (like, say, an ISP) you can roll in the dough, taking money from the ISP for the service, and then taking money from the user's telcos for the calls to the ISP. Win!

The way represented by this state regulatory action, though, seems like a way for the big telcos to crank up the costs for regional or national ISPs that want to maintain local access numbers, thus shutting out one of their competitors for internet service.

Both ways seem pretty dumb, but maybe I'm missing something.

Agree with the above. Mod Up.

[lancejjj]

The basic deal is this:

Global NAPs and Verizon agree that the end user's call to the ISP's server is toll-free [to the end user] whether or not the ISP's server is located in the same local exchange area in which the end-user originates the call.

What this means is that Verizon was transporting Global NAPs customer's telephone call to a non-local destination at Global NAP. Verizon was moving the phone call over Verizon phone lines to a distant destination - and to me, it seems reasonable given US telephone rules that Verizon shouldn't have to foot that bill - that's a basic principle of US local telephone service.

Global was merely mis-using its ability to make its phone numbers appear to be local. But Global was really located far away, and Global expected Verizon to bill them nothing, even though Verizon was doing all the long distance bit-hauling.

ISPs that perform this type of telco switch trickery will find that their business model ain't so cool any more. Too bad for them.

What about folks with no alternate means?

[SlappyBastard]

I've lived most of my life in rural areas and companies like Verizon are loath to spend on the infrastructure to bring those areas up to DSL speed (never minding that farmers are among the most likely Americans to buy premium services such as DSL, HBO cable packages, etc when offered).

It's a little selfish for a company to pressure those consumers when the company is unwilling to invest in bringing them into the future.

Re:Why the hell shouldn't they pay by the minute?

[LordBodak]

Umm, no. Local phone service from Verizon is sold as a package-- you pay $x for local phone service. There are no per-minute charges.

If Verizon wants to charge by the minute, they should have to do it for ALL local calls. Billing local calls differently (some by the minute, some unlimited) based on what is on the other end (a computer v. a person) is BS.

Re:So what

[jeeperscats]

I am wondering not if he payed for the phone line, but if he also paid a monthly fee for his dial-up in addition to the minute by minute cost.
In the small rural town where I grew up the first Internet access to come to us hit you really hard with the charges. First you paid $30 for the phone line (which you already had), then you paid $40 for the service, then you paid 10 cents a minute to the ISP, and on top of all that there was no local number so you paid the phone company for the long distance call.