Verizon Ruling May Tax Dial-Up Customers 147
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."
more information (Score:5, Informative)
Re:more information (Score:5, Funny)
Re:more information (Score:1)
Some inside skinny (Score:5, Informative)
Remember the 1988 "modem tax"? That's exactly what this is about. The Massachusetts DTE has called for that exact charge, technically called originating access, to be applied to ISP-bound calls, if the modem is in a central location (as it always is) and the caller is not physically in the modem's local calling area. So the modem tax doesn't apply to callers who are local to Quincy (GNAPs) or another big modem bank, but would apply to most of the state, where the carrier hotels aren't.
Now the sorded history in a nutshell...
Global NAPs set up shop after the Telecom Act when its owners' ISP wanted to expand its local calling area. The normal way to do this was to buy Foreign Exchange lines, which NYNEX sold for about $20/mile/T1 (23-24 channels). The Telecom Act allowed open entry for competitors, and said that for local calls, the calling LEC (local exchange carrier) would pay the called LEC for its half of the call. This is called reciprocal compensation. Bell Atlantic actually asked the FCC for this; in a 1996 filing, they demanded it, and said that if CLECs (competitive LECs, what GNAPs is) didn't like it, they should look for customers who get more incoming calls, like ISPs. Really. So GNAPs took them at their word.
Now Foreign Exchange lines are normally charged based on the distance between switches, not rate centers (billing points), and CLECs have one switch covering a lot of area, so the mileage is zero. That's what GNAPs, not to mention MFS-Worldcom, MCI, AT&T, Level 3, and various other companies, did. They could thus provide "local" dial-in numbers to ISPs. And they billed the incumbent telcos for reciprocal compenastion.
Well, the incumbents were caught off guard. Not only didn't they like the Internet, but they really didn't expect it to catch on, and were blindsided by all of this dial-up traffic going to competitors. So they asked to change the rules, and get rid of reciprocal compensation on ISP-bound calls. Global NAPs was the lightning rod for this in Massachusetts, where it was the biggest modem-serving CLEC and its leadership, frankly, had a rather "in your face" style. The Republican-appointed state Commission (DTE) ruled against them in 1999, saying "no reciprocal comp for ISP-bound calls". (The "telecom commissioner" of that era has left the DTE, and has been spotted consultling for Verizon. Duh.) The Republican-appointed FCC in 2001 adopted that as a national policy, capping ISP-recip at $.0007/minute (about a quarter of the typical voice rate of about
Then around 2003, the Romney DTE pulled a stunt on GNAPs. CLECs and ILECs interconnect via contracts, which are arbitrated by state Commissions. Verizon decided to put in new wording that FX (and Virtual NXX, what GNAPs is -- it's FX when the LEC doesn't have live customers where the number is putatively billed as) calls are "toll" calls subject to "access" charges. GNAPs objected, but the DTE let that language in. And then said that while federal law allows CLECs to adopt other CLECs' contract terms, GNAPs couldn't, because arbitration is unescapable (a rather strange interpretation of the law). GNAPs said, however, that the FCC's assertion of federal authority over ISP-bound calls -- that's how they got rid of recip on a nationwide basis in 2001, over CLEC objections -- meant that the state couldn't declare them to subject to intrastate toll access charges. Most states have held that way, and I think the Fourth Circuit Court of Appeals has upheld.
So it was rather odd that the First Circuit ruled for Verizon, though it was on some legal technicalities that GNAPs wasn't really prepared for. That left GNAPs with a theoretical $45M or so back bill for this "modem tax" access charge. They wouldn't pay, so Verizon pulled the plug.
Level 3 and some other CLECs still have different
Holy moly (Score:2)
Re:Some inside skinny (Score:2)
Or, in the famous words of Michael Quill, The Public Be Damned.
The DTE is a wholly-owned subsidiary of Verizon.
The good news is that this might have been a wake-up call for the public and legislators, who might start looking at the DTE's
Re:more information (Score:2)
Guess i wait for a best guess on who is billing who for what
Re:more information (Score:2)
"Global NAPs cannot point to any language in the order that explicitly preempts state regulation of access charges for the non-local ISP-bound traffic at issue."
While it may not affect this particular case Federal Law 108-435 states... "No State or political subdivision thereof may impose any of the following taxes during the period beginning November 1, 2003, and ending November 1, 2007" `(1) Taxes on Internet access.
Looks like Global NAP needed better lawyers..
Re:more information (Score:2)
The state telling companies what they can charge is not a tax on Internet access.
Re:more information (Score:2)
Re:more information (Score:3, Informative)
If I read that right, Global NAPs acts as a telephone service provider and offers "local" numbers that aren't actually physically in the exchange area they are logically in (mostly to ISPs). Because (for reasons I don't understand) with these local-but-not-really calls the originating local carrier pays the receiving local carrier on a per minute basis, Global NAPs has previously been getting paid by Verizon by the minute for these calls.
This ruling allows a state regulatory action to stand which would ch
Re:more information (Score:1)
Global Naps has to dial one or more additional connection points from its inital access point to gain a connectionto the Internet. Somewhere there is a connection that terminates in a different exchange than where it was initiated (i.e. a tol
It's like the lottery (Score:1, Funny)
DSL Lines (Score:2, Insightful)
Re:DSL Lines (Score:5, Informative)
Re:DSL Lines (Score:1)
Re:DSL Lines (Score:3, Informative)
DSL links are always connected. Your computer (or router/firewall) may need to periodically refresh/obtain a DHCP lease, but the link itself is always up.
Re:DSL Lines (Score:1, Informative)
Re:DSL Lines (Score:2)
Re:DSL Lines (Score:1)
Re:DSL Lines (Score:2)
try getting a real isp, one that knows what they are doing. (hint: if they own the copper, they don't know a god damn thing)
Re:DSL Lines (Score:2)
Running an ADSL ISP ain't like dusting crops, boy...
Re:DSL Lines (Score:1)
I'm pretty sure when they say "redialing" they mean re-establishing a PPoE session, which involves reconnecting with the username and password, but not dialing a number; since people are more comfortable with a familiar word, they continue to call it dialing, even though it makes no sense.
Your modem doesn't dial a number with DTMF over DSL -- technically, what happens really should not be referred to as "dialing", because it's not going over a voice link.
Re:DSL Lines (Score:1)
Re:DSL Lines (Score:2)
Because they are lying to you, and lying is easier than telling the truth. The truth is that they use PPPoE to authenticate you, and the "always on" "instant on" "never dial" connection disconnects and has delays while it "dials" the PPPoE server to log in. The sessions hang, modems reboot, and things like that. The session must be reestablished then, and it takes about 2 seconds or so. This also means that if you don't do anything for a
Re:DSL Lines (Score:2)
Re:DSL Lines (Score:2)
dsl terminates at the DSLAM, which makes it point to point (now, the IP traffic going over the dsl is not point to point).
Re:DSL Lines (Score:1)
Today most telco's g
You are thinking of ISDN lines (Score:2)
DSL is a point-to-point connect. You get the line and sepcify where the other point will be. Could be an ISP, could be your work, if they have a DSLAM, etc. It then
Re:DSL Lines (Score:2)
They will be taxing all internet access soon.
title misleading (Score:2, Informative)
Re:title misleading (Score:2)
Telephone companies are bad about charging outragious fees and expecting people to pony up..
Re:title misleading (Score:1)
Re:title misleading (Score:2)
Not glad I used Dial up (Score:1)
All right, all right... We get the message already (Score:2)
I guess we can always all go back to Fidonet [fidonet.org], using 33.6bps modems. Fortunately, the necessary software [mbse.dds.nl] can be installed on Linux.
Unfortunately, I am not entirely joking. It's either Fidonet, or creating a some sort of cooperative (not-for-profit) ISP, based in part on WiFi technology.
Re:All right, all right... We get the message alre (Score:3, Interesting)
Which is why I was disturbed by this statement from the developer (I didn't see any link to this person on the site, maybe you can direct me):
"[will not be implemented]: OLR: include private email area in download packets. See also global wish for private mail areas."
Erm... without that, it lacks one of the most =fundamental
Profits and corporations. (Score:2)
The problem is not that they are making a profit: I have no problems with companies making a profit (even an indecent profit). The problem I have is when a large company like Verizon is (a) screwing customers to make even more profit and (b) creating a two-speed Internet to extort money out of
Re:All right, all right... We get the message alre (Score:1)
What's the status quo? (Score:1, Flamebait)
Either the TFA is extremely poorly written, or this story is wholly unremarkable.
Re:What's the status quo? (Score:3, Informative)
Re:What's the status quo? (Score:3, Informative)
Re:What's the status quo? (Score:4, Insightful)
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
Re:What's the status quo? (Score:2)
Re:What's the status quo? (Score:5, Informative)
For long distance (LD) calls there are 3 carriers involved. The originating carrier, the terminating carrier and the Inter eXchange Carrier (IXC). For LD calls the IXC bills the customer and pays the originating carrier and the terminating carrier a slightly bigger amount per minute. This is call Access Charges.
The problem arose when the FCC determined that Internet traffic, including dialup is considered interexchange traffic and is therefore considered LD calls. The way GNaps operated they established local phone numbers in every rate center in a LATA. That would allow the dialup user to dial a local (aka toll free) phone number. Just because the call is 'local' doesn't make it truly local. The call, according to the FCC is 'long distance' and because of that the originating carrier (Verizon in this case) is owed money by the terminating carrier (Global NAPs) that was acting as an IXC.
One of the issues in the law suit was that Verizon was billing GlobalNAPs access charges based off the MA state tariff while GNAPs said they should be billing off the FCC Federal Tariff. The MA state tariff is an order of magnitude more expensive than the federal tariff.
In any event, I had less than 24 hours notice and this 'event' knocked 5000 of my dialup users offline for almost a day. Luckily I could port my numbers to another carrier quickly
Re:What's the status quo? (Score:1, Flamebait)
Re:What's the status quo? (Score:1)
Re:What's the status quo? (Score:2)
So now, these virtual local ISPs have a problem: They've either got to get real Internet POP centers in these rural towns, or pass the per minute long distance charges they'll have to pay onto th
MOD PARENT UP - this is a good question (Score:2)
In the US, people usually have the option of paying a flat rate charge for local calls or a plan that buys xxx number of minutes and a per-minute charge for minutes used over and above that. (for local toll calls and LD... uh, let's not get into that)
IMHO, this is a major reason why the online user population growth in the USA in the early years drastically ex
So what (Score:2, Funny)
Years ago when I used dial-up, I had to pay per minute, because local calls aren't free in my country.
It never did me any harm. It just added to the excitement of downloading 100MB porno mpegs.
Re:So what (Score:2)
Re:So what (Score:1, Informative)
In the US just to have a phone number you pay $30+ which generally gives you local phone service, local meaning your neighborhood not necessarily the entire city. Anything besides that costs additional to the $30+.
Re:So what (Score:3, Insightful)
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.
Read the ruling... (Score:5, Informative)
Re:Read the ruling... (Score:3, Insightful)
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
Agree with the above. Mod Up. (Score:2, Insightful)
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
Re:Read the ruling... (Score:2)
Not necessarily. I used to live in a rural midwest area (until about 4 months ago), even when Verizon was the local monopoly (CenturyTel has it now), and even before then when GTE was the local monopoly. They all offered what they termed a "Metropolitan Calling Plan". It coupled the local town's calling area with the calling area of the three
Not a tax (Score:2)
What about folks with no alternate means? (Score:4, Insightful)
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:What about folks with no alternate means? (Score:2)
Re:And it is Verizon's fault (Score:2)
I've complained about noise on my line for years too, and they say nothing is wrong even when it's dropping out to where I can't talk to the repair rep.
Worst of all, Verizon inherited GTE's protected monopoly status from the MaBell era, so competition is not allowed in Verizon territories. Hardly an incentive to fix anything, especially when they now own most of the market. (I've seen figures
Re:And it is Verizon's fault (Score:2)
Re:It's tough for the consumer (Score:2)
Re:You guys out west? (Score:2)
DirectTV Tivos and Series 1 Tivo's affected also (Score:4, Interesting)
Unnatural monopolies? (Score:3, Interesting)
Natural monopolies don't usually last very long because in a true free market, it is almost impossible to limit barriers to entry without governmental help.
The government should stay away from the market and allow the markets to run their course.
You must be young, or trolling. (Score:2)
Or old enough to know and simply troll against The Way Things Work(tm)
Either way, I give you credit for seeing things the way they are.
Re:You must be young, or trolling. (Score:2)
The last time the US gov had a lassie-faire mindset it caused the Industrial Revolution. A capitalistic free-market economy is a vehicle for progress and the IR proves it. Imagine what kind of progress could be made with our current technology if regulations were minimized.
Laissez-faire is (Score:2)
It is a French phrase meaning "let do, let go, let pass." First used in the eighteenth century as an injunction against government interference with trade, it became used as a synonym for strict free market economics during the early and mid-19th century. It is generally understood to be a doctrine opposing economic interventionism by the state beyond that which is perceived to be necessary to maintain peace and property rights.
You can read more in detail here:
http://en. [wikipedia.org]
Re:Unnatural monopolies? (Score:2)
Re:Unnatural monopolies? (Score:2)
It is my understanding that in order to be a "utility" in most locales one must be granted that status through local/state governments. I don't think they will just let you run wire (or pipe/whatever) over large tracts of public and private land.
Thus a local/geographic government-granted monolopy mustc be secured.
Let's take a monopoly that we all here at
Re:Unnatural monopolies? (Score:2)
You don't need to be a utility to run wire over large tracts of land, as long as you get everyone's permission. Of course, that is rather difficult. Without the government, nobody could build a phone network.
So the point is that natural monopolies really don't tend to be a big deal even though they are pretty rare, the government-granted monopolies on the other hand are problimatic.
Well, the gover
Re:Unnatural monopolies? (Score:2)
Wiondows may have taken years and millions of dollars (marketing dollars don't count) to develop, but there are other products that work just as well (and some would argue even better than Windows). Mac OS and Linux are two that instantly
**NOT** 68% (Score:3, Interesting)
The Nielsen information for 2005 [internetworldstats.com] says that 68% of Americans use the internet - not necessarily through broadband. No statistics are given for broadband specifically, but they're definitely much lower. According to this article [com.com], US broadband usage will reach about 62% in 2010, and was 29% in 2004. I don't know about current stats, but it's probably near 35-40%.
Another nail in the coffin of PSTN service (Score:2)
News at 11 (Score:2)
Shouldn't the ISPs be paying? (Score:2)
If the ISP creates virtual numbers at a call center/carrier (or whatever they called it), the ISP should be footing the bill that connects where the virtual number is routed from.
if ISPs don't want to foot the bill and want customers to instead, the isp should then tell the users the real phone number to call instead of the virtual number.
[user]=====[virtual #]=====[where isp is
The Real Deal (Score:5, Informative)
First, rewind about 2 decades to the breakup of AT&T and the very beginnings of competitive local phone service. Or rather what would have been the beginning... the regional bell operating companies (RBOCs) didn't want any competition.
A couple companies said, "Look, we're going to sell phone service to this office building over here. You Mr. RBOC have to provide us with access to the local phone network." The RBOCs like Verizon said, "We don't want to. These bozos should have to buy service per-minute just like the long distance comanies. Otherwise they'll flood our network with free calls and the residential consumer who doesn't have a hundred phone lines will get stuck holding the bag."
That didn't fly in court so the RBOCs came up with a hairbrained scheme called "reciprocal remuneration": Anybody could be a competitive local exchange carrier (CLEC) but the carrier who originates a call would have to pay the carrier who receives the call a per-minute charge. Its "fair" since either company has to play by the same rules, but if you cherry-pick that office building over there, their outbound calls will exceed the received calls and you, Mr. CLEC, will pay a mountain of money to Ma Bell. So sorry. Buh bye.
This twistedly clever strategy backfired. Do you see the problem yet?
Along comes the commercial Internet. Suddenly there are scores of companies with a very special need: They have to receive a large number of phone calls 24 hours a day while originating none. Its an ISP with dialup modem banks. And along come companies like Global NAPs who know the phone company rules. What do you think they did?
That's right. They went and wired the ISPs on the cheap -- sometimes as little as a tenth of what the RBOC charged. Why would they do such a thing? Because all the calls were inbound. Every time Joe Blow dialed his ISP and stayed connected for 18 days, GNAPS got to rape Verizon for a per-minute charge.
And good for them. Verizon deserved it. Its always great to see a monopoly eat crow.
After a number of successively more effective attempts, Verizon has closed the loophole.
Since the AT&T breakup there have been buildings called "tandems" where the long distance carriers connect their phone lines to the RBOC. Each local calling area has several of these tandems. Now, if you're a CLEC you can go into Verizon's tandems and connect to Verizon. They pay their half, you pay yours and you can trade calls with all the phones served by that tandem. Which isn't the whole local calling area. If you want the whole calling area you have to go to all the tandems.
Verizon, of course, will happily sell you a "virtual" presence in the other tandems where they carry the traffic back to the one tandem you connected to. They'll even sell you a virtual presence in all the tandems and carry your calls back to a connection in another state. For a fee.
Bad news for GlobalNAPs. No more reciprocal remuneration, and worse they have to buy expensive infrastructure to multiple tandems or else pay for a virtual presence.
They didn't want the gravy train to end so they went to court. They lost.
Out in the boonies (Score:2)
I currently use Verizons 'National Access' Internet service with my LG VX4500, it provides 16 k/bits synchronous service that puts it about 3 times the speed of
Is anyone surprised? (Score:2)
Oh boy! (Score:2)
Yes, but of course (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:3, Insightful)
Re:Why the hell shouldn't they pay by the minute? (Score:3, Informative)
Re:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:3, Interesting)
That depends on how it's advertised. 'Unlimited' is not the same as 'within reason'. If AT&T advertises a per-minute charge and THEN people sign up, then I agree, no reason why not.
Re:Why the hell shouldn't they pay by the minute? (Score:3, Insightful)
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:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:3, Insightful)
Re:Why the hell shouldn't they pay by the minute? (Score:1)
No, that's not right: with most providers, You're charged what's called a flat fee, no matter how many minutes you occupy the line. You pay $50 a month, even if you unplug your modem, leave it off for 29.9 days that month, and transfer a total of 5 bytes of data during the whole time.
Your calculation of 0.11 cents / minute is called an average; it would be correct to say "You are charged $50 of month, which is an AVERAGE of 0.11 cents / minute."
However, it's a monthly fee that's paid, not a per-mi
Re:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Why the hell shouldn't they pay by the minute? (Score:2)
Re:Is PPPoE dialup? (Score:1)
Re:Moses: Set my people free. (Score:2)
Nice knowing you.
Re:Verizon can goto hell. (Score:2, Flamebait)
I agree because, as everyone into structured programming knows, the GOTO is considered harmful.
Re:Verizon can goto hell. (Score:2)
Note that their competitors in the area will sell you a PRI for $600/month w/10 DID's. $1500 for a T1 is a ripoff.... Note that the competitors don't use Verizon's network in this way for anyhting. The T1's are are virtual ATM circuits over a county-wide fiber network under the competitors but actual copper lines for Verizon.
Re:US lags behind the rest of the world (Score:2)