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Verizon Ruling May Tax Dial-Up Customers 147

Posted by Zonk from the no-pipe-for-them dept.
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."
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Verizon Ruling May Tax Dial-Up Customers More

Verizon Ruling May Tax Dial-Up Customers

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  • more information (Score:5, Informative)

    by stoolpigeon ( 454276 ) * <bittercode@gmail> on Friday April 28, 2006 @07:02PM (#15224610) Homepage Journal
    if you are like me, and found that reading the article didn't really help explain the situation, i found that this legal document [findlaw.com] really helped. i didn't follow every bit of it, but it does present a surprisingly readable history of the case and the issues.

    • Re:more information (Score:5, Funny)

      by Anonymous Coward on Friday April 28, 2006 @07:07PM (#15224640)
      Since nobody is going to read that document anyways, can you please provide us an inaccurate and sensationalized summary please?
      • Verizon has purchased all extent copyrights of GNU software and is legally entitled to eat your firstborn child.

      • Some inside skinny (Score:5, Informative)

        by isdnip ( 49656 ) on Friday April 28, 2006 @11:25PM (#15225660)
        For the record, I have been involved with some, uh, related cases, and know Virtual NXX backwards and forwards....

        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 .2-.3c/min).

        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
        • That was the most informative thing I've ever read on slashdot.
    • hehe, and when i still don't have clue after reading both?

      Guess i wait for a best guess on who is billing who for what ;)
    • From the court decision ...

      "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..

    • 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

    • That was an unwieldy but interesting read. Correct me if I'm wrong, but interexchange VNXX traffic means the endpoints are not local to one another. Since the VNXX traffic ends at the point of connection to the Internet, but this seems to be the condition in dispute:

      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)

    by Anonymous Coward
    You know - a tax on the stupid.

  • DSL Lines (Score:2, Insightful)

    by Trouvist ( 958280 )
    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:DSL Lines (Score:5, Informative)

      by Geekboy(Wizard) ( 87906 ) <[spambox] [at] [theapt.org]> on Friday April 28, 2006 @07:08PM (#15224651) Homepage Journal
      No, DSL lines are not dialing a number. They are point to point links.
      • If it was a true Point-to-Point then wouldn't it be always connected as long as each end has power? Why do they say that the DSL modem periodically needs to redial?

        • Re:DSL Lines (Score:3, Informative)

          by Chirs ( 87576 )
          If "they" say that, then "they" are full of it.

          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)

          by Anonymous Coward
          The DSL modem does not need to "redial". There is no dialing happening in the first place. The DSL line operating at Layer 1 (and 2 I believe) is established 24/7 between the end-user's modem and the DSLAM at the Central Office. The only thing that you see that is similar to dialing is the PPPoE connection made by the router (and is commonly part of a modem/router combo) but it only operates at Layer 2 and above.
        • And you believed them???
        • If your DSL connection is PPPoE and not DHCP, your modem will occasionally get logged out and need to reauthenticate to get back online. This is probably the "redialing" you're talking about.
        • I'm not sure how often "periodically" is, but as long as my power doesn't go out, I get uptimes of 1.5 years on my dsl (at which point, the power goes out).

          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)
          • (hint: if they own the copper, they don't know a god damn thing)
            And if they don't own the copper, they don't know a god-damned thing about how ADSL works in the real world.

            Running an ADSL ISP ain't like dusting crops, boy...

        • 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.

        • If you have a static IP, the only time your modem should need to reconnect (not "dial") is when you have some kind of line difficulty or turn it off.
        • Why do they say that the DSL modem periodically needs to redial?

          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
      • A DSL link is a point to point link only to the DSLAM; from there it is typically on an ATM network. BellSouth's BroadBand Gateway product allows PPPoE customers to have sessions to different providers simultaneously on a single DSL circuit, although I don't know if anyone supports it in the real world, and I'm not really sure how it can even be ordered (the BBG docs describe it however).
    • actualy No DSL lines are not dial up and have never been dial up. A Dsl line is a Digital signal that is layered on the line but the Signal is intercepted by a DSLAM ( Digital Service Line Access Multiplexer )and never reaches the PSTN ( public Service Telephone switch ). so DSL is a completely different service. However there have been some dsl modem in the Past that have emulated a dail up modem but they never dailaed a true telephone number they dial a vertual access channel and path.

      Today most telco's g
    • ISDN is just digital phone service. Works like a normal phone line, you can even dial normal phone lines from it. It just happens to be a digital link. It, of course, offers greater flexability and features than a normal phone line, but same idea. Point to multi-point circut switched. However it's flexabilty is one of the reasons it's so costly.

      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
    • What frickin' rock you been under for the last few days? Net Neutrality?

      They will be taxing all internet access soon.

  • title misleading (Score:2, Informative)

    by chriscappuccio ( 80696 )
    GNAPS and others are using a loophole of sorts to provide free 800#s within LATA boundaries. The phone companies finally started to close the loophole, presumably they want to boost their own dialup revenue since they will be the only dialup alternative in the very small towns where it is not financially feasible for a real company to put in dialup modems.
    • But whats sick is Verizon also wants back pay for the year that this company was using the loophole. And Verizons bullshit about "this is entirly the companies fault, not ours".

      Telephone companies are bad about charging outragious fees and expecting people to pony up.. /Where I work we recently expanded into a space that had a lot of old sprint equipment left there by previous tenents we asked sprint to remove it. They did and now want $2K without our approving for such work to be done.
      • As a CLEC, GNAPS _should_ be able to use the loophole for now and forever. CIC 0110 is a loophole built into the phone system by the phone companies for their own use, so there's no reason a CLEC can't get unbundled free minutes. It's kind of like when you used to be able to dial 10-110-01-NPA-NXX-XXXX and call for free from any payphone in Dearborn, MI. I remember for like 6 or 8 months, before 4 digit CICs, 10-110 gave you free calls from home phones and payphones. I used to dialup into speedway.net f
    • Rule states that you can't meter data calls on those 800 numbers it isn't really a loop hole. If i remember correctly.
  • I can now finally say "no" when asked, "Arent' you glad you used dial?"
  • Well, goodbye Internet, we hardly knew you. It's been a long, strange and wonderful ride.

    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.
    • Thanks for the link... I still use a Wildcat BBS every day, and I contend that someday we'll see a return to the dialup BBS, when needed for email that's more secure from gov't snooping.

      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
  • Are local calls currently free for American phone users?

    Either the TFA is extremely poorly written, or this story is wholly unremarkable.

    • Re:What's the status quo? (Score:3, Informative)

      by fm6 ( 162816 )
      As it says somewhere in the FAQs, Slashdot is a U.S. web site and assumes its readers know stuff that U.S. readers know. And yes, most residential users in the U.S. don't pay per-minute charges for local calls.
    • local calls are. calls out of your area are not. global NAPs had a method that allowed isp customers to make out of area calls without having to pay the charges. verizon basically said that global naps needed to pay those fees, global naps disagreed. this goes back 4 years i think, and the amount owed has grown and finally global naps was shut down as they keep losing in court and not paying.

      • Re:What's the status quo? (Score:4, Insightful)

        by terrymr ( 316118 ) <.terrymr. .at. .gmail.com.> on Friday April 28, 2006 @07:25PM (#15224732)
        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.

        • i don't understand all the document i linked up at my top post-- but it looks to me like gnaps is not disputing that what they do would generate charges, but that due to it being isp traffic it is exempt for some reason. it also looks like they've tried to get around an arbitration ruling by saying the arbitrator did not have jurisdiction, after going to them for arbitration. i may be missing something and i'm not familiar with exactly what the nxx and vnxx stuff does, but after reading it i'm not so sure

        • Re:What's the status quo? (Score:5, Informative)

          by Shishak ( 12540 ) on Friday April 28, 2006 @07:54PM (#15224882) Homepage
          For local calls there are 2 carriers involved. The originating carrier and the terminating carrier. For local calls the originating carrier pays the terminating carrier a small amount per minute to terminate the call. This is called Reciprical compensation

          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
    • They are not free. Phone companies in America keep forgetting this detail.
    • The problem here is that local ISPs were reselling Global NAPs' dial-up service, and providing virtual POPs with seemingly local numbers that really were trunks to the actual POP in Boston. Verizon wanted their pennies per minute for being the terminal end of those long distance calls, and the court gave it to them.

      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
    • Remember, this is a question a non-American isn't going to know the answer to, POTS line billing in foriegn countries is traditionally time-based.

      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)

    by Neon Aardvark ( 967388 )

    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.

    • Especially with your 300 baud modem!

    • Re:So what (Score:1, Informative)

      by Anonymous Coward
      Yeah, OK. Did you also pay $30+/month fixed for the local phone service?

      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)

        by jeeperscats ( 882744 )
        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.

  • Read the ruling... (Score:5, Informative)

    by storm_guardian ( 687284 ) on Friday April 28, 2006 @07:36PM (#15224786)
    Much as it's nice to blame Verizon for everything, it looks as if they have a case this time. Basically, this is about virtual numbers where the ISP has no physical presence in a local calling area, but instead pays the phone company to route the calls elsewhere. Effectively, the ISP is asking Verizon to route calls from (say) Cape Cod to Boston without paying usage charges. As the original article implies, the unfortunate side-effect of the ruling is that people in rural areas may have to pay long distance charges to access their ISP.

    • 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

    • 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
    • "As the original article implies, the unfortunate side-effect of the ruling is that people in rural areas may have to pay long distance charges to access their ISP."

      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
  • Taxes are imposed by the government. If a phone company overcharges for dialup, people will switch to alternate means. I know that's not possible in some remote areas, but that would also explain high prices.

    • What about folks with no alternate means? (Score:4, Insightful)

      by SlappyBastard ( 961143 ) on Friday April 28, 2006 @08:25PM (#15225044) Homepage
      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.

      • Hell, Verizon won't even bring its customers into the PRESENT. As I mention in another post, the reason I'm stuck with *26k* dialup, half the industry standard for dialup speeds, is because Verizon won't fix their local DMS station that's been broken for over 20 years (according to the hapless tech dude in charge of it, it was defective from day one).

  • DirectTV Tivos and Series 1 Tivo's affected also (Score:4, Interesting)

    by jucevic ( 416197 ) on Friday April 28, 2006 @08:07PM (#15224951)
    So am I now going to have to pay an additional amount every time my Tivo calls home? I have DSL already, but havn't taken the time to hack my DirectTV boxes. Is the Series 1 Tivo with a life time subscription that I gave my parrents now going to cost them a monthly fee?

  • Unnatural monopolies? (Score:3, Interesting)

    by SonicSpike ( 242293 ) on Friday April 28, 2006 @08:57PM (#15225175) Journal
    Has anyone ever noticed that the majority of the current monopolies in the US are a result of the government?

    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 enough to wonder why things are the way they are.

      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.

      • Me? I'm 24 and want the government out of my life and out of my markets! Things tend to come out better that way.

        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.
    • It seems like you do not even understand what the phrase 'natural monopoly' means. You don't need governmental help to impose a barrier to entry to the local telephone market. Nobody is going to build a second, parallel phone network, even though government regulations do not prevent anyone from doing so.
      • No one is prevented from building another phone network? Really?

        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 /. love to hate; Microsoft. Technically they are a monopoly having over 80% of marketshare.
        • I don't think they will just let you run wire (or pipe/whatever) over large tracts of public and private land.

          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
          • I seem to recall that most states have laws that actually prohibit competition for the phone networks. In other words you can't directly compete with the phone company by running wire and providing a dial-tone. Protectionary measures are taken to ensure they make a profit.

            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)

    by kopo ( 890010 ) on Friday April 28, 2006 @09:41PM (#15225335)
    The author of the article didn't understand his research. He said that according to Nielsen Ratings, 68% of US internet users connect with broadband. That's not true.
    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%.
  • This is just another nail in the coffin of PSTN service. The days of land line phones is coming to an end. Over the past few years more people are electing not to have standard telephone lines installed in their homes, instead they are using cell phnones exclusively or using IP based telephones over broadband connections. The local bell companies had better start finding another source of revenue. Land lines will disappear just like pay phones have gone virtually extinct. Same thing happened with long
  • Phone company may charge subscribers for services rendered by means of a traditional billing system. News at 11.
  • It just sounds weird that customers are paying. I mean if I set up a 800 #, it means I'm footing the charge for each incoming call.

    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)

    by Spazmania ( 174582 ) on Friday April 28, 2006 @11:09PM (#15225620) Homepage
    So here's the story. Its been a while since I've heard it so I may have some of the details wrong, but this is what happened:

    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 where I live, your only choice is dial up, satellite or service through your cell phone. I only have a cell phone and no land line service. Verizon will take for ever to get DSL in my area; and the cable provider is some Mom and Pop outfit I never heard of that doesn't offer Internet service, so I don't subscribe anyway because I don't have a TV.

    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
  • Verizon offers its own Internet service to every exchange; it's not surprising that it wants to make sure that no other ISP can do the same. Strictly an anticompetitive move.
  • Looks like that retro 80s craze is here to stay!
  • This per minute fee is waived if you sign up for Verizon Dialup service. Kapow!

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