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Modem Tax - Urban Legend Come True? 197

Phluck writes "It seems that the modem tax myth might come true, the FCC is trying to decide whether ISPs should pay a fee for using the telephone network. Naturally this tax would probably be passed on to customers. Check out the whole story here on ZDNet. " Scary - I can remember when these chain mails went around.
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Modem Tax - Urban Legend Come True?

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  • The implementation details escape me. It really does sound as though they want to charge extra for a special type of phone call. Sure I tie up the phone line calling my ISP, but I tie up a phone line when I talk to my girlfriend for 2-3 hours at a stretch. And I already pay for that phoneline.

    How can they tax a *type* of phone call. If I call up my local ISP's modem with my voice line because I like the squeal, I'm not accessing the internet. Does that count?

    Finally, they should tax 911 calls. The demand for them is much more in-elastic. If they tax modems, the demand (and thus their tax base) will shrink. Demand for 911 won't change much (like gasoline or liquor) based on price. This would work out well because I use my modem much more than I use 911 [note - sarcasm]

  • could this give the phone companies some kind of edge in the market so they could drop their monthly prices significantly, since they would be getting a per minute charge for your dialin anyway?
  • Another thing to keep in mind is that most of the RBOC also offer internet access themselves. This is just one more way for them to force the local ISP's out of business.
  • Rural areas generally don't have cable service because the density doesn't pay off well enough for cable companies to put in the wire. Current DSL hardware has a limit of approximately 3 miles from the central office, which also rules it out for most rural customers.

    However, you are wrong about poor neighborhoods getting lousy access, at least where I live. I live on the 'wrong side of the tracks' -- the poor east side of the town (of approx 300,000 population) I live in. I had my choice of either DSL or cable modem (I chose DSL, because I run server processes and the cable company basically makes that impossible through use of NAT for anyone who isn't paying big bucks for their 'business grade' service). I also had no troubles using a 56k modem.

    On the other hand, most of the people I work with live in the ritzy western suburbs, and all of the new development areas generally are on digital multiplexers, which means that DSL is just plain unavailable, and also means that they generally have trouble connecting at 56k (some report that they can't get higher than 26.6 even in a new house and with a good modem like a USR Courier). Many of those on the west side who are not on digital multiplexers are too far from their central office to get DSL. Being in an old neighborhood around here means it is much more likely you have a nice copper wire all the way back to the central office and more likely you are close enough to the central office to get DSL. Furthermore, large parts of the western suburbs don't even have digital cable service yet (which is a prerequisite for cable modem access). The reason for this is that the cable company is having trouble installing the infrastructure to get service out to all of the new development on the west side.

    So the reality is that it is not necessarily true that poor neighborhoods will get lousy access.

    Its not that big business probably wouldn't like to ignore the poorer areas... In this case the realities of infrastructure availability just happen to favor the poorer areas.

  • New Zealand is currently suffering the possibility of a similar fee.

    But then again it's being imposed by the monopoly player in the telecom's market. They intend to charge a 2c (NZ) / minute charge on all calls to ISP's that do not travel through a new (and lower priority) network access prefix.

    They say the fee is an incentive to ensure that residential data users use the new number. (PS The same companies ISP doesn't actually use the new number even though it seems to, at least according to the info I saw which I do trust.)
  • I'm confused by people calling this a "tax". This is a fee, paid to the local telephone companies, not a tax.

    Do the phone companies incur additional costs as the result of people using local phone lines to access ISPs? I have no doubt that they do. But the rules of the game have been "local service is free" virtually forever. If they change by introducing some kind of additional fee for using local networks, I suspect it will serve to drive those still using phonelines for internet access to other technologies such as cable modems.
  • by Xenu ( 21845 ) on Tuesday October 19, 1999 @01:00PM (#1601639)
    A lot of people are assuming that the Phone Company's costs are directly related to the number and duration of the subscriber's phone calls. This is false.

    66-75% of the Phone Company's cost of providing local service is the provision and maintenance of the wires between the subscriber and the central office. This is not usage sensitive.

    The sizing of the usage sensitive components of the telephone network is based on providing an acceptable level of service during the peak calling hour of the day, which is usually during business hours. Off-peak usage of these components essentially costs nothing since the capacity is going to be there whether or not it is used.

    Think of it as a highway/motorway, that is made of some miracle material that can't be damaged by traffic. The highway is designed to be large enough to carry rush-hour traffic at a reasonable speed. You can drive your car around the highway for 16 hours a day without costing the highway owners any money, as long as you stay off the road during rush-hour.

    The telephone companies had made a ton of money from the installation of second phone lines for Internet access, far in excess of what little money has been spent on reengineering central offices with congestion problems.

    Guess how many phone company executives in the USA have an engineering degree? One. That should tell you something about the business.

    The cost of providing service has been declining for years due to advancements in technology and layoffs of skilled labor. The phone companies have invested their monopoly profits in cellular systems, cable systems and foreign ventures, just about everything except their core business. Service quality levels have been declining and the phone companies show little or no interest in providing new services or upgrading their infrastructure.

    The Bells should be broken up and forced to compete in the real world.

  • Um - I think my point WAS that the telcos are doing this to pad their bottom line :-)

    where I live (the Bay Area) there are competing TV spots for DSL on at least every hour

    Here at least I think they've realised that there's money to be made from data and if they don't the cable companies will - here there's even the spectre of other 3rd-party companies who are coming in and actually laying residential fibre - potentially competing in the phone, data and cable biz too - this competition can only be good for us - yesterday's announcements from the east coast of SBC spending big and putting in residential fibre so that DSL can reach more houses is yet another indicator of this same trend

    In short the telcos are worried - and that's good for us comsumers!

  • With this kind of tax they might as well outlaw internet usage for low income and people who live in rural areas.

    I live in a rural area this means no chance for any type of access other then through analog modems. It would be like being punished for being poor

    hmm maybe thats what they want
  • I agree with his point that the system was not meant to accomodate everyone being connected 24x7. That's why they came out with xDSL, ISDN, etc... infact for what your paying for your second phoneline (in MA its about $25/month) and your ISP (again about $20 a month) you have the monthly cost of ADSL which is 640k/90k so why pay $40/month for 56k/33.6k when for the same price you can get 640k/90k? This is not meant to be an ad be if your interested Flashcom offers the service I mentioned. Bryan ;-) Without hope/fear what driving force do we have?
  • The local calls aren't `free' - they're just charged at a flat rate (either per call or per month). This actually reflects the costs MORE accurately than per-minute charging - the expensive bit is setting up the call in the first place. A modern exchange can handle all the lines being in use at once quite happily - but can only handle an average of one call per line per hour. If anything, it should be voice calls which are surcharged - they put a heavier strain on the contended parts of the network!

    Incidentally, the UK's `free' ISPs get almost 70% of the call charge - you pay `Free'Serve nearly £2 per hour for daytime use! (About $3.)

    Ultimately, any sort of per-minute charging would cripple Internet usage, as the UK's abject failure in that area demonstrates. A simple per-megabit tax on leased lines, OTOH, would be much fairer, without kneecapping e-commerce in the US the way BT's charges have kneecapped the UK.
  • Excuse me for my 19-year-old ignornace but: RBOC?
  • In effect, I already pay a per-minute fee for Internet access (It's about 1p per minute off-peak). So does just about everyone else in Europe. We have to pay for local calls.

    I really envy Americans their unmetered local calls. If a telco offered me flat rate net access, I would jump at the chance.

    I also live in a fairly rural area. The chances of getting DSL or Cable access here are remote.

    People are right to be concerned about this. It will discourage many people from getting access. Particularly poorer people. But large companies don't seem to care about people without a lot of economic clout. One of the major reasons for having a government is to protect the rights of the weaker/poorer members of society. I wonder if anyone will consider poorer people when they make this decision? Or will the large telcos get their way again. Anyone want a bet?

  • As a part-owner/network administrator for a regional ISP, I can say that this is never going to happen. ISPs already pay the Bells exorbitant amounts of money for access lines (in the form of PRIs or CT1s...prices range from $400 to $1000+ for 23 digital phone lines).

    You can even make the point that ISPs help subsidize the increased amount of traffic, as we have to pay the Bells around $400/mo per T1 (for local loop charges).

    Will they take away reciprocal compensation? (if ISPs are CLECs, they are technically supposed to get paid X cents per minute that a customer is connected...this is how the free ISPs of the UK are funded) Yes. Will they do a complete 180 and start charging a tax for internet consumption? No. The only reason it is being 're-examined' is to keep the Bells happy.

    The government isn't about to screw with the economic juggernaut that is the Internet. The Internet is almost singlehandedly responsible for our current state of economic bliss. We aren't going to tax it. Ten years from now, when it is common to everyone, you will probably see a sales tax on ecommerce, but that's the extent of any Internet taxes you'll ever see.
  • By the way, they also charge you if you want no long distance carrier.

    They may charge extra if you decline, because it might be they sell your number to telemarketers. Everytime I get a new number from H^HBellSouth, I get a rash of telemarketers, especially those who try to sell me long distance. I was keenly aware of this coincidence, because I work nights and sleep days. Imagine a dozen fucking phone calls a day from determined telemarketers about every hour or two when you are trying to sleep.

    No law protects day sleepers. I asked for my number to be unlisted, private, don't share. Well, buddy, they simply ignored that and published my number in the white pages again, year after year. Years of torment from telemarketers and you too could have an impressive volcabulary of crude words expressing displeasure at these sales drones. They even retaliated against me by cancelling my long distance service for "fraud."

    There are phone providers that forbid telemarketing, period. So, now my BellSouth line no longer has a ringer on it, but is a dedicated connection to the internet. My cellphone provider does not sell or allow telemarketing. This is why I do business with them.
  • Hmmm... if the FCC imposes (or enables telcos to impose) a $.10/minute connect fee for all internet connections, that'd be great amunition against spam. Much like Fax Spam, the end-user would be paying out of pocket to receive unsolicited crap. Just trying to be optimistic :-)

    On a more pertinent note, how would telephone companies even be able to meter this? To their telephone switches, a modem signal is just a REALLY noisy voice call. If they started monitoring calls to differentiate between a modem call and a voice call, we'd be looking at some pretty severe privacy issues as well

    The only system which might work would be a special prefix of some sort, like hash-5-0 or something, to signal that you'd be making a data connection--but this, of course, could be circumvented.

  • As a customer of Pacific Bell, a Californian telephone service, I have the option to either enroll in an unlimited local calling plan or a per-minute local calling plan. For anyone that uses the Internet, the extra cost of the flat-fee plan is obviously the way to go. For others, the per-minute charge might be appropriate. What this means is that I am paying for the privilege of using their phone lines for unlimited periods of time.
    An FCC mandated tax is definitely not necessary. The FCC needs to let the free market decide. If phone companies start loosing money on providing local calls, let them raise rates. They could raise the price of unlimited local toll calling, but I doubt they will since competing local phone companies will no doubt step in and offer lower prices.
  • T1 prices to end users haven't dropped much in the last 15 years even though the costs to the Phone
    companies is now a fraction of what it was.

    These high T1 costs are already a modem tax to ISP's. Now if they want to drop the costs to something reasonable then this would be understandable, but as it is now high speed internet connections (T1+) are the most profitable service the belco's provide.

  • Here in New Zealand the telecom here (Monopoly!) is all setup to implement a modem/Internet tax because it claims that Internet users are tying up their lines, and making dangerous congestion, which might not allow 111 (like 911, but with a 1) calls through.
    These calls should already HAVE the highest priority on their old aging network, but the fact is that because it is a monopoly, it can charge us all 2 cents a minute (after 10 hours, yeah right) for data calls, claiming congestion, so that it doesn't have to bother upgrading it's old falling apart network.
    BUT WAIT!, there is a way to not pay this charge, by using an ISP that uses it's very own special 0867 number, that it gets from Telecom. Now they say they arn't going to charge for these "numbers" (which probably don't do anything ANYWAY) but there isn't a thing to stop them from doing it a year down the track.
  • If anyone can come up with good reasons WHY this should happen, then speak up. Otherwise, I think this will just choke the market badly. Although, we are moving onto Cable and DSL right? But mostly DSL, so this will affect DSL greatly. I just don't see why they have to do this. Would it be too much traffic? I don't think so.
  • The problem with your arguement is that you are basing it on technology that is not predominant anymore and is becoming less so every day.

    Consider calls from me to my ISP:

    1. Every house in my neighborhood has it's own dedicated pair of wires reguardless of how many are actually in use. These wires don't cost more just because they are in use.

    2. On the other side of my local switch is a fiber optic cable that leads all the way to town. The incremental cost of an additional call going through that cable is miniscule.

    3. My ISP does NOT lease hundreds of individual incomming lines but instead has a small number of high capacity lines (essentially a couple of T1s) and the "switching" happens on his own equipment. These high capacity lines run in parallel with his local switch and as a result the number of calls coming into the ISP does NOT impact the number of other calls that can go through that same switch.

    4. My ISP pays thousands/month for these lines and pays again for the data going back out to the rest of the internet.

    It seems to me that the only significant additional cost here is at my local switch and that the telco. is more than making up for that with the fees they charge my ISP.
  • I hate to say it, but there is a justification for the tax. After all, why should people who aren't using modems, or are using them less, pay for upgrades the phone company makes only for the modem users. It's unfortunate, but modem users should pay their fair share, and if they use the lines more, they should pay for that usage.
  • Back and forth, this idea seems to be passed. All I can say is I am glad my internet connection is free.
  • The Phone Company. Either for a POTS line, or through your ISP for the DSL pair. Time to make some genteel noise on the FCC comment page.
  • by WillAffleck ( 42386 ) on Tuesday October 19, 1999 @09:13AM (#1601670)
    Seriously, the problem is the FCC method. If it's a per minute rate, that's insane - we're not making long distance calls in the "true" sense.

    But, a flat rate charge? Well, since it's for access for rural areas, kids in school, and seniors on low incomes - Yes. Why should we be exempt?

    Face it, we're turning into a three-tier society.

    Tier 1: Internet Elite - the rich and technologically enabled, with SDSL, T1/T3, and equivalent - we don't care about these charges.

    Tier 2: Internet Enabled - the urban upper and middle class and the suburban upper class, with low-grade DSL or Cable Modems, or at least 56K. They know they get a pretty good deal and that it can't continue much longer.

    Tier 3: Internet Handicapped - the urban poor and the suburban/rural middle and lower classes. They have to go to the library to get decent modem access, or pay large chunks of their disposable incomes to do so. They continue in their downward spiral in this uberelite society.

    So, yes, put farmers and homeless kids on the Net. Although I think we should require old folks get a NetNanny filter on their ISP access, so they can't send spam to the rest of us or access any voters sites - make them truck down to the library for that, to keep them out of our hair ...

  • s this really true? I would think that for the typical modem user, given the sporatic data transfer nature of Web browsing (little happens after the page is locally cached until you go to the next), that a regular phone call moves way more total data over the same period of time.

    But the lines still tied up even when there is no traffic. Plus modem users tend to use the line for a lot longer. Most conversations don't last an hour.

  • by TheDullBlade ( 28998 ) on Tuesday October 19, 1999 @09:49AM (#1601673)
    The prices on POT lines are based on the way they work without ISPs: occasional short uses, not long-term continual connections. You are on a time-share system, and you are insisting on your right to use it 100% of the time.

    The phone system is not built to support half of the population being continually connected across town. With the rate internet use is growing, this could easily happen in a few years.

    If you are connecting 24/7/365, you should be paying for a line from you to the other end of the connection, because that is what you are using (aside from all the unnecessary switching hardware in between that you are also taking up). If that means paying ten times a normal second-line fee, so be it (after all, 24/7 is considerably more than ten times the normal usage). It's either the people creating the drain on the system who pay for it, or everybody else. Constant internet connections using telephone lines are a horrible abuse of a system meant for other things.

    Direct connections may be more expensive right now, but only for the end user. When you consider all resources consumed, you realize that direct connections can be much cheaper, because they are designed for this purpose. When prices fairly reflect the resources used, the system will change to use the minimum resources. Everyone will start using cable or DSL, or some other dedicated service, the price will drop to or under that of a dedicated POT line, connections will be much faster and more reliable, and the situation will be better for everyone.

    Up with the modem tax!
  • by Anonymous Coward
    So, yes, put farmers and homeless kids on the Net.

    I'm sure your intentions are good, and you may actually believe that's what will happen (your other posts don't sound that naive, though), but a quick look through the history of such government programs will show you that it's far more likely that the net effect will be to move more people from tier 2 to tier 3. The only time such things actually filter down to the poor is after the 'rich' markets are saturated; then some sort of low cost service is introduced in order to keep expanding business.

  • I'm inclined to think that this will be shot down due to the sheer influence of upscale voters getting off on cheap access to the Internet, but it's hard to underestimate the stupidity of a federal bureaucracy, esp. when large companies are throwing vast amounts of money at legislators.

    I guess it kind of depends on how the ISPs would pass the charge onto the customers - if they passed the charge directly to the customers, then the heavy users would get dinged really big (and might end up going to a always-on connection), whereas the casual user might just note a little rise in the cost. The ISPs might spread the cost out among all their users, in which case everybody would notice the price of the service had gone up a bit. In either case, would there really be all that much of a difference in cost to the average user?

    In either case, I would expect even more pressure for people to move to always-on net connections. What would cause the most PR damage is that the people who don't have such connections available (rural, ghettos, etc) would be forced to pay the extra - and they're exactly the people who can't afford such "regressive taxes".

  • That was for taxes on Internet sales. This is totally different - it isn't even a tax. This is an additional fee the phone company will charge the ISPs.


  • I'll prefix this with a request not to be flamed by modem users across the US.

    Local telephone calls are free in the US because the are not taxed per minute, and because the average person only uses the phone for X number of hours per month. Because of this the telephone companies only have to maintain Y number of circuits per customer (Where Y is significantly less then 1). (And because of regulations and such, but thos can change if phone companies stop making a profit; A likely outcome of having to maintain equipment that can handle continuous connections by every customer.) When you make a long distance charge, you pay a local network fee (Well, not really, but it gets passed on to you by the LD carrier) which is typically very small. ($0.01 or less) and a fee to the LD carrier.

    This would be a senseable thing to transfer over to modem space for the following reasons:

    The phone company doesn't want to/can't aford to (according to them) allow continuous local connections to the increasing number of internet users at the bargain price of their monthy phone bill. (It really is a bargain compaired to any other kind of dedicated connection, and it wastes a pais that could be used for DSL :))

    The average home user uses less the 40 hours of internet time a month... Not a large cost considering the ISP is only charging $5-10/month for service

    This will cause a transition to DSL/Cable for people who want to be connected longer then that, and will likely cause expansion in those networks providing high speed access to more people.

    We may not want to pay this fee (Not a tax because it doesn't go to the government) because, lets face it, we'd like to not pay more then we have to ever. But this is a fair proposal that will probably work out well in the long run.

  • by Phexro ( 9814 )
    Anyone know if DSL would be affected by this? I wouldn't think so.

    This is an interesting angle. Since I get my DSL line and service from the same company (USWest with service), how would they pay for this? They own the local telephone network. If the telcos don't have to pay, wouldn't this be seen as encouraging monopolies - eg, a small ISP must pay per minute, while the telcos don't.
  • Actually, I live in rural New England and I have to pay by the minute for local calling as well. The idea that I may have to pay MORE on top of that is just disgusting. I'm already paying .5 to 2.2 cents per minute just to be connected, why should I start paying yet another metered rate on top of that?

    I think I can safely say that the chances of anyone in any rural part of the world getting DSL or Cable access is slim. Even if these kind of services were offered, I doubt that the connection speed or line quality would be much better than the "good old 56k" lines that already exist. There really are very few options (other than moving to non-rural areas) that we have in this situation.

    I'd have to say that depending on how I was charged, I may just find it easier to drop my local ISP and get my internet fix at work. I think it boils down to a simple "how much are these suckers willing to pay for access" mentality on the part of the ISPs.

    Though, it does make me wonder how my ISP would handle it, because my ISP IS my phone company! They would probably be very happy to take my money to pay themselves for connecting me to their lines.
  • tax is the wrong word for this, what will happen is that ISP's have to pay for the calls made through them, this is not money going to the government.

    The government has to allow this though. Odds aer it will cause rates to go up, most ISP's are not running in the black, or if they are it's not with a high profit margin.
  • The isps already pay for lines don't they? Basically you'd be paying for your phone line, then extra to use that line..connecting via modem is EXACTLY the same as placing a regular phone call. Why should you pay more for it?
  • Here in New Zealand, it isn't a government agency, but our main telecommunications provider, Telecom, that has decided all people using dialup ISPs though a local telephone number have to pay a per-minute charge, unless they use a specific range of telephone numbers. [] The charge is 2 cents per minute, after the first 10 hours in each month. Up until now, all local calls from residential telephones in this country have been free.

    The reason, according to Telecom, is that it will allow them to "manage internet traffic on the [telephone] network more efficiently", though a number of people believe that this will allow Telecom to degrade the quality of the connections people get to their ISPs.

    Telecom's points out that calls to the new phone numbers will be able to be routed automatically so that they are able to balance the load between telephone exchanges, and to "pioritise voice calls in times of network overload or emergency". I'm fairly sure that a number of existing residential telephone exchanges don't support this feature.

    Telecom's reason for deciding to apply a charge is that it will "encourage" customers to change to the new phone numbers.

    Telecom also provides an ISP service of their own. It is interesting to see that the telephone number used by the Telecom ISP (starting with 0863...), is different to that of other ISPs (0867...). Another ISP points out [] that that this may potentially allow Telecom to re-route competing ISP's phone calls through different pipes, so it can be degraded as Telecom wishes while its own customers' traffic is managed differently.

    However, Telecom has guaranteed that there won't be any disparity in the connection quality for the two sets of telephone numbers. There is a clause to this effect in the agreement (DOC file) [] that is signed between Telecom and the ISPs.

    The other main telecommunications provider in this country, Clear, also provide an ISP service and are going to provide rebate to their customers who get charged this 2 cent/minute charge. Other smaller ISPs are essentially being forced to comply against their will.

    This move by Telecom also raises a number of questions:

    - What is their stance on modem to modem calls made between friends? Will Telecom apply the charge for these calls? If so, does that mean that they monitor all calls for modem traffic?

    - How do that know that a local number you're dialling is or isn't an ISP? I assume that an ISP will be given away by the fact that they have potentially 1000 lines for a given telephone number.

    In summary, Telecom has provided a new range of numbers for ISPs to use, and will charge people if they don't use them. Some think that this is the thin end of the wedge for charging for local calls, and will allow Telecom to provide a substandard service for other calls to other ISPs. Other people claim that the change will enable Telecom to provide a better service, due to them being able to manage the calls more efficiently.
  • What does it matter? Whether its voice or data, the phone does the same thing. It takes sound (from modems and people alike) and carries it over the line. Why doesn't anyone remember that a modem phone call is still just a regular phone call? And for those people who would like to tax modem calls, then lets tax fax machines as well, since they don't transmit anything understood by humans.
  • by Trick ( 3648 ) on Tuesday October 19, 1999 @04:07PM (#1601688)
    My God -- you'd think the last place you'd find this kind of "journalism" would be Slashdot. The "modem tax" is as much a myth as it always has been, and I'm honestly disappointed that this site has seen fit to breathe any new life whatsoever into it.

    All the article says is that the long distance companies are lobbying for the current exemption to access fees that is given to ISPs to be lifted. They've been doing this for years, and every time the FCC sees through their twists of logic and denies it. The FCC has also stated, very clearly, that they have *no* intention of lifting the exemption. That doesn't stop the telcos from complaining about it, but the proposal isn't any nearer to happening than it was the first time I saw a "modem tax" chain letter.

    The FCC *knows* modem calls are *not* long-distance calls. The telcos might have a leg to stand on if all of the switching equipment (i.e., routers) on the 'net were theirs, but it's not. It doesn't make sense to allow them to charge for the use of equipment that doesn't belong to them. Fortunately, the FCC realizes that, and will probably deny them again and again until they give up asking.

    Relax... as usual, the "modem tax" ain't gonna happen.

    Consult, v. t. To seek another's approval of a course already decided on.
  • If it's a per minute rate, that's insane - we're not making long distance calls in the "true" sense.

    Most telephone traffic used to be carried over T1 lines (26 channels at 56k, I believe). So if you make a long distance call across the US, you pay a certain rate for use of that network.

    If you dial in to an ISP locally, you're still using a 56k connection through the telco's network that spans the continent. Shouldn't the charges be similar?

  • Ah, gotcha. I didn't realize they were separated.
  • Holy shit, i pay $40 a month for cable modem AND STILL HAD TO PAY A $100 INSTALL CHARGE! Ugh!
  • > this strikes me as just another of telcos not > wanting to adapt to new technologies

    If such a thing were to happen, flat rate or what not, how would this affect the cable modem services and the like? They don't use phone lines like ISPs use. Could this possibly spread the influence and the area of these new techs?

    - 30 minutes drive from cable modem access in any direction and they STILL haven't gotten to my town....
  • no worries here.
  • As long as the FCC exists, phone companies will continue to lobby for handouts... it's their version of $$$MAKE MONEY FAST$$$ (another notorious pre-web chain letter).

    As others have pointed out, these fees are banned until 2001; unless there's a reason to expect this ban to be lifted at that time, this simply gives people something to panic about after Y2K.


  • What is an ISP? Hmmmm?

    If I setup my Linux box to allow dial-ins by my friends, so they can have internet over my Cable Modem (or T1 or what have you), does that make me an ISP? Would the telco want to charge me?

    There's nothing in my contract stating I can't use my line 24/7..

    The simple fact is that the telco's have been able to modify their contract so as to charge ISP's more for a long time. It's really simple, as all they have to do is to charge for usage rather than a flat rate. They don't do this, because they don't care that much. The ISP's have to already install bunches of lines, and the telco is making money hand over fist thereby.

    Besides, I no longer trust anything I read on ZDNet...

  • If it's a tax on you to your ISP, then no. If it's the ISP to the net, then yes. Cable modems only use cable between a user's house and the ISP (or some switch in between). They obviusly don't lay a cable down all the way to everyone else's computer.

    And I hear you on the patchy cable modem availability. Testify, brother!
  • We're very quickly entering an era where computers with Internet access are no longer a luxury, but are a requirement to access certain goods and services. Consider, for example, Arizona's DMV (I think it was Arizona) that is offering services over the web. I'm sure it would love to offer services over the web exclusively if it could, with web-enabled kiosks in place of the old public offices for people who can't get a computer of their own. While you're not required to own a computer with a web browser in such a world, it would be very much in your own interest to have one. (Much like a car -- there's no explicit requirement to own a car, but most people feel they need one because life without one is pretty painful, at least in most places in the US.)

    Lets not forget Voice over IP and other such technologies either: Your only line might be a data line.

    On a separate angle, consider that traditional ISPs are already starting to feel the heat from cable modem and DSL services -- neither of which affects the capacity of the POTS network and therefore would likely be exempt from the proposed "tax". Instituting a tax such as this would only make life worse for these traditional ISPs, possibly slowly forcing them out of business. Where does the business go? At least some of these customers will upgrade to DSL or cable-modem when their current ISP goes away.

    Who's providing the DSL and the cable-modems? Phone and cable companies -- and these days, the line between the two is getting blurrier and blurrier. OpTel, my cable company (and ISP, since I have a cable modem), would love to be my phone company as well. (They offer both phone and cable services in my apartment complex.) Also, doesn't AT&T have a stake in TCI? It would be interesting to see the list of companies that are lobbying for this tax, and what they stand to gain as traditional ISPs fall into obscurity/insolvency.

  • Okay, so if we believe the journalistic hype, the FCC is considering additional charges for ISP usage. Let's look at a few things:

    Per-minute fees - The only people who have the equipment anywhere near in place to monitor online usage to the minute are the ISPs (or online providers) themselves. The telco can't easily prove if a line is being used for voice or data or both without listening to it. I seriously doubt that telcos are going to install the equipment to monitor usage in this way since they really have no way to check and correlate calls with every ISP that a modem user could dial in to. If a per-minute fee is imposed, it will be imposed on the ISPs who would pass on the charge itself plus a penny or two for "processing" fees. Once ISPs are charged for per-minute fees, the feds will need additional staff to track and process such billing as well, which would require capital expenditure, and we all know what that means...

    Flat fees - As with the per-minute fees, the first question is who to charge. If we send the charge to the ISPs, they'll pass it on to their customers as higher monthly access rates. Users who are online more than 60 hours per month (to pick a number out of the air) may not mind because they're online so much, but Gramma & Grampa who are online less than 3 hours a month will probably decide to drop the service. If we send the charge to the telcos, how is the telco going to prove that a particular telephone user is also a dialup internet user as opposed to a cable modem internet user or corporate LAN internet user? Also, how is the telco going to justify spreading this charge over telephone users who never access the internet?

    Further barrier 1, corporate LAN access - Like the per-minute fee, the ISP is the only place where the access can be reliably tracked. Corporate America has some pretty expensive lobbyists that they can throw around to combat any additional fees imposed on them. High-revenue companies that rely on internet connectivity will not stand by as their revenue streams are significantly reduced by any additional charges like this.

    Further barrier 2, internationalization - It seems that the US Government is viewing the internet as a US-only enterprise again. No single governing body can legislate over the internet since no single body's jurisdiction completely covers the physical location of the internet. Sure, a majority of connections go through Virginia, and mine is to a local provider in Wisconsin, but what about everyone in .au or .il or .es or .jp or any other TLD other than .us?

    Further barrier 3, internet time - innovation on the internet surpasses legislation speed by light years. By the time a bill like this would pass through to law, the more avid internet users will find other means to access the internet that avoid these charges.

    In short (too late!), I seriously doubt that any kind of "modem tax" would be enacted any time soon.

    <DennisMiller>But, I could be wrong...</DennisMiller>

  • Oh, and no that doesn't include installation of cable tv (which is saving me $5 off the cable modem price).
  • Right, but as far as I know, the "digital" connections, like your analog voice calls, are considered virtual digital circuits. An ISDN "path" is opened between your end and the destination end. Resources are allocated by the phone company to accomodate that path. With a full packet-switched network, there is no virtual circuit. The "connection" only exists in the endpoint devices. Everything else is just raw data packets that get shuffled to their respective destinations.

    Or is that not what you were objecting to?
  • It started off with 2 points and someone considered the comment insightful.

    The point of my post wasn't a "me too!" post but, rather, it was a suggestion that the original poster express his argument without resorting to insults.

    I could care less what sort of score it made. If a moderator feels it's overrated, it's their perogative to change it.

    You, however, are not a moderator, and, in fact, aren't even a user. Your opinion is doubly meaningless to me.
  • The average home user uses less the 40 hours of internet time a month... Not a large cost considering the ISP is only charging $5-10/month for service

    Where in the heck do you get these figures? As owner of an ISP I can say that average usage is quite a bit higher, as are prices.

    And I'm in the area /.'s think is sooooo ancient: Kansas.

  • Those of us who don't quite have 56k?

    (you're going to say: get a better modem)
  • > With DSL, though, I think everything is built for 24/7 connectivity...

    Well, there's nothing to prevent the telcos from still metering you artificially. Deutsche Telekom in Berlin offers METERED ADSL access, where they concocted some sort of packet metering system. Purely artificial, purely greed! Companies used to a metered charge model simply can't let go--it's like giving the goose that lay the golden eggs to the bum at the corner.
  • by Anonymous Coward
    Sorry, but as a consumer I have to say that it's not my problem if the telco's business model is screwed up. Just as it makes no difference to me whether or not Best Buy made any money on that $999 computer I bought last week.

    The telcos have been chasing people off of dedicated circuits for years-- ask anyone in the broadcast industry. Now they're complaining that all the long-term traffic on their voice circuits is making them lose money. Sorry, I can read quarterly reports as well as anyone. What they really mean is they're not making as much money as they used to.

    What the FCC needs to do is tell them "deal with it." And instead of running to the government, what the companies need to do is realize that if they made the cost of DSLs and ISDNs reasonable, maybe more of that traffic would move on to them!

  • government of the corporations, by the beaurocracies, for the money...
    why does the Friendly Candy Company have to meddle in consumer issues any more than it already does?? This isnt so much an issue of Big Goverment as much as it Corporate Government. To wit, as is so common in the Age of Clinton, the U.S. government chooses and backs whatever policy the highest bidder asks for ... in this case those sorry ass mofos we call the telco's... when im elected king things will be different... for one i'll be king ;)
  • I know I'm getting a pretty good deal with my cable access, but I see no reason why it can't continue much longer. Bandwidth and cable modems are going down in price, and the cable was already there anyway. It's a good deal for the huge improvement in performance, but not too cheap to pay for itself.

    I think cable is going to keep growing, become profitable, and eventually lower in price. It'll also go in waves of slowing down and speeding up as more people join and the system is expanded (it really scales quite nicely, if not trivially; if usage increases to the point where it is a problem, the funding is there to do some rewiring to solve it).

    Here in Canada, we have $50/month cable connections. The price is high enough still that they don't have to charge for installation. Everyone who has it raves about it, and people are signing up like mad. I wouldn't be surprised if it was already turning a healthy profit. I'm sure they'd love to compete with the POTS services, and I bet they'll offer limited bandwidth connections for $20 soon.
  • I think ISDN behaves pretty much like a normal phone line. A virtual circuit is established to make a call and it's torn down when the call ends. As far as metered rates, it depends on your phone company. Some do, some don't. When I had ISDN it was a flat rate (very nice).

    With DSL, though, I think everything is built for 24/7 connectivity, and even your voice calls are handled with data packets. I'm not 100% sure about this, though. Maybe somebody else has a better idea. If this is the case, though, DSL might not be taxed as a normal phone line via your ISP (like cable modems)...
  • Ok, I've read a lot about local telephone company monopolies having the blame, and other such rubbish, she here are some facts:

    Fact 1) There is no monopoly in local telephone companies. I live in New Hampshire (not exactly the biggest state...) and we have a lot of mom&pop companies.

    The fact is, bigger LD companies don't want the local market, it's too expensive to deploy with not enough return.

    Fact 2) It's true, modem users on average use a LOT more line time than voice calls. Face it, I know that my average modem call was in the range of 8hours-3days, top voice calls 30 minutes - 2 hours. That means that many more lines that the phone company has to deploy to keep those OTHER (read: voice customers :P) people happy.

    I had some other stuff, but I was destracted by having to do work, so I'll leave with this...

  • The FCC has the right to collect fees to run itself: tm

    The FCC also has the ability to allow or disallow regulated bodies to collect various fees.

    The FCC is supposed to collect fees for itself to cover costs of regulating things. In the case of a "modem tax" they would be charging us to charge us. I really, really, hope that isn't the idea.

    More likely is they will allow the RBOCs to collect the fees for themselves. The RBOCs have supposedly been after this for years. The RBOCs complain that the longer call times from Internet users have driven up their costs. Basically, they are complaining that people are taking advantage of the services they have sold. Boo hoo. I have little sympathy for RBOCs that depreciate their equipment over 30 years, delaying new technologies. If PacBell, for example, is so worried about overused lines, why are they actively advertising second phone lines for Internet use?

    So if the RBOCs get the money, where is it supposed to go? Equipment upgrades? They could pay for that by slipping everyone an extra $20 charge over 1 year.

    What about the CLECs? If I'm a CLEC, I'm entitled to the same fees, right? So I could use these fees to build myself from scratch? Do the RBOCs really want to have the FCC mandate a "tax" that will enable CLECs do sping up at no cost? (Note: this wouldn't really happen.. the RBOCs would just lobby to get some ridiculous requirement put in place to be a CLEC, making it not cost effective.)

    How does the FCC/RBOCs know that I'm making a modem call? Are they going to put in equipment to monitor all calls? I.e. charge me to charge me again? Or, more likely, just charge ALL calls, voice or data.

    What the RBOCs really would like is to eliminate free local calls. They've done it in most places for ISDN. ISDN is metered, even for residential, by most RBOCs. There doesn't seem to be any particular reason to justify it. They did it because they could. (They can't get away with metering EVERY phone line, so they do the ones that are new and different.)

    How about full-time links? Broadband, cable, etc.. that have no per-minute concept attached to them? Is there a flat fee to have it?

    If there's a flat fee, how does that not apply to my LAN now? Because I'm not an RBOC/CLEC/whatever? If I throw a lenght of CAT5 across the back fence to run my neighbor, is that OK? If I manage to get right-of-way all the way to my ISP's POP with copper of my own, do I get to skip the charge?

    There are way too many problems to be addressed. The closest thing they can do to what they want is to take away all free local calls. I don't think they can get approval for that, so I don't think we'll see any change.

  • Actually where I live an ISDN line is the same price as a normal line. There is a 100 dollar setup fee for the big gutted phone employee's to come put it in but after that is the same price rate for a single channel.
  • I've seen several people mentioning paying metered rates for DSL and other fixed connections... I just thought I'd point out is that for *DSL/ISDN/Frame/T[1-3] you're already paying for the line yourself, leasing it from the teleco in most cases.

    If you read the article carefully, you'll see that the telecos are complaining about dialup customers tying up the local exchanges with long duration calls to the ISP's...

    Remember, local telecos aren't desgined to handle a 'full' load, they work on the principle that not everyone will be using their phones at the same time. Basically dialup users are putting extra load on the voice lines, whereas the people who are paying for leased lines are already paying for their connectivity, and aren't potentially clogging up regular voice lines. That's about the long and short of it.

    "I love chess! It is like ballet only with more explosions!"
  • Modem users will pay their fair share with this tax, and the phone companies will continue to have everyone else pay for the upgrades. You can't win.
  • Actually modem users don't always get the best end of the stick when it comes to phone system upgrades.

    They recently upgraded the phone system where my parents live to digital routers. This was done to allow for more phone lines and allow for a clearer line. However their modem took a drop in speed because now their phone lines get converted from analog to digital and then back to analog when it goes to their isp service. this results in slightly more line noise and a reduction in speed.

    So if you are a modem user and you are in a area with digital routers (most of the US soon) your modem is slower then it should be because of the improvements that the Phone Companies made for the Voice users.

  • I'm an American and I think he had quite a valid point.

    So now are you going to find some way to insult me and my country in order to make your point?
  • So you're saying the phone companies are guilty of not subsidizing ISDN so they can charge by the minute for local calls? Of course, though, they can't charge by the minute for local calls, and they will never get approval to do so. Any serious talk of a modem tax is referring to special charges for modem users, either directly or indirectly.

    ISDN was probably poorly handled, but it was never that great a technology to begin with. It is complex and therefore costly to install (misconfigurations galore), requires that special lines be laid and special equipment installed, and not really that much better than POTS.

    ISDN was never really viable as a standard feature in everyone's home. If the prices were high, it was because the telcos knew they would only make money this way. It had to be profitable on the few customers who would pay a premium for a modest performance increase. They aren't stupid; if they saw potential for installing these lines in most homes, they would have lowered the prices and made a fortune on volume.

    Now that better technologies are emerging, and internet connections are quickly approaching a household standard, some phone companies are starting to do exactly what you describe, except with DSL.

    Of course the phone companies are greedy. Any for-profit public corporation is required by law to seek maximum profit for its shareholders. That doesn't mean that they are acting maliciously.

  • With DSL, though, I think everything is built for 24/7 connectivity, and even your voice calls are handled with data packets.

    No, that's not how it works. The wires your phone uses can handle signals from DC to about 1MHz. The voice line uses 300Hz - 3kHz. Then there is a gap to about 10kHz, then DSL uses from about 20kHz to 1MHz. There's a splitter at your house, and the high frequency signals go to the DSL modem, and the low freqs to your phone. There's the same at the telco office: the low freqs go to the phone switch, and the high freqs to another DSL modem. So, your voice is still analog (at least until it hits the switch), and your DSL data never touches the phone network. That's why the phone companies love DSL: your switch usage goes back to the "old model" of usage (lots of short calls), and your data usage is handled seperately.

  • The internet is scuffing things up a bit, and bothering big corporations, and making things just a little bit easier for those of us who dont have seven digit salaries. Because of this, I have two, and only two opinions on this subject. First, I think the phone companies are whiners. I dont know the actual finances, but I'm damn sure that they can cough up the cash to pay for a higher capacity of calls and not have much of a prolem at all. It reminds me of companies who lay off 50,000 workers to "maintain profits" in a fiscal year where the company makes 2 billion, or when America started worrying a year or so ago when the markets in Asia started falling out, and it started dragging our market, too. The economy didn't stop growing, it just quit growing as fast - things weren't getting worse. What these companies arent worried about when they realize that they may have to spend a little extra to keep up their current usage level is keeping up with the pack or even staying ahead - they just want to keep getting further ahead. I think America Online showed perfectly well that it's possible to up capacity without raising prices considering how they survived the fiasco that occurred when they switched to unlimited use. Of course, if AOL had an FCC to whine to, they probably would have done it, too. The second reason why this scares me: Despite all the hype about the Internet bringing the world together, the rich are getting richer and the poor are getting poorer. Part of that is because nowadays everything is so electronic that god forbid your company should have a cash register with buttons instead of a touchscreen. If a tax like this goes through, fewer people will be able to make use of what technology is available to them, and an even larger chunk of the world will just fall further and further behind. Sometimes the advantages are subtle. Your kids will do better in school because they can study for the SAT online, giving them an unfair advantage over poor little Theresa and Jimmy who don't get an internet connection in their home. Too bad Theresa and Jimmy can't write their papers as well, either, since they dont get the joy of a homework helper service like AOL's. Their parents have a slightly smaller budget because they end up paying a higher telephone bill - without the daily or weekly emails to their families and chats with their parents on ICQ, their urge to call long-distance is just a little bit greater. As for me, I can cough up the extra cash to pay for my net time just fine - if the FCC passes this net tax, I'll be fine in my white middle class suburban comfort zone. Im not that bothered by any personal losses. What I see in this that pisses me off is yet another case of well-plumpened CEOs and stockholders sucking the blood of those less gargantuan than them, and I see my government encouraging this. by the people for the people? ha.
  • Where do you think the money for your Cell Phone goes?

    Cell Phone companys don't have their own phone network. Someone has to pay for the connection when your call gets connected to a Cell Phone Node and then gets connected to a local phone system. Part of that per minute rate you pay goes to the local phone company.

  • Whoops, I'm paying $40/month. It's -$10 for being a cable customer here too, but the cable modem rental is included in the price.
  • Tier 2.71828: Internet Annoyed - has a cable connection for most of the year, but spends the summer in a place which is very nice except for the fact that the only way to connect to the Internet is the phone lines, which can only handle 26400 bps. Moreover, there's only one ISP, which owns a single class C subnet, boots people randomly to make up for this fact, and has a mail server with 19/6 uptime, as opposed to 24/7.

    Tier 4: Internet Comatose - connects to the Internet via 300 baud HF packet radio. Gets connection dropped by clouds and sunspots. Basically, what I made plans to do when the rumors came out that the aforementioned single ISP was going out of business.
  • by MrP- ( 45616 )
    I just did some math based on those numbers, if we had a 2 cent/min tax I'd owe about $792 a month, damn I'd have to become an amish if they did this, I'd never be able to use a PC again (why would I use a PC if I couldn't go online?)

    $mrp=~s/mrp/elite god/g;
  • Hell yah. The advantage of this becomes more limited information sources, yet stronger competition. Stuff gets better. And, if some benevolent guy with a T1+ wants to link the area fidonet (or whatever other message net) to the internet for worldwide communications, all the more power to him.

    then again, I might be babbling again. I miss my BBS's. :-(

  • This isn't anything new. Hong Kong Telecom ( Now Cable and wireless ) have been charging us $1.95 HKD per hour from the beginning. It not much but it does add up to a very large bill. I am personally aganist a internet tax.. but hey we have to pay PNET over here you could well do the same.
  • I believe that the case is exactly the opposite in the United Kingdom; The Telcos actually pay the ISPs on a usage basis. It's a kind of profit share from the call charged to the user. For example: user connect for 10 minutes to an ISP; ISP gets part of that 10 minutes local call charge in payment. Lets face it, when per minute call charges are in force, the telcos are making loads of profits on the internet boom.
  • Fess up time, as a true pinko Brit (well Scot actually) and genuine politician, I have even proposed a 'modem tax' myself, said he calling down the hounds of hell on himself...

    There are a number of fundamental issues here which need to be addressed in a sensible manner.

    Firstly the provision of, and development of, the internet was not done in America by the free market. Some of us are old enough to remember when the connection between Janet and Bitnet was over the military satellites via the receiving station at the Lizard in Cornwall. My former PhD supervisor (genuine pinko Yugoslavian-Russian Brit) knew in advance there was trouble brewing at the time of the Falklands due to all transatlantic traffic being cut off for a fortnight...

    The internet was built with tax-dollars via state-run institutions, with the salaries of all of us nerdenheimers in academia payed for by someone else... It was essentially a 'socialised' activity as opposed to a 'market' activity, and had a strong military flavour. And if you don't think the US 'military-industrial complex' (a quote from Eisenhower, a well known former US President, before you flame-on! thrillseekers) is a 'socialised' activity then I advise you to seek out Michael Moore's TV Nation clip where he marches through Newt Gingrichts constituency (?)/congressional district (?) whatever demanding that the Coastguard Station (in landlocked rural Georgia) is closed down for tax cuts.

    There are a number of different issues in developing the UK as a major internet player and politicians need to balance them. How do you raise money to plough into cabling? Should you go for the regulated cable market like we do, or enable dark fibre provision like Paolo Alto? How can Glasgow or Edinburgh compete with Helsinki and drive up our connectivity.

    Now there is a consensus emerging that the key to getting on in the internet world is old-fashioned Keynesian demand management (which I tend to agree with) ie use taxes raised from VAT, income tax, yada-yada to reduce the cost of internet access and subsidise, as a state-led initiative, access to the internet to stimulate demand and hence supply of internet goods and services in the UK. Now this looks to me like good old pinko social democracy.

    The problem I was facing, as a putative candidate for the new Scottish Parliament, was how to propose to raise money to put in internet infrastructure for Scotland, subject to the intricacies of the financial relationship between the Scottish Parliament and the UK Parliament (If we talk about the financial and taxation structure of the new, reformed UK, I will get excited and you will get bored). The Scottish Executive has limited recourse to income tax and none to VAT (like the American sales tax), there are even constitutional issues that say it might not be possible for Holyrood to levy a modem tax - let alone do the infrastructure work (Telecomms is a reserved issue, like Federal area of responsibility).

    I think Scotland needs to improve it's infrastructure and if that means, in the short term, an increase in taxation to do it (wether by modem tax, or...) then it will lead to greater prosperity later...

    Lowering cost is one way of stimulating demand, increasing bandwidth is another. If a modem tax made internet connectivity a bit more expensive but we had the bandwidth of Helsinki, ie 50% plus equivalent ISDN penetration, then the case for a modem tax could be made...

    I'm not pretending that I have an ideal political blueprint for internet development in Scotland - I'm not even sure that a modem tax is the/an answer, but someone has to pay for this stuff and it will be you Johnny tax-payer...

    Politics is the art of the possible. Face up to it...

    I am resigned to my fate, swarm over death... but some intelligent comments would be nice as well...
  • Relax... as usual, the "modem tax" ain't gonna happen.

    Sure, but I can imagine that it will get tougher as the years pass by. Don't forget that in a whole lot of countrys the 'modem tax' has allready been 'introduced' and there is no way around it anymore. I'm not all that familier with US politics but I can't help thinking that the minute the goverment sees a potential income through phone taxes they'll be sure to consider it. And perhaps it won't be this time, or the next, but once it gets through....

    Thats why I think it is a good thing to mention this if it becomes an issue. I mean; suppose it does come to the point I mentioned above and you would not be informed by magazines, like /., because everyone believes 'it will never happen'. Result could be that hardly anyone will protest against it. Like I said; I don't know how the US goverment handles stuff like that but over here in Europe they can be darn slippery from time to time.

  • Taxes in general aren't passed on to consumers, it really depends on the price elasticity of demand for the service. In the case of ISPs I would imagine that it's pretty low. Don't look for rates to go up all that much if we do get the taxes.

    Of course, I haven't really thought it through, and I'm no economist, I just wouldn't get all too worried about it.
  • Regional Bell Operating Company, if memory serves. It's the official name for the Baby Bells, if I'm recalling correctly. If not, then could someone please smack me with a clue stick?

  • Tier 2: Internet Enabled - the urban upper and middle class and the suburban upper class, with low-grade DSL or Cable Modems, or at least 56K. They know they get a pretty good deal and that it can't continue much longer.

    Why can't it continue? Companies are making buckets of money off us already. Why do you think there are so many ISPs now? It's just big businesses wanting to make more money without doing more.
    It seems to be the new internet mentality. I see it everywhere now. In spam, there are promises to make money without doing anything, there are domain and patent squatters, thousands of porn sites that charge you to view pictures that were downloaded by them for free... the list goes on.

    The new internet economy is dazzling with the promise of money for nothing. And many people get very rich this way.

    Is it right?
  • While there is some amount of logical justification, I find it very hard to believe that the phone companies are losing money. Bell Atlantic, for instance, is expecting $3.00/share annual earnings this year. Bell South has estimated earnings of $2.00/share. These do not sound like companies who are in need of additional capital.

    I believe those hardest hit by this will be people who work from home. Assuming a rate of 2 cents per minute, and 40 hours/week, it suddenly costs $250/month to work from home. This is effectively a $3000/year after-tax salary deduction which, while not a fortune, is certainly the difference between being able to save enough money to send your child to college, and having a child who graduates with $50,000 in loans.

    I'd be very interested in hearing a compelling counter-argument in favor of the charges. I have a lot of trouble believing that the ACTUAL telco costs caused by an ISP cause it to become unprofitable. Assuming a 10,000 user ISP, one can assume that there's around 1,000 telephone lines on the ISP side, and probably 3,000 dedicated lines for clients. Assuming charges similar to what I pay ($30/month), that's $120,000/month. If the phone company can't route those calls for that amount of money, I have to believe it's the phone comapny's own fault.

  • As a customer of Pacific Bell, a Californian telephone service, I have the option to either enroll in an unlimited local calling plan or a per-minute local calling plan. For anyone that uses the Internet, the extra cost of the flat-fee plan is obviously the way to go. For others, the per-minute charge might be appropriate.

    You have been conditioned by the telco to think this way. Really, why should you have to "choose" a dialing plan at all? Why doesn't the telco just initially charge you by the minute on the low-monthly-fee plan, then if you go over x minutes, your plan automatically switches to the flat-rate plan for this month? Go over x minutes on LD and you're auto-switched over to the Whatever-LD-Nickel plan. The only reason to offer "plans" is to deliberately take advantage of and to cash in on people who choose the wrong plan for themselves. It's really quite evil when you think about it this way.

  • Let's charge the FCC some Air Tax. Everytime they inhale they must pay a tax. That is just about as sensible as this proposed modem tax. Then again if I was on the FCC board and I knew that taxing the public for airtime would increase my salary sometime down the line, a tax would seem like a good idea.
  • But data users are the norm nowadays when you consider total phone usage (residential AND business use).

    I think that's the heart of the matter right there. By your logic, then, would it have been acceptable when the total line usage by data users had been minimal? When that usage exceeds that of normal voice traffic, it's no longer OK for data users to pay more?

    You might as well say, why should Granny Mae pay for phone upgrades to the LD network when she only makes local calls, or why to pay for supporting touch-tone dialing when she still uses her ol' rotary phone.

    I don't know about your phone company, but Southwestern Bell *does* charge extra for these features. They're all part of their "standard" calling package, but if you ask them for an extremely minimal service, you'll find that you CAN remove things like touch tone, long distance access and flat-rate service.

    I see your point, but if you use the "by-the-majority" mentality for determining who pays what, as soon as the amount of data traffic started exceeding the voice traffic (an assumption by you I'm not fully ready to believe just yet without real data), the phone company should have started basing their flat rates on data usage instead of voice usage, which would have instantly easily tripled your phone bill (or more).

    The fact is, data calls are being billed at voice rates. Back when voice traffic was all there was, the phone company based their capacity and flat rates on the resources the average telephone user consumed during the average month. Data users by far are not "average" users, as they use up many many times the amount of resources non-data users use. As far as I'm concerned, the phone company did data users a *favor* by continuing to use their existing flat rate service regardless of the traffic.

    Rather than switching to metered rates, the phone companies bit the bullet at first and dipped into their profits to increase the capacity of their networks so that people would not be getting "all circuits are busy" recordings when they tried to make a legitimate voice phone call. To get themselves back into the profit-making game, I imagine telephone flat rates slowly started climbing to make up for the difference.
  • Your little anti-communist rant misses the point that here in Ameri(c|k)a it's the gov't that's telling the phone companies that they -may not- charge per-minute, and that in Europe it's the -lack- of gov't intervention that allows the telcos to charge 'what the market will bear.'

    Other than the lack of factual content, it was well designed for hitting emotional buttons and getting people worked up. If you include a little factual content in the future maybe you can bring about the New Red Scare, if that's really what you want to do. I can always move to Canada... or maybe Europe... if you succeed.
  • by G27 Radio ( 78394 ) on Tuesday October 19, 1999 @10:38AM (#1601754)
    The prices on POT lines are based on the way they work without ISPs: occasional short uses, not long-term continual connections. You are on a time-share system, and you are insisting on your right to use it 100% of the time.

    ISDN could have been the RBOC's solution to this years ago. The setup/connect time for ISDN is only a second or two so there is no need to stay connected unless you are continuously sending or receiving data. Keep in mind that an ISDN channel uses the same amount of bandwidth as a regular phone line (although it's common to bond two channels together.)

    Instead of fostering this technology, the RBOC's have kept the prices prohibitive. In most areas of the US the user is charged per minute per channel or an exhorbitant flat rate (more expensive than a T1 when I lived in NJ.) To make matters worse you have to pay for a full minute even if that e-mail only took 5 seconds to transfer. The average home user would tie up the network a lot less if their connection only came up long enough to load a web page then closed down again--almost definately less than a voice call rather than more!

    So the RBOC's force people to tie up their network and then complain that they need more money because of it. Do you think that they didn't realize this would happen?

    Think about the services RBOCs supply to home users... The bare minimum are affordable because RBOCs are local monopolies that don't benefit at all by giving more than the bare minimum--they basically charge as much as they are allowed for extra services. Over the last couple years more competition has entered the picture, and only now are we seeing reasonably priced data services showing up from the RBOCs.

    So, why wouldn't they make prices more reasonable for ISDN if it will lessen the load on their network? Because they don't have to! Why give it away if they can charge 2-4 cents a minute for local calls? Why give away call waiting if they can charge $2.50 a month for it? (You don't think that it costs them any extra to provide you with call waiting do you?)


    All I can say is thank * for my cablemodem. As far as I'm concerned the RBOC's can go fsck themselves.

    ?syntax error

  • The fact is, a large part of voice data is going to be over IP in the next decade anyway. It's simply more efficient - hello, 24 phone calls on a T1, each of which takes up a tiny amount of the bandwidth of its channel? It just doesn't make any sense.

    The problem that the phone company has with data over telephone lines is that it actually uses the full capacity of the line - a T1 in use for data will push the full 1.54mb, more or less. Their original gear was never designed for that. This has forced them to upgrade.

    This is just a too-little-too-late attempt to recoup their costs for having to upgrade to new technology - don't be surprised if it disappears around the time that they cut over their systems to run over IP. I have heard rumours that Sprint will have an entirely integrated voice/data network by the end of next year...
  • After all, why should people who aren't using modems, or are using them less, pay for upgrades the phone company makes only for the modem users.

    What upgrades? Over POTS lines of average quality, with no upgrades in particular for the benefit of modem users, one ought to be able to achieve a 45K connection with a V.90 modem. In my area this is impossible due to the degraded condition of the lines. I cannot connect from home any faster than 26.6k myself. No, it's not my ISP - the owner lives right around the corner from me, and he can't connect any faster than I can.

    If you're talking about the sort of upgrades that enable such services as DSL, then the users are already charged for it by paying a premium rate for the service.

    It seems to me the FCC, goaded by the local telcos, is approaching this from the wrong direction by aiming the tax at the ISPs. The analogy with long distance service is faulty. In that case, the long distance company is connecting to me - for the benefit of their customer on the other end of the line, who ultimately bears the cost of completing the connection through the local telco at my end. But in this case, I'm the one who connects to my ISP, not the other way around. I have a contract with my local telco to provide me with local connections at a flat rate. If the telco wants to do things differently, then they ought to do so by dealing directly with me. But they don't dare directly approach their customers for higher rates, which customers invariably feel that they're paying too much for substandard service already. So instead, they're trying to make it look as if the ISPs are the ones tying up the lines. This way they can make the ISPs do their dirty work for them, since they're the ones who are going to have to pass on the additional costs in order to stay in business.

  • The typology you present is at best outdated. Many rural communities have good Internet access (here in the boonies of Mississippi, I can choose from at least 5 ISPs at 56k, plus a cable modem provider). Even though I'm in a college town, if you travel one county in any direction there are still several ISP options.

    Yes, so people outside major metros don't have ADSL. Who really needs it? All the applications for high speed for consumers are a "gee, isn't this nifty" effect that are done better through traditional communications channels anyway.

    There are very few people in the U.S. that are completely isolated from the 'net. Those that are isolated can reasonably be viewed as being isolated by choice (my mom or grandparents, for example), in an era when you can buy a WebTV box for $100 (and I just saw a cheapo "email only" device being advertised on TV for less).
  • Screw the FCC. They don't listen. Their web pages are arcane, poorly organized, and incomprehensible. There is no way you'll ever be able to easily find out what the FCC was, is, or will be doing by simply looking at their site.

    Case in point:
    my FCC rant [] from the last time I tried to check on this stuff... I never got a real reply from them, either. And we pay money for this?

  • Actually, phone companies who act as ISP's must keep separate books and encourage competition. (or whatever phone company isp it is) has to pay fees to Bell Atlantic for providing DSL over BA's lines.

    This may sound like cheating, since the money is never really changing hands, but as a (common carrier) phone company, I beleieve BA must disclose their earnings to the US government, so they can be watched for cheating like this.

    I suspect that would have to pay any taxes that any other ISP would have to pay for use of the lines.

    That said, DSL isn't really a modem line, it's very different and wouldn't be effected by the same laws. Typically, DSL lines are run to the phone company, then go through some nifty equiptment at the CO, then get routed to the ISP as ISDN/T1 or some sort of PRI. So the ISP is already paying tarriffs on the lines from the ISP to the CO, hence these will not be charged as modem lines.

  • Has this been verified by anyone else? The ZD article doesn't really cite anything, and it *is* a ZD article after all...
  • Although, we are moving onto Cable and DSL right?

    Well, no, people in rural areas or where it's not cost-effective to install DSL or Cable Modems don't have these services. Which means poor neighborhoods get redlined and get lousy access.

    Which is what the access charge is for.

  • The problem with this tax is that it only harms the small isp's who can't simply absorb such a tax, and thus need to increase their rates significantly.

    AOL and other large isp's can absorb the tax much more easily, and, depending on the details of the tax, could probably leave their rates steady, or at least be able to undercut the smaller isp's.

    It would also be interesting to see the tax's influence on the recent trend of free internet access bundled with computers/free computers bundled with internet access.

  • Last time I checked ISPs had to pay for extra lines in the first place. As I recall it's no ones business how you use those lines, if I want to stick an autodialer on my phone and call my second line 24/7/365 that's my own business. I just don't see the logic behind the telco's complaint. Of course, perhaps it's not logic based and they just want to cash in on the thousands of ISPs all over the country...

  • I think that the article is a little vague on which lines they're talking about. However, my impression is that the tax would apply to local calls from a user to an ISP. This is nuts. Local calls are either universally flat, or metered but at a very low rate (which was my experience with Bell Atlantic). Either way, the RBOCs can expect people to generally tie up lines for long periods of time and don't consider it a problem.

    I am a bit more sympathetic when discussing the connection between the net as a whole and the ISP, but not this sympathetic. While the current pricing model is being taken advantage of, this strikes me as just another example of telcos not wanting to adapt to new technologies. Way back when, they were practically handed the Internet, packet-switching, the whole nine yards, and dismissed it as worthless. Seems to me they're still thinking in terms of circuit-switched voice networks and not as telecommunications as a whole. (a charge for overall transmission - both send and recieve - would be more logical)

    Of course, tolls would kill internet usage, which has been prospering largely because people don't mind wasting time on it. If the phone company charges you when you browse through amazon most people are going to stop using it. (/. is an exception. It's so addictive it could be a Controlled Web Site ;) AOL, Virginia's premier pyramid scam, probably used to have this problem. People would sign up, see the first bill and run away. Flat fees may increase the load on the networks and computers, but in the current growing environment that would be best, IMHO.
  • From what I've heard, AT&T (formerly TCI) started forcing non-business-rate cable modem customers towards NAT just recently, prior to that they were doing DHCP with real IPs for most users, and the IP's were fairly close to static. From what I've heard they are billing a move towards agressively changing IPs even for DHCP users as a 'security feature' as is how they are billing the move towards NAT. It is my understanding that the only way you will be able to get a true static IP from them in the future will be to pay for their business grade service.

    As for DSL service, part of your quality and speed experience may depend on which ISP you use (since with DSL you have a choice and with cable you don't). US Worst seems to get the most dings in that area, and there are rumors that they may be moving towards forcing NAT on people also. I am using one of the other providers, and I have seen what I would consider good speed. I am paying for the 256kb connection and I generally see better than 400kb (50KB) download speed even from busy sites like, and that is going through my underpowered (P75, 48M) squid proxy server and using Netscape as an FTP client (which isn't the most efficient). Upline speed is generally only slightly slower than the downline speed. I've also seen aggregate downline bandwidth usage of around 512kb when doing multiple transfers at once.

    It will be interesting to see how well AT&T does in building up their infrastructure (like splitting cable modem network segments to reduce shared bandwidth congestion) as they add more customers. One other advantage to living on the poor side of town is that much fewer of my neighbors probably have cable modems than in the more afluent western suburbs.

    As for distance, you must really be right on the edge of your service area. I am about 2.5 or so miles from the central office and while they wouldn't give me 512kb service here, I've had no troubles with 256kb service.

    I ended up rewiring my house with all new Cat5 wiring, only to find out that the damned water company had some goofy automated meter reader sitting on the old wiring that was messing up the signal. Of course I also noticed an improvement in the sound quality in my voice line after rewiring, so I am not unhappy with the situation there.

    One of my reasons for going with DSL is I was able to keep my existing (Linux friendly) ISP. I like the fact that myst ISP knows, and doesn't mind if I am running server processes. Another reason was because I was never happy with TCI as a cable vendor (I bought a DSS dish to get rid of them).

    As for the cost issue, I expect that eventually US Worst will be forced reduce their pricing to be more competitive with AT&T. I don't really expect that to happen until both of them get the ability to wire every household in their market areas though.

    In the long run you are right about needing fiber to the house, but I won't hold my breath waiting.

  • I don't know how the US goverment handles stuff like that but over here in Europe they can be darn slippery from time to time.

    Then there's nothing to worry about. That never happens here in the U.S.

    Damn. The lightning was really close that time.

    Consult, v. t. To seek another's approval of a course already decided on.
  • Moving people from Tier 2 to Tier 3:

    There already is a low-cost service being offered, but only in urban areas. It's the version of DSL where they give you a maximum of 2 hours connect time per session and you "share" the DSL connections. Costs $17.95 here in Seattle from USWorst.

    But you'll probably never see this in rural areas or low-rent suburbs. Not enough demand to make it viable without subsidies.

  • Seems like those who write laws want to create revenue from any viable source they can muster. If it has value, tax it.

    I use my ass everyday. Why don't they tax it? Imagine, they could get a reasonable percentage of everything that goes through it.

    Once upon a time, taxes were levied for roads, schools, and implimenting basic utilities. That was great. Now, the Biggest Business in the Country wants a cut of our own profits. Why, because it can get away with it. Make it law. If I refuse, I go to jail. So I pay.

It is not for me to attempt to fathom the inscrutable workings of Providence. -- The Earl of Birkenhead