FARNET's Washington Update

[Jeff Ogden]

FYI. I've also added a comment from Tom Easterday on one of the topics of
this report.
   -Jeff

>Date: Fri, 30 Aug 1996 12:18:54 -0700
>To: legup@farnet.org
>From: Heather Boyles <heather@farnet.org>
>Subject: FARNET's Washington Update
>
>FARNET's Washington Update --- August 30, 1996
>
>IN THIS ISSUE:
>
>o  FCC
>        - interconnection rules challenged
>        - Bell Atlantic's "Internet Traffic" campaign at the FCC
>
>o  Congress
>        - September calendar items
>
>o  Communications Decency Act update
>
>
>^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>^^^^^
>
>FCC
>
>While most of Washington is out of town somewhere between San Diego and
>Chicago, the FCC is still hard at work - as are the lobbyists who regularly
>visit 1900 M Street.
>
>        INTERCONNECTION RULES CHALLENGED
>
>The interconnection rules released earlier this month by the FCC have come
>under fire, legally speaking, from both the National Association of
>Regulatory and Utility Commissioners and from a group of regional Bell
>companies.  The NARUC lawsuit does not ask the courts to hold up the
>implementation of the rules, but does want the courts to address some
>jurisdictional problems it sees in the rules.  The Bell companies and GTE
>have announced that they will also challenge the interconnection rules in
>court.  Their complaint is that the rules require incumbent LECs to offer
>network elements and services to competitors entering the local market at
>prices, they claim, are below their costs.
>
>The FCC has said that it will continue to work with states to implement
>local competition rules despite the jurisdictional squabbles.  It's unclear
>yet whether the stay sought by the LECs (actually only GTE is expected to
>request a halt to the implementation of the rules) will be granted and how
>that will ultimately effect the emergence of competition anytime soon in
>the local phone market.
>
>
>        BELL ATLANTIC'S "INTERNET TRAFFIC" CAMPAIGN AT THE FCC
>
>Bell Atlantic has turned up the heat again on the long-simmering issue of
>Internet traffic on the LECs' networks.  Even the Washington Post jumped
>into the fray with an editorial this morning on "traffic jams and taxation"
>on the Internet.  The _Update_ has been following this thread since last
>January or February when rumors first surfaced that several RBOCs were
>floating proposals around the FCC to eliminate the Enhanced Service
>Provider (ESP) exemption that currently keeps ISPs from paying access
>charges to local phone companies.  The access charge issue resurfaced again
>during the ACTA petition comments and is likely to be at issue in future
>access charge reform proceedings.
>
>Bell Atlantic's participation is a study done in February and March of 1996
>and submitted to the FCC.  The BA study looks at ISP traffic at several
>Washington, DC area Central Offices (COs) serving ISPs.  The study claims
>that average call lengths to ISPs were 17.7 minutes - four to five times
>the length of other calls on BA's network during this period. BA's study
>also found "above normal" traffic levels in terms of "hundreds of call
>seconds" - 26 CCS for ISP peak times (a line supports 36 CCS per hour)
>where normal voice traffic peaks at 5 p.m. at 12 CCS for
>business/government users.  Bottom line:  the BA study says that each
>analog line to an ISP costs $75 while the tariff rate is only $17.
>
>At issue here is the dial-up lines of an ISP and the fact that calls only
>come in but are not originated by ISPs.  Thus, an ISP pays a flat-rate
>tariff for the line without usage costs.  The further complaint is that
>residential customers connect to a local ISP at a flat rate, again avoiding
>usage charges.
>
>Bell Atlantic's answer to these problems is to eliminate or "modify" the
>ESP exemption and find an appropriate usage sensitive price to charge to
>ISPs.  An analysis of the study, written by two BA employees in the July
>issue of _Telephony_ insists that the usage sensitive pricing is needed to
>"send a signal" to "encourage efficiency and stop cross-subsidizing."
>
>As reported here earlier this summer, FCC Chairman Reed Hundt has indicated
>that he is not in favor of removing the ESP exemption.  This issue is
>unlikely to go away anytime soon, however.  The RBOCs are serious about
>this and at the same time are feeling threatened by the specter of local
>competition (see above).  An access reform proceeding is on the horizon at
>the FCC where the RBOCs could potentially lose it all - if the FCC chose to
>do away with access charges altogether (unlikely, but not impossible).
>
>The Bell Atlantic report can be found at http://www.ba.com

  [Tom Easterday wrote the following comment in reply to this
   part of the report. Tom was previously with CICNet, then Ameritech
   Advanced Data Services and is now working in a small consulting firm
   called IEng. I agree with Tom's comments. -Jeff]
        The problem here is that a major aspect of this argument is absent
        (surprise).  RBOCs typically do not explain trunked phone service
        options to customers (that is, channelized DS1, DS3). These services
        cut down the number of switch ports and cross connects that use
        resources and raise costs.  The RBOC representatives typically don't
        understand the options that they can offer, and instead allow ISPs to
        order hundreds of individual lines, thus overloading the local
        facilities.  One can argue that ISP's should be more aware of the
        options and not order hundred's of indvidual lines, but I believe it
        is the RBOCs repsonsibility to ensure efficient use.  If an analog line
        to an ISP costs $75 I suspect it is due to inefficient use of
        resources rather than long hold times as put forth by the phone
        companies.

        RBOCs should be required to train their sales force (and sales
        engineers) to understand trunking services and recommend/require
        them for heavy POTs customers. They should be required to adopt
        tariffs that don't make the use of such services prohibitively
        expensive as they are in some areas.  They should also be required
        to adopt efficient engineering practices within their own networks
        rather than charging customers for lackadaisical enineering practices.

        The issue of RBOCs designing a service that meets the needs of the
        ISP community while lowering costs is never discussed in these
        complaints, only that ISPs are overusing services.  Perhaps real
        competition will bring these issues to light as smaller more
        nimble companies improve efficiency on the facilities they are
        going to have to lease from the RBOC...(not that I call *that*
        real competition).

                Tom
>
>CONGRESS
>
>Meanwhile, when Congress returns next week the focus will be getting major
>legislation passed before it leaves again for election season.  It appears
>that there may be hearings in the Senate in early September on the
>encryption bill sponsored by Senators Burns and Leahy.  The likelihood of
>the bill coming to the Senate floor before then end of this congressional
>session is very slim, however.  In addition, the Clinton administration
>remains opposed to the legislation.
>
>Another priority order of business will be appropriations.  NSF
>appropriations (HR 3666) are currently in the Senate and are scheduled for
>further consideration on the Senate floor on Wednesday, Sept. 4.
>
>The copyright bills in both the House and Senate earlier this year have
>long been declared dead for this session of Congress.
>
>
>COMMUNICATIONS DECENCY ACT UPDATE
>
>On another front, the Justice Department's appeal of the Communications
>Decency Act which is headed for the Supreme Court took a minor delay.  The
>Court gave the DOJ a month extension to file its next piece in the appeals
>process.  The delay could be due in part to the Aug. 15 appeal it filed for
>the second CDA case - one that took place separately from the Philadelphia
>trial, brought by the publication, "The American Reporter."  A three-judge
>panel in New York ruled similarly to the Philadelphia case that the
>provisions of the CDA were unconstitutionally overbroad.  The cases are
>expected to be combined for consideration before the Supreme Court.
>
>^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>^^^^^
>Written from FARNET's Washington office, "FARNET's Washington Update" is a
>service to FARNET members and other interested subscribers.  We gratefully
>acknowledge EDUCOM's NTTF and the Coalition for Networked Information for
>additional support.  If you would like more information about the Update or
>would like to offer comments or suggestions, please contact Heather Boyles
>at heather@farnet.org
>


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