| Published by NetAction | Issue No. 61 | September 21, 2000 |
|---|
Legislation that could significantly increase the cost of Internet access was quietly approved on September 18, 2000 by the House Subcommittee on Telecommunications, Trade and Consumer Protection. H.R. 4445, a little-known bill sponsored by Rep. Billy Tauzin (R-La.) would end a telephone industry cost reimbursement arrangement that has helped keep Internet access charges affordable for consumers. With less then three weeks before the end of the current legislative session, Internet service providers and other opponents of the bill are concerned that the bill might slip through Congress as an attachment to a year-end appropriations bill. Lobbyists for the Regional Bell Operating Companies (RBOCs) are working hard to get the bill approved before the session ends.
HR 4445, the Reciprocal Compensation Adjustment Act of 2000, is bad news for consumers. The full House Commerce Committee could consider HR 4445 as early as next Tuesday, September 26, 2000. Internet users should contact House Commerce Committee members immediately and urge them to oppose HR 4445.
(DO NOT CIRCULATE THIS ACTION ALERT AFTER SEPTEMBER 26, 2000.)
HR 4445 would end a cost reimbursement system that local telephone companies use when different companies handle a single phone call. The system is known as reciprocal compensation. In its simplest terms, reciprocal compensation is an arrangement by which the caller's telephone company reimburses the call recipient's telephone company for costs associated with completing calls.
For example, an Internet user gets local phone service from Pacific Bell, and uses an Internet Service Provider (ISP) that gets service from Pac West, a competitor to Pacific Bell. When the Internet user dials in to her ISP, Pacific Bell must pay Pac West for the cost of completing the call.
Congress required competing local phone companies to negotiate these arrangements as part of the Telecommunications Act of 1996. When the terms were negotiated, the Bell companies demanded high fees because they assumed that they would be paid to complete calls that were started by competitive companies.
But their assumptions were wrong. Most consumers get phone service from the Bells, while many ISPs have switched to competitive companies. So the Bells have had to pay billions of dollars to the competitive companies that complete the millions of calls that consumers make to ISPs when they go online. But rather than pay up, the Bells are lobbying Congress to change the rules -- rules they willingly agreed to when they assumed they were going to benefit from them.
If Congress approves HR 4445 and ends the reciprocal compensation system, competitive phone companies will lose a significant source of cash flow and will be forced to charge ISPs more for phone service. If the ISPs pass those increases on to their customers, as expected, it poses a threat to affordable dial-up Internet service -- especially in rural and low-income areas.
Millions of Americans are using the Internet today because the cost of dial-up service is affordable. Price competition is so intense, in fact, that some ISPs offer service for free. This is an important factor in bringing technology to low income and rural communities, and bridging the digital divide.
HR 4445 may be considered by the full House Commerce Committee as soon as next Tuesday, September 26, 2000. A list of Commerce Committee members is included below. Please call fax a letter TODAY to one or more of the committee members, and urge a "no" vote on HR 4445.
Be brief. Here are some suggested talking points:
HR 4445 is a threat to affordable Internet service. It will lead to higher costs for ISPs, and higher Internet access charges for consumers.
HR 4445 is a threat to the availability of Internet service in rural and low-income areas. We need affordable Internet service in low income and rural communities to help bridge the digital divide.
The Bells should not be allowed to change the rules just because the market didn't develop the way they expected. In a competitive market, there are no guarantees.
| REPUBLICANS: | ||
|---|---|---|
| Committee Chair: Tom Bliley, VA | Phone: 202-225-2815 | Fax: 202-225-0011 |
| Michael Oxley, OH | Phone: 202-225-2676 | Fax: N/A |
| Michael Bilirakis, FL | Phone: 202-225-5755 | Fax: 202-225-4085 |
| Joe Barton, TX | Phone: 202-225-2002 | Fax: 202-225-3052 |
| Fred Upton, MI | Phone: 202-225-3761 | Fax: 202-225-4986 |
| Cliff Stearns, FL | Phone: 202-225-5744 | Fax: 202-225-3973 |
| Paul Gillmor, OH | Phone: 202-225-6405 | Fax: 202-225-1985 |
| James Greenwood, PA | Phone: 202-225-4276 | Fax: 202-225-9511 |
| Christopher Cox, CA | Phone: 202-225-5611 | Fax: 202-225-9177 |
| Nathan Deal, GA | Phone: 202-225-5211 | Fax: 202-225-8272 |
| Steve Largent, OK | Phone: 202-225-2211 | Fax: 202-225-9187 |
| Richard Burr, NC | Phone: 202-225-2071 | Fax: 202-225-2995 |
| Brian Bilbray, CA | Phone: 202-225-2040 | Fax: 202-225-2948 |
| Ed Whitfield, KY | Phone: 202-225-3115 | Fax: 202-225-3547 |
| Greg Ganske, IA | Phone: 202-225-4426 | Fax: 202-225-3193 |
| Charles Norwood, GA | Phone: 202-225-4101 | Fax: 202-225-0279 |
| Tom Coburn, OK | Phone: 202-225-2701 | Fax: 202-225-3038 |
| Rick Lazio, NY | Phone: 202-225-3335 | Fax: 202-225-4669 |
| Barbara Cubin, WY | Phone: 202-225-2311 | Fax: 202-225-3057 |
| James Rogan, CA | Phone: 202-225-4176 | Fax: 202-225-5828 |
| John Shimkus, IL | Phone: 202-225-5271 | Fax: 202-225-5880 |
| Heather Wilson, NM | Phone: 202-225-6316 | Fax: 202-225-4975 |
| John Shadegg, AZ | Phone: 202-225-3361 | Fax: 202-225-3462 |
| Chip Pickering, MS | Phone: 202-225-5031 | Fax: 202-225-5797 |
| Vito Fossella, NY | Phone: 202-225-3371 | Fax: 202-226-1272 |
| Roy Blunt, MO | Phone: 202-225-6536 | Fax: 202-225-5604 |
| Ed Bryant, TN | Phone: 202-225-2811 | Fax: 202-225-2989 |
| Robert Ehrlich, MI | Phone: 202-225-3061 | Fax: 202-225-3094 |
| DEMOCRATS: | ||
|---|---|---|
| Ranking Democrat: John Dingell, MI | Phone: 202-225-4071 | Fax: 202-226-0371 |
| Henry Waxman, CA | Phone: 202-225-3976 | Fax: 202-225-4099 |
| Edward Markey, MA | Phone: 202-225-2836 | Fax: N/A |
| Ralph Hall, TX | Phone: 202-225-6673 | Fax: 202-225-3332 |
| Rick Boucher, VA | Phone: 202-225-3861 | Fax: 202-225-0442 |
| Edolphus Towns, NY | Phone: 202-225-5936 | Fax: 202-225-1018 |
| Frank Pallone, NJ | Phone: 202-225-4671 | Fax: 202-225-9665 |
| Sherrod Brown, OH | Phone: 202-225-3401 | Fax: 202-225-2266 |
| Bart Gordon, TN | Phone: 202-225-4231 | Fax: 202-225-6887 |
| Peter Deutsch, FL | Phone: 202-225-7931 | Fax: 202-225-8456 |
| Bobby Rush, IL | Phone: 202-225-4372 | Fax: 202-225-0333 |
| Anna Eshoo, CA | Phone: 202-225-8104 | Fax: 202-225-8890 |
| Ron Klink, PA | Phone: 202-225-2565 | Fax: 202-226-2274 |
| Bart Stupak, MI | Phone: 202-225-4735 | Fax: 202-225-4744 |
| Eliot Engel, NY | Phone: 202-225-2464 | Fax: 202-225-5513 |
| Tom Sawyer, OH | Phone: 202-225-5231 | Fax: 202-225-5278 |
| Albert Wynn, MD | Phone: 202-225-8699 | Fax: 202-225-8714 |
| Gene Green, TX | Phone: 202-225-1688 | Fax: 202-225-9903 |
| Karen McCarthy, MO | Phone: 202-225-4535 | Fax: 202-225-4403 |
| Ted Strickland, OH | Phone: 202-225-5705 | Fax: 202-225-5907 |
| Diana DeGette, CO | Phone: 202-225-4431 | Fax: 202-225-5657 |
| Tom Barrett, WI | Phone: 202-225-3571 | Fax: 202-225-2185 |
| Bill Luther, MN | Phone: 202-225-2271 | Fax: 202-225-3368 |
| Lois Capps, CA | Phone: 202-225-3601 | Fax: 202-225-5632 |
For more background see "Lobbying could hike Net costs" at: http://www.contracostatimes.com/partners/nf/netfees_20000920.htm (NOTE: this URL is no longer valid as of 05/23/2001).
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