Short Take: Net calls need new classification, phone companies say

The classification of Internet calls as local phone calls is causing problems for the telephone industry, Bloomberg Online reported. For one, the FCC's rate structure calls for local phone companies to pay each other for completing local calls. Newer competitors are treating Net companies, including the Baby Bells that act as ISPs, as customers, which means the Bells are being charged tremendously by their competitors for their Net traffic. Also, long distance companies pay a fee to local phone companies for completing calls, part of which goes to the universal service fund for rural and lower-income customers. Net companies end up using the fund to pay for wiring schools, but they don't contribute to it.