The Federal Communications Commission made a tentative ruling today that Internet service providers should not have to pay access fees to phone companies for connecting their customers--giving the ISPs the holiday gift they wanted.
But the decision is not final, and the commission has yet to reach conclusions on many other areas it is studying in regard to the access charges. Final decisions are not due until April at the earliest.
The ruling on Net access charges was part of a move by the FCC today to reduce long-distance access fees that now total about $30 billion annually. It marks the start of a long process that will extend well into the new year and is likely to involve heated debate between telcos and ISPs.
Robert Pepper, chief of the FCC's Office of Plans and Policy said, "information service providers should not be subject to interstate access charges."
Internet service providers and online services such as American Online currently don't have to pay access charges to the phone companies, and ISPs want to keep it that way as the telco industry undergoes significant changes under deregulation. Telcos believe the ISPs should help foot the bill for network upgrades.
Comments on access charges for ISPs will be taken February 21 and responses are due on March 24. After that, the FCC will determine whether and how ISPs will be charged to offset the cost of existing and future network lines.
He added the commission felt compelled to make a statement on the ISP issue, rather than remain quiet eventhough the agency is following a status-quo path.
"If we remained silent and didn't tentatively conclude anything, people could misconstrue our silence and feel we would impose charges," Pepper said today.
He added that the agency at this point "knows what it doesn't want to do," but it has yet to determine "what it steps it wants to implement."
The FCC is looking at the interstate access charges as one of three main areas that it needs to reform to bring competition to the local phone market, as required by the telecommunications reform signed into law earlier this year.
Meanwhile, long distance phone carriers, looking to break into the local markets, were pleased with the FCC's proposals to restructure access charges.
"By reforming the access charge regime in a way that benefits consumers rather than entrenched monopolies, the FCC can greatly enhance the prospects for choice and lower prices in local telephone service," AT&T said in a statement today.
Meanwhile, MCI's chief policy attorney Jonathan Sallet said: "The fastest way to reduce the cost of long distance rates and to boost consumer demand is to abolish the $14 billion of inflated access charges."