[994] in resnet
res-net and res-phone tax
daemon@ATHENA.MIT.EDU (Jim Warner)
Sat Mar 16 20:42:34 2002
Message-ID: <200203170142.RAA22966@sasha.UCSC.EDU>
Date: Sat, 16 Mar 2002 17:42:54 -0800
Reply-To: Resnet Forum <RESNET-L@listserv.nd.edu>
From: Jim Warner <warner@CATS.UCSC.EDU>
To: RESNET-L@listserv.nd.edu
The paragraphs below will appear to some readers to echo the modem
tax urban legend. This is different. The way you can tell is to
read the specific source material (URLs) that I have referenced
and to note that these are current references.
jim warner, Network Engineer
University of Calif Santa Cruz
===========
Under current regulations, Universities do not contribute directly to the
Federal Universal Service Fund for services resold to on-campus residents.
"Universal Service" is the funding mechanism behind the government's E-rate
program for K-12 schools. It also helps make rural phone service affordable
in "high cost" areas.
But for a specific exemption, we would pay the going rate (currently about
6.5%) of gross billed revenues. The general requirement to file and pay
is not restricted to carriers. It extends to all resellers.
Carriers are required to collect Universal Service Contribution from all
customers who cannot reasonably be expected to file and pay as retailers.
Since schools are exempt from filing, our long distance and local access
service providers collect on our behalf and add it onto the bill.
The easiest document that describes the current regulations is the FCC
contribution form 499Q -- mercifully only 12 pages:
http://www.fcc.gov/Forms/Form499-Q/499q.pdf
Overall, the current situation is a good deal for schools doing long
distance mark up and resale. The school pays the tax on their costs
instead of on their revenues.
=======
The FCC has commenced a proceeding that might change the rules. The
important document is FCC 02-43, a Notice of Proposed Rule Making (NPRM),
filed on 14 February and released on 26 February 2002. It is currently
open for comments.
http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/2002/nrcc0203.html
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-43A1.pdf
The proposal would change the Universal Service collection mechanism from a
revenue basis to a connection basis. Retail resellers would pay based on
phone instrument or cellular handset count.
The paragraph that directly describes most Universities is #43 on page 19:
43. We seek comment on whether and how interstate telecommunications to
private networks should be assessed under the connection-based assessment
methodology discussed above. Under the existing system, private service
providers, which provide access to private networks on a private
contractual basis, are subject to contribution obligations.[101] In this
regard the Commission stated that these entities could not provide their
services to others for a fee without benefit of access to the public
switched telephone network,... We invite commenters to address whether
this reasoning would be applicable under a connection-based assessment
system and, if so, how to structure a definition of connection to
encompass connections to private networks.
This is part of one paragraph from a 72 page notice. One of the most
interesting features of the document is how it entirely ignores
University/Govt communications resellers.
If your school provides dorm phones through a centrex arrangement,
the paragraph on private networks would not apply. But the proposed
changes affect us all.
This is only my opinion: that the NPRM poorly describes the current
University exemption reflects a danger that our favorable treatment
could get steam roller flattened if we don't participate in the rule
making process.
===
The previous notice affects schools in the telephone business. In a
separate proceeding issued the same date, the FCC is considering
that perhaps they should spread the burden of funding Universal
Service to ISPs. This is in FCC 02-42:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-42A1.pdf
While this NPRM begins with a discussion of "information service"
versus "telecommunications service" and how to classify that for
wireline carriers, it ends up in Paragraph 74 asking [page 34]:
Specifically, we ask whether broadband Internet access providers
that supply last-mile connectivity over their own facilities
should be required to contribute to universal service based
upon their self-provisioning of telecommunications. **
If the FCC did this, it seems like the check list of questions
would be:
1. Does the service run faster than 200 Kb/s? [Is it broadband?]
2. Does the service connect users to the Internet?
3. Do students pay for the service either directly or
through their housing fees?
4. Does the school own the wire in the residence halls?
This note gets my usual disclaimer: Please do not confuse my
expression of concern for legal advice. Read the source materials
yourself. Your options include:
1. Find a communications lawyer
2. File your own comments directly with the FCC
using their electronic comment filing system
3. Write your congressional representative and tell
her that you don't fully understand this but you
want them to assist your school in protecting its
interests.
==================
** Definition
"Telecommunications" is the transmission, between or among points
specified by the user, of information of the user's choosing, without
change in the form or content of the infomration as sent and received.
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