House panel OKs bill to thwart imaginary ‘Schnell’

House panel OKs bill to thwart imaginary ‘Schnell’ 

By Rod Perlmutter, News Editor, Media Central

KANSAS CITY, Mo., May 12, 2000 (Media Central) –This week, Congressman Schnell couldn’t find anyone on Capitol Hill who would back his proposal to impose a surcharge on every e-mail.

That’s because nobody could find Congressman Schnell.

On this, both Republicans and Democrats agree: there is no Congressman Schnell. He doesn’t exist, nor does his imaginary piece of legislation, “H.B. 602P.”

But rumors about the imaginary congressman and his proposal were enough to get the House Commerce Committee to approve a bill on Wednesday that specifically prohibits the Federal Communications Commission from placing access charges on Internet service providers.

Rep. Rick Boucher (D-Va.) said the bill was unnecessary. The FCC has said repeatedly that it has no plans to impose access charges on ISPs. Even Republicans agree that the FCC has not imposed an access charge, and nobody in Congress wants one, Boucher said.

“It’s an imaginary problem to address an imaginary bill by an imaginary congressman, and the process is ludicrous,” Boucher said Friday from Washington.

But Rep. Billy Tauzin (R-La.), in a statement posted this month on his website, said the bill was needed as a preemptive measure “to close this door and guarantee that such charges will not be imposed.”

      The deluge of e-mail

The House Commerce Committee passed an amended version of the bill, H.R. 1291, the Internet Access Charge Prohibition Act, on Wednesday. Both the original bill and the amended version were proposed by Rep. Fred Upton (R-Mich.)

For more than a year, the FCC had denied that it wanted to impose an Internet access charge. According a press release posted on the FCC website last year, the commission “has no intention of assessing per-minute charges on Internet traffic or changing the way consumers obtain and pay for access to the Internet.”

The FCC press release said false fears about ISP access charges resulted from a statement last year that the commission was considering public comments on carrier-to-carrier payments, or fees paid from one local telephone company to another for completing a local call that is placed by one of its competitor’s customers.

But that denial didn’t stop the rumors, which Boucher and others assumed were spread through the Internet.

“Every office on Capitol Hill has received e-mail about Congressman Schell,” Boucher said.

One variation of the rumor was denied by a press release posted by Rep. Billy Tauzin.

The rumor was that “Congressman Schnell has introduced Bill 602P to allow the federal government to impose a 5-cent surcharge on e-mail messages delivered over the Internet,” the Tauzin message stated. “It states that the money would be collected by Internet Service Providers and then turned over to the US Postal Service.

“The rumor, of course, is completely false,” Tauzin’s statement continued. “The fact of the matter is that there is no such Congressman and bills are not named in this fashion. Officials with the U.S. Postal Service have stated that they would never contemplate such legislation, nor would they support this legislation.”

Upton, in testimony submitted to the House Telecommunications Subcommittee on May 3, said he and other Congressmen had received thousands of e-mail messages about Schnell and his proposal. But the rumor mill continued to grind.

“Around the same time, another, similar e-mail campaign suggested that the FCC was going to impose a per-minute access fee on Internet use,” Upton said in his statement. “Again, our constituents flooded our offices with e-mails to express their outrage.

“Upon closer examination of this rumor, the FCC was asked if it was going to authorize a per-minute access fee on Internet use. In reply, the FCC stated that it had no plans at the present time to authorize such a fee.

“While I am glad that the FCC has no plans at the present time to assess such a fee, I am troubled … that there is nothing to prevent the FCC from doing so tomorrow, or the next day or the next.”

That’s why he introduced H.R. 1291, Upton said.

Boucher said the bill was both unnecessary and a political ploy by the Republicans.

“This is one piece in a series of bills that are being rushed to floor without benefit of hearings and subcommittee markups, simply for purpose of allowing the majority party to make a statement that they are committed to do something about information technology issues,” Boucher said. “This bill is designed to resolve an imaginary problem created by a lot of e-mail traffic.”

Boucher said that the only good that may have come out of the bill was its symbolic aspect.

“It puts Congress on the record as stating that it does not want to institute any per-minute Internet charges,” Boucher said. But no one has said they want per-minute Internet charges, he said. The bill is similar to a non-binding “sense of the Congress” resolution, he said.

Upton, Boucher differ on the digital divide

Over the past several months, members of both parties have made statements about their concern about the “digital divide,” the growing gap between those Americans with access to the latest in telecommunications and communications technology, and those without. Members of Congress have, at various times, described the divide as between rich and poor, or between urban and rural.

Upton and Boucher both said the Internet access charge debate is one part of the digital divide. But while Upton said his bill addresses the problem, Boucher said it ignores a looming problem for rural residents.

“A per-minute charge would fall disproportionately on lower income families,” Upton said in a press release issued when he introduced the bill in March. “I get thousands of emails from my constituents every month – many would be less able to afford to email me otherwise. Any measure that has the possibility of shutting out anyone out of the process disturbs me.

“But it goes way beyond that,” Upton said. “Keeping the Internet free from per-minute charges keeps communication between families who have loved ones overseas or in another state affordable. Forcing folks to watch the clock when communicating with their loved ones is just not fair.”

Boucher said on Friday that the debate about the imaginary Schnell ignored the issue of long-distance Internet telephony, and its possible effect on subsidies for rural phone service.

Since the 1930s, all telephone companies that provide telephone services between states pay a fee to the federal Universal Service Fund, which pays subsidies to make phone service affordable and available to all Americans, including: consumers with low incomes; consumers who live in areas where the costs of providing telephone service is high; schools and libraries; and rural health-care providers. The telephone companies pay a fee of less than four percent of the amount they billed in the previous year to residential and business customers. The exact percentage that companies contribute is adjusted quarterly based on projected universal service demands.

Local phone companies recover the costs of their universal service contributions through “access charges” levied on long distance companies.

“One reason we don’t hear anybody talking about an ‘analog divide’ is that, through the Universal Service Fund, about 96 percent of Americans can afford phone service,” Boucher said. This Universal Service Fund is crucial to Boucher’s constituents, many of whom would not be able to obtain phone service if the fund subsidies didn’t bring the price down to affordable levels, he said.

But what happens if millions of American change from traditional voice-based long distance service to Internet telephony long distance? Local phone companies, under the current system, will not be able to charge access fees, because the Internet connection will be local.

If the traditional voice-based long-distance services drop, that means so will charges paid to the Universal Service Fund. If that continues, that would endanger subsidies for rural phone service, and the price of service could rise so high as to be out of reach of most rural residents, Boucher said.

“At the proper time, as telephony migrates to Internet and replaces long distance voice traffic, some mechanism will have to be found to replace the funding for the Universal Service Fund,” Boucher said.

Upton’s amended bill made a nod in that direction, Boucher said, though it was not explicit.

The original bill made no mention of Internet telephony services. The amended bill stated that the FCC will be allowed to impose access charges on the providers of Internet telephone services.

“The result is that the commission is not prohibited by this bill from creating a mechanism to continue to sustain Universal service,” Boucher said. “I’m confident at no point in time will the FCC impose a per-minute charge on individual ISP users for sustaining Universal service. But the commission might consider some form of flat charge, probably imposed on the Internet Service Providers.”

While some of those charges may be passed down onto long-distance Internet telephony users, these consumers may still end up saving money because they are no longer paying bills for the traditional voice-based telephone service, Boucher said.

# # #

© 2000 Media Central, an IndustryClick community. All rights reserved.

Permission to repost article granted by IndustryClick. 

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