From: tad@ssc.wa.com (Tad Cook)
Newsgroups: alt.folklore.urban,comp.dcom.modems
Subject: Re: Modem tax back
Date: 18 Aug 92 21:52:29 GMT
Organization: very little

In article <1992Aug14.011442.4969@xn.ll.mit.edu> olsen@xn.ll.mit.edu writes:
>tad@ssc.wa.com (Tad Cook) writes:
>>I am saying that Compuserve ... pays NOTHING (other than for the
>>point of presence) while other carriers pay the tarriffed rate.
>
>Compuserve and its subscribers pay standard local rates for standard local
>calls.  If you persist in calling this 'nothing', then I'm afraid it's
>pointless to argue with you.

AT&T and Sprint subscribers pay their local phone bills too....but that doesn't
mean that under the tarrifs that AT&T and Sprint don't have to pay
carrier access charges for their point of presence.  Again, Compuserve
pays NOTHING in the way of access charges for their connection to
the local network.  Why?  Because they have successfully re-cast
this as a "modem tax."  There is no modem tax.  Compuserve just
doesn't want to pay for the same local network access that other
networks have to pay for.

>
>>The "idea" that residential rates are subsidized by business rates
>>is not a "canard"  (a false or unfounded story).
>
>In arriving at the above statement, what method did you use for
>apportioning the cost of call switching equipment between residential
>and business users?

Huh?  Are you kidding?  Its not my job!  Just because I dare to
question the lie of the modem tax, I now have to apportion costs
of the network in order to explain universal service?

>
>>Remember the local telco has a regulated rate of return.  You cut
>>someone's rates, and everyone else's goes up.
>
>The 'regulated rate of return' includes two factors which may
>be amenable to change:
>
>  1) illegal cost-shifting, and
>  2) monopoly inefficiency.
>
>Factor 1) is under control of the RBOC management, and could presumably
>be reduced if necessary.  Factor 2) is absolutely inevitable in any
>monopoly, and is a hidden cost of any system (like cross-subsidies)
>which inhibits competition; when competition comes, we'll see just how
>important it is.


Complain to the PUC.  Have them investigate these allegations of
yours that the local telco is illegally shifting costs.  But please
quit spreading network urban legends about a "modem tax" that
doesn't exist.

>
>>>The proper way to subsidize universal service (if necessary) is to have
>>>all telephone rates based on cost, unbundle the rates to allow
>>>competition in telephone switching, and to levy a tax on top of all
>>>these rates to subsidize residential service...
>
>>Oh, great!  Then the rural users pay thousands of dollars per
>>month for the "true cost" of providing service into low desity
>>areas, and the telcos just fight over providing the lowest cost
>>service to big customers in the city.  Some telephone service!
>
>IF some residential users (rural or urban) need a subsidy (a thing of
>which I'm not persuaded, but am willing to consider as possible) then
>the subsidy should be paid for by all the other subscribers, who
>benefit from universal service.  Why should long-distance networks
>(data and voice) be the sugar-daddies for everyone else?


Again, complain to the PUC.  Don't claim that just because you
don't support the concept of cross-subsidies supporting
universal telephone service that this somehow gives Compuserve
the right to a special break on rates.  Or justifies spreading
alarmist lies about a "modem tax" that doesn't exist.


-- 
 Tad Cook     |  Phone:  206-527-4089  (home)     |   MCI Mail: 3288544   
 Seattle, WA  |  Packet: KT7H @ N7DUO.WA.USA.NA   |   3288544@mcimail.com 
              |  Internet: tad@ssc.wa.com        or...sumax!ole!ssc!tad   
Newsgroups: alt.folklore.urban,comp.dcom.modems