COMMENTS OF MEDIA ACCESS PROJECT, CENTER FOR DEMOCRACY AND TECHNOLOGY, THE BENTON FOUNDATION ELECTRONIC FRONTIER FOUNDATION, AND VOTERS TELECOMMUNICATIONS WATCH

Media Access Project, the Center for Democracy and Technology, the Benton Foundation, Electronic Frontier Foundation, and Voters Telecommunications Watch (hereinafter collectively referred to as "Commenters"), respectfully submit the following comments in response to the Commission's Notice of Proposed Rulemaking, Third Report and Order, and Notice of Inquiry, released December 24, 1996 in the above referenced docket ("NPRM"). These organizations represent the interests of the public, including both current and future users of the Internet and similar interactive computer networks. Specifically, Commenters address these comments to the portions of the NPRM that consider whether to "permit incumbent LECs to assess interstate access charges on information service providers." NPRM at ¶¶282-90.

I.     THE COMMISSION SHOULD CONSIDER THE EFFECTS OF THIS PROCEEDING ON THE ABILITY OF ALL AMERICANS TO ENGAGE IN ONLINE SPEECH AND TO HAVE EQUAL ACCESS TO INFORMATION.

Commenters urge the Commission to keep in mind that the issues presented in this section of the NPRM have an impact which goes far beyond the profitability of the industries involved or the alleged congestion to the public switched voice network. The Commission has erroneously focused only on the conflict between incumbent LECs and the information services industry, and has downplayed the needs of information service users.¹ In the NPRM, the Commission notes that the information services industry has grown dramatically, and recites the policy of the Telecommunications Act of 1996, Pub. L. 104-104 (1996)("Act"), as well as its own longstanding goal, to avoid unnecessary regulation of this industry. NPRM at ¶282. It posits, however, that there may be an increasing effect from such services on the public switched network, and it asks how its rules can provide "incentives for investment and innovation in the underlying networks that support the Internet and other information services." Id. at ¶¶282-83. Moreover, in tentatively concluding to continue to apply the existing rate structure to ISPs, it states that a central concern is the "potentially detrimental effects" on the information services industry. Id. at ¶288.

What is absent from this discussion is any mention of the effects on the citizens who use or benefit from the use of information services. Indeed, the Internet has assumed an important and growing role in the social, economic, and political life of its users. Thus, if the Commission regulates the information services industry, it would also regulate an arena of citizen speech and political discourse; a measureless source of information and entertainment; and an efficient, international means of commerce.² Furthermore, Commenters believe, under the Communications Act's mandate that the FCC ensure that common carrier rates remain "just and reasonable," 47 USC §201, the Commission cannot limit the debate by overlooking the impact on the users of the Internet. Thus, the Commission must also consider how a change in the rate structure for ISPs would affect this new means of expression and communication, and whether it would limit the ability of lower-income Americans to access the Internet.

II.     THE COMMISSION SHOULD CONTINUE TO APPLY THE EXISTING PRICING STRUCTURE TO INFORMATION SERVICES PROVIDERS.

Commenters applaud the Commission's tentative conclusion that the existing pricing structure for information services providers "should remain in place at this time." NPRM at ¶283. As it has observed throughout the NPRM, the Commission notes that the existing access charge regime "includes non-cost-based rates and inefficient rate structures," and should not be extended to an additional class of users, especially the still-evolving information services industry. Id. at ¶288.

Commenters agree with this conclusion that, on legal and policy grounds, the Commission should continue to exempt ISPs from the current access charge structure. Imposing these fees would risk quashing the broad participation and high accessibility of what has become a highly important mode of speech. The Commission should only discontinue the exemption - if at all - after careful consideration, and in any event not until after the existing access charge structure is r formed.

The Internet has become a significant mode of democratic participation, and imposing access charges could have enormous detrimental impact on its market penetration as well as its egalitarian and open nature. See NPRM at ¶288. These usage-based fees might be borne by ISPs, at the risk of causing industry fallout, or passed on to consumers, which could diminish total use and especially limit use by lower-income citizens.³ In either event, this is a major decision with far-reaching implications not only for the industry, but for citizen speech and access to information.

By many accounts, the Internet has experienced rapid growth precisely because government has not extensively regulated it. See Act, §230(a)(4). More specifically, it has allowed service providers to compete freely with flexible pricing options that respond to user needs. This flexibility and competition is beneficial, especially in such a rapidly growing and evolving industry. The Commission should, therefore, be very careful before imposing a new pricing structure, and should closely examine its need and probable impact.

The Notice of Inquiry which was initiated as part of the NPRM proposes to conduct exactly this type of exacting scrutiny, NPRM at ¶¶311-18, and Commenters believe it would be a better forum to examine these questions. Indeed, the Commission heard a large body of testimony at its Bandwidth Forum on January 23, 1997, that shows that there are many broad, complex questions surrounding capital investments, technology, and the economics of both voice networks and interactive computer networks. These are the type of questions, and will have the type of long term implications, that merit the careful study of a separate proceeding.

Before determining whether to apply access charges to ISPs, the Commission should wait until it has better determined how it will reform these charges as a whole. Existing fees have been widely denounced as inefficient and unfair, and the NPRM proposes to make several changes in their structure. It would be arbitrary in the extreme to impose these charges on a fledgling industry, especially when their structure is in flux.

CONCLUSION

In light of the likely change in access rates; the undetermined impact upon the public switched networks, ISPs, and Internet speakers and users; and the rapidly changing nature of the Internet and data network technologies, application of the interstate access charge regime to ISPs would be fraught with risk, at least at this time. Commenters agree with the commission's assessment that, "[There is] no reason to extend this regime to an additional class of users..."

2.     See Appendix A for a list of examples of politically oriented web sites and newsgroups, which is also available online at: <http://www.cdt.org/policy/terrorism/internet_bomb .test.html#appendixA>. The significance of the Internet as a means of speech and source of information has been recognized recently both by the courts and Congress. "It is no exaggeration to conclude that the Internet has achieved, and continues to achieve, the most participatory marketplace of mass speech that this country - and indeed the world - has yet seen." ACLU v. Reno, 929 F.Supp. 824 (E.D. Pa. 1996)(opinion of Dalzell, J.). Congress found in the 1996 Act that the Internet and other computer services "represent an extraordinary advance in the availability of educational and informational resources to our citizens....[and] offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity." Act, §230(a)(1), (a)(3).

3.     Commenters wish to clarify, however, that this statement addresses both possible effects of the imposition of fees, and makes no attempt at this time to estimate the probability whether such fees would be borne by ISPs or passed on to consumers.

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