Bell Atlantic Responds to Masschusetts DTE Decision on Reciprocal Compensation Fees

Bell Atlantic Responds to Masschusetts DTE
Decision on Reciprocal Compensation Fees

Commission Decision Avoids Internet Tax on All
Telephone Users

May 19, 1999

BACKGROUND -- The Massachusetts Department of
Telecommunications and Energy (DTE) today confirmed the Federal
Communications Commission's (FCC) February ruling that all calls to the
Internet are interstate and not local calls. Under the Telecommunications
Act of 1996, communications companies pay each other for completing
local calls made by their competitors' customers. The following response
should be attributed to Robert Mudge, vice president of Bell Atlantic-
Massachusetts.

This is a pro-consumer decision. In doing what the law requires, the DTE
today plugged what it characterized as a "loophole" that would
have resulted in an Internet tax on all telephone users in Massachusetts.
Had the DTE not acted, Massachusetts telephone subscribers could easily
have ended up paying more than $150 million per year. That equates to a
$2.80 monthly tax on every phone line for Bell Atlantic's customers --
whether they use the Internet or not.

The facts are simple. A handful of opportunistic middlemen pocketed
millions of dollars in charges they were assessing against Bell Atlantic to
which they were not lawfully entitled. When Bell Atlantic balked at
paying these charges which would increase local telephone rates, the
middlemen sought protection from the DTE. Today's decision stops these
payments and requires the parties to negotiate.

Their claim that Internet fees would increase if the loophole were closed
was, and is, pure nonsense. Internet Service Providers (ISPs) generally
charge about $20-$25 per month regardless whether they use Bell Atlantic,
another local exchange carrier, or one of these other companies.

The DTE said it best, "The Internet is powerful enough to stand on
its own, without... subsidies. "