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Verizon Ruling May Tax Dial-Up Customers
cellocgw writes "The Boston Globe is reporting that a court ruling in Verizon's favor could effectively allow phone companies to charge dial-up users on a per-minute basis." From the article: "About 68 percent of US internet users now connect via broadband, according to the latest data from Neilsen//NetRatings. That still leaves millions of users connecting the old way, in which modems in their home call local numbers over a telephone line to access the Internet. Precisely how many people were affected by the court ruling is unknown. Good said the number was in the thousands, but that Global NAPs did not have exact numbers and could not disclose the identities of all the companies that relied on Global NAPs for dial-up numbers."
if you are like me, and found that reading the article didn't really help explain the situation, i found that this legal document really helped. i didn't follow every bit of it, but it does present a surprisingly readable history of the case and the issues.
It's hard to believe that's how Micronians are made. Why don't we see it right now by having you both kiss one another?
You know - a tax on the stupid.
If you're using a resource -- ie. the phone line -- then why shouldn't you pay the owner according to how much you use it?
Aren't DSL Lines technically dial-up? They just use a higher frequency, but still dialing a local number and using the phone line... Correct me if I'm wrong, but assuming they can tax the dial-up (Earthlink, AOl,e tc), then could they also tax DSL users?
""The Boston Globe is reporting that a court ruling in Verizon's favor could effectively allow phone companies to charge dial-up users on a per-minute basis [CC] [MD].""
Anyone want to take a wild guess on what will happen with all those dial-up users (of which I'm one).
From the article it sounds like a single company, Global Naps, didn't pay its bill and got shut off. Global naps provided the local pops for a series of dial-up isps. Only Global Naps got cut off. Apparently the ISPs had to find some other company that presumably paid its bills to provide new local pops for their users to call.
GNAPS and others are using a loophole of sorts to provide free 800#s within LATA boundaries. The phone companies finally started to close the loophole, presumably they want to boost their own dialup revenue since they will be the only dialup alternative in the very small towns where it is not financially feasible for a real company to put in dialup modems.
I can now finally say "no" when asked, "Arent' you glad you used dial?"
Well, goodbye Internet, we hardly knew you. It's been a long, strange and wonderful ride.
I guess we can always all go back to Fidonet, using 33.6bps modems. Fortunately, the necessary software can be installed on Linux.
Unfortunately, I am not entirely joking. It's either Fidonet, or creating a some sort of cooperative (not-for-profit) ISP, based in part on WiFi technology.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Are local calls currently free for American phone users?
Either the TFA is extremely poorly written, or this story is wholly unremarkable.
Years ago when I used dial-up, I had to pay per minute, because local calls aren't free in my country.
It never did me any harm. It just added to the excitement of downloading 100MB porno mpegs.
Azural - instrumentals
Yeah, damn those bastards trying to make a profit. Profit is such a waste. It serves no purpose. Everything would be better run if it were run by non-profit organizations, or corporations whose profits were taxed 100%.
Apology to Ubuntu forum.
Yeah, damn those bastards trying to make a profit. Profit is such a waste. It serves no purpose. Everything would be better run if it were run by non-profit organizations, or corporations whose profits were taxed 100%.
The problem is not that they are making a profit: I have no problems with companies making a profit (even an indecent profit). The problem I have is when a large company like Verizon is (a) screwing customers to make even more profit and (b) creating a two-speed Internet to extort money out of both their customers and other companies.
And yes, we are talking about extortion here, which is not a normal modus operandi by any measure. Except for the Mob, but that's another story.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
What on earth are you talking about? How does a Verizon price hike for dial up users kill the internet?
Much as it's nice to blame Verizon for everything, it looks as if they have a case this time. Basically, this is about virtual numbers where the ISP has no physical presence in a local calling area, but instead pays the phone company to route the calls elsewhere. Effectively, the ISP is asking Verizon to route calls from (say) Cape Cod to Boston without paying usage charges. As the original article implies, the unfortunate side-effect of the ruling is that people in rural areas may have to pay long distance charges to access their ISP.
In my town Verison has a DSLAM installed in the CO and tells you, via online account access, that one qualifies for DSL. However they refuse to sell the service to ANYONE.
I have talked to several of the local Verizon techs and they are at a lost to explain why it isn't sold.
The can goto hell
Since most DSL providers resell LEC DSL and use PPPoE to login, effectively it is dialup. I wonder if we will all be paying per minute? If they are going charge the end points will the NSA pay to tap everything?
Especially given that its not a price hike for dialup users, but a price hike for telephone companies providing out-of-area numbers to ISPs. There are, after all, dialup ISPs (particularly the little local ones) whose access numbers are actually physically located in the local exchange they serve and who would not be affected at all by this.
ISDN is just digital phone service. Works like a normal phone line, you can even dial normal phone lines from it. It just happens to be a digital link. It, of course, offers greater flexability and features than a normal phone line, but same idea. Point to multi-point circut switched. However it's flexabilty is one of the reasons it's so costly.
DSL is a point-to-point connect. You get the line and sepcify where the other point will be. Could be an ISP, could be your work, if they have a DSLAM, etc. It then doesn't change. You can't just push buttons and change the endpoint.
Taxes are imposed by the government. If a phone company overcharges for dialup, people will switch to alternate means. I know that's not possible in some remote areas, but that would also explain high prices.
So am I now going to have to pay an additional amount every time my Tivo calls home? I have DSL already, but havn't taken the time to hack my DirectTV boxes. Is the Series 1 Tivo with a life time subscription that I gave my parrents now going to cost them a monthly fee?
The basic deal is this:
Global NAPs and Verizon agree that the end user's call to the ISP's server is toll-free [to the end user] whether or not the ISP's server is located in the same local exchange area in which the end-user originates the call.
What this means is that Verizon was transporting Global NAPs customer's telephone call to a non-local destination at Global NAP. Verizon was moving the phone call over Verizon phone lines to a distant destination - and to me, it seems reasonable given US telephone rules that Verizon shouldn't have to foot that bill - that's a basic principle of US local telephone service.
Global was merely mis-using its ability to make its phone numbers appear to be local. But Global was really located far away, and Global expected Verizon to bill them nothing, even though Verizon was doing all the long distance bit-hauling.
ISPs that perform this type of telco switch trickery will find that their business model ain't so cool any more. Too bad for them.
What more needs to be said.
---- Booth was a patriot ----
It's a little selfish for a company to pressure those consumers when the company is unwilling to invest in bringing them into the future.
I scream. You scream. I assume that means we're both acquainted with the problem. We proceed.
Has anyone ever noticed that the majority of the current monopolies in the US are a result of the government?
Natural monopolies don't usually last very long because in a true free market, it is almost impossible to limit barriers to entry without governmental help.
The government should stay away from the market and allow the markets to run their course.
Libertas in infinitum
Once i got to the gist of the issue, the above pretty much sums it up.
http://fsnews.findlaw.com/cases/1st/052657.html
Gnaps was assigning and using phone numbers (they're a CLEC) *outside* a phone number's local area, to expand their coverage area. They were scamming Verizon left & right abusing how they rate and bill local calls.
Verizon is partly to blame here, by assuming that calls coming in were "local" calls if they were from & to telephone numbers in the same exchange (NXX).
It's 100% high-grade FUD for everybody except those who got shafted by Gnap's shady schemes. Those people should be looking for another provider. This has absolutely no bearing on regular dialup users. Regular dialup POP's are equipment installed at CO's, data centers or other locations, the DCS goes & internet traffic goes out at each location; or DCS traffic is carried by dedicated line to where the POP is physically located.
from the above link...
this isn't that much different than the intra-LATA toll free numbers that are (and have been) getting shut down for similar "loopholes" that CLECs have found to abuse. neither case affects regular providers or their subscribers, only those who use a company that's been skirting the rules.
My contacts at national and wholesale dialup providers are just laughing their asses off at these particular companies who have no one to blame for their misfortune but themselves. There's a local dialup provider around here that got sucked into one of these scams, and they'll probably end up going out of business as a result of that boneheaded decision. But it's their OWN fault that they shut down their own POPs, DCS and dedicated lines that used to carry all their dialup traffic.
AFAIK, cellphone plans work the same way (that's assuming a lot, so don't kill me on details... just provide them in case I'm totally wrong here.) That is, you agree to a contract and pay a certain amount, maybe get a certain amount of minutes each month, week, whatever... and then pay any extra minutes you use. Why not apply this to dial-up usage in the same way? Customers would probably be familiar with the same system when they use their cellphones.
Or old enough to know and simply troll against The Way Things Work(tm)
Either way, I give you credit for seeing things the way they are.
This issue is a bit more complicated than you think.
The author of the article didn't understand his research. He said that according to Nielsen Ratings, 68% of US internet users connect with broadband. That's not true.
The Nielsen information for 2005 says that 68% of Americans use the internet - not necessarily through broadband. No statistics are given for broadband specifically, but they're definitely much lower. According to this article, US broadband usage will reach about 62% in 2010, and was 29% in 2004. I don't know about current stats, but it's probably near 35-40%.
This is just another nail in the coffin of PSTN service. The days of land line phones is coming to an end. Over the past few years more people are electing not to have standard telephone lines installed in their homes, instead they are using cell phnones exclusively or using IP based telephones over broadband connections. The local bell companies had better start finding another source of revenue. Land lines will disappear just like pay phones have gone virtually extinct. Same thing happened with long distance providers, like AT&T. With cell phones providing free roaming and long distance standard long distance charges are something many people don't see anymore. The only question now is how long will the local bell companies survive and how will the adapt to the changes.
Phone company may charge subscribers for services rendered by means of a traditional billing system. News at 11.
How are sites slashdotted when nobody reads TFAs?
It just sounds weird that customers are paying. I mean if I set up a 800 #, it means I'm footing the charge for each incoming call.
If the ISP creates virtual numbers at a call center/carrier (or whatever they called it), the ISP should be footing the bill that connects where the virtual number is routed from.
if ISPs don't want to foot the bill and want customers to instead, the isp should then tell the users the real phone number to call instead of the virtual number.
[user]=====[virtual #]=====[where isp is located]
the point of virtual numbers is so that people calling that number will be a local call. if you're telling me the ISP is already paying for the connect between virtual # and themselves, then I don't relly see where the problem lies.
If they're only paying some sort of setup fee and montly service charge, then it's the center managing virtual #s that is missing the big picture. as I gave the example above, 800 #s work the same way. users dial a number knowing it's toll free and the call center managing that # will reroute it to the correct place and the person/company that owns that 800# is the one that foots the bill.
HD Trailers
So here's the story. Its been a while since I've heard it so I may have some of the details wrong, but this is what happened:
First, rewind about 2 decades to the breakup of AT&T and the very beginnings of competitive local phone service. Or rather what would have been the beginning... the regional bell operating companies (RBOCs) didn't want any competition.
A couple companies said, "Look, we're going to sell phone service to this office building over here. You Mr. RBOC have to provide us with access to the local phone network." The RBOCs like Verizon said, "We don't want to. These bozos should have to buy service per-minute just like the long distance comanies. Otherwise they'll flood our network with free calls and the residential consumer who doesn't have a hundred phone lines will get stuck holding the bag."
That didn't fly in court so the RBOCs came up with a hairbrained scheme called "reciprocal remuneration": Anybody could be a competitive local exchange carrier (CLEC) but the carrier who originates a call would have to pay the carrier who receives the call a per-minute charge. Its "fair" since either company has to play by the same rules, but if you cherry-pick that office building over there, their outbound calls will exceed the received calls and you, Mr. CLEC, will pay a mountain of money to Ma Bell. So sorry. Buh bye.
This twistedly clever strategy backfired. Do you see the problem yet?
Along comes the commercial Internet. Suddenly there are scores of companies with a very special need: They have to receive a large number of phone calls 24 hours a day while originating none. Its an ISP with dialup modem banks. And along come companies like Global NAPs who know the phone company rules. What do you think they did?
That's right. They went and wired the ISPs on the cheap -- sometimes as little as a tenth of what the RBOC charged. Why would they do such a thing? Because all the calls were inbound. Every time Joe Blow dialed his ISP and stayed connected for 18 days, GNAPS got to rape Verizon for a per-minute charge.
And good for them. Verizon deserved it. Its always great to see a monopoly eat crow.
After a number of successively more effective attempts, Verizon has closed the loophole.
Since the AT&T breakup there have been buildings called "tandems" where the long distance carriers connect their phone lines to the RBOC. Each local calling area has several of these tandems. Now, if you're a CLEC you can go into Verizon's tandems and connect to Verizon. They pay their half, you pay yours and you can trade calls with all the phones served by that tandem. Which isn't the whole local calling area. If you want the whole calling area you have to go to all the tandems.
Verizon, of course, will happily sell you a "virtual" presence in the other tandems where they carry the traffic back to the one tandem you connected to. They'll even sell you a virtual presence in all the tandems and carry your calls back to a connection in another state. For a fee.
Bad news for GlobalNAPs. No more reciprocal remuneration, and worse they have to buy expensive infrastructure to multiple tandems or else pay for a virtual presence.
They didn't want the gravy train to end so they went to court. They lost.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
Out where I live, your only choice is dial up, satellite or service through your cell phone. I only have a cell phone and no land line service. Verizon will take for ever to get DSL in my area; and the cable provider is some Mom and Pop outfit I never heard of that doesn't offer Internet service, so I don't subscribe anyway because I don't have a TV.
I currently use Verizons 'National Access' Internet service with my LG VX4500, it provides 16 k/bits synchronous service that puts it about 3 times the speed of dial up. While not 'fast' it's certainly is better than dial up. I have looked into satellite, but I'm not willing to shell out $600 for the hardware; followed by a $139 a month contract for 1 M/bit service with a 275ms or worse latency.
If Verizon would get off their dead asses and either deliver xDSL or EVDO service into my area I would snarf up either of these services. The other company expanding near my area (Clearwire) is planing on offering it's service located 24 miles west of me. But I doubt I'll see this service anytime soon.
"I bow to no man" - Riddick
For the record, I have been involved with some, uh, related cases, and know Virtual NXX backwards and forwards....
.2-.3c/min).
Remember the 1988 "modem tax"? That's exactly what this is about. The Massachusetts DTE has called for that exact charge, technically called originating access, to be applied to ISP-bound calls, if the modem is in a central location (as it always is) and the caller is not physically in the modem's local calling area. So the modem tax doesn't apply to callers who are local to Quincy (GNAPs) or another big modem bank, but would apply to most of the state, where the carrier hotels aren't.
Now the sorded history in a nutshell...
Global NAPs set up shop after the Telecom Act when its owners' ISP wanted to expand its local calling area. The normal way to do this was to buy Foreign Exchange lines, which NYNEX sold for about $20/mile/T1 (23-24 channels). The Telecom Act allowed open entry for competitors, and said that for local calls, the calling LEC (local exchange carrier) would pay the called LEC for its half of the call. This is called reciprocal compensation. Bell Atlantic actually asked the FCC for this; in a 1996 filing, they demanded it, and said that if CLECs (competitive LECs, what GNAPs is) didn't like it, they should look for customers who get more incoming calls, like ISPs. Really. So GNAPs took them at their word.
Now Foreign Exchange lines are normally charged based on the distance between switches, not rate centers (billing points), and CLECs have one switch covering a lot of area, so the mileage is zero. That's what GNAPs, not to mention MFS-Worldcom, MCI, AT&T, Level 3, and various other companies, did. They could thus provide "local" dial-in numbers to ISPs. And they billed the incumbent telcos for reciprocal compenastion.
Well, the incumbents were caught off guard. Not only didn't they like the Internet, but they really didn't expect it to catch on, and were blindsided by all of this dial-up traffic going to competitors. So they asked to change the rules, and get rid of reciprocal compensation on ISP-bound calls. Global NAPs was the lightning rod for this in Massachusetts, where it was the biggest modem-serving CLEC and its leadership, frankly, had a rather "in your face" style. The Republican-appointed state Commission (DTE) ruled against them in 1999, saying "no reciprocal comp for ISP-bound calls". (The "telecom commissioner" of that era has left the DTE, and has been spotted consultling for Verizon. Duh.) The Republican-appointed FCC in 2001 adopted that as a national policy, capping ISP-recip at $.0007/minute (about a quarter of the typical voice rate of about
Then around 2003, the Romney DTE pulled a stunt on GNAPs. CLECs and ILECs interconnect via contracts, which are arbitrated by state Commissions. Verizon decided to put in new wording that FX (and Virtual NXX, what GNAPs is -- it's FX when the LEC doesn't have live customers where the number is putatively billed as) calls are "toll" calls subject to "access" charges. GNAPs objected, but the DTE let that language in. And then said that while federal law allows CLECs to adopt other CLECs' contract terms, GNAPs couldn't, because arbitration is unescapable (a rather strange interpretation of the law). GNAPs said, however, that the FCC's assertion of federal authority over ISP-bound calls -- that's how they got rid of recip on a nationwide basis in 2001, over CLEC objections -- meant that the state couldn't declare them to subject to intrastate toll access charges. Most states have held that way, and I think the Fourth Circuit Court of Appeals has upheld.
So it was rather odd that the First Circuit ruled for Verizon, though it was on some legal technicalities that GNAPs wasn't really prepared for. That left GNAPs with a theoretical $45M or so back bill for this "modem tax" access charge. They wouldn't pay, so Verizon pulled the plug.
Level 3 and some other CLECs still have different
Assuming I am NOT feeding a troll....
It is a French phrase meaning "let do, let go, let pass." First used in the eighteenth century as an injunction against government interference with trade, it became used as a synonym for strict free market economics during the early and mid-19th century. It is generally understood to be a doctrine opposing economic interventionism by the state beyond that which is perceived to be necessary to maintain peace and property rights.
You can read more in detail here:
http://en.wikipedia.org/wiki/Laissez-faire
Libertas in infinitum
Verizon offers its own Internet service to every exchange; it's not surprising that it wants to make sure that no other ISP can do the same. Strictly an anticompetitive move.
Your modem doesn't dial a number with DTMF over DSL -- technically, what happens really should not be referred to as "dialing", because it's not going over a voice link.
Modems don't "dial" with DTMF even over Plain Old Telephone Service. Technically, what happens really should not be referred to as "dialing", because there is no rotary dial. DTMF is Touch-Tone, entered through a keypad.
Thanks for the link... I still use a Wildcat BBS every day, and I contend that someday we'll see a return to the dialup BBS, when needed for email that's more secure from gov't snooping.
:)
Which is why I was disturbed by this statement from the developer (I didn't see any link to this person on the site, maybe you can direct me):
"[will not be implemented]: OLR: include private email area in download packets. See also global wish for private mail areas."
Erm... without that, it lacks one of the most =fundamental= features of *any* messaging BBS -- private email [both local and internet] AND its inclusion in QWK packets. Even FIDO has private messaging echoes.
Otherwise, it looks like a good usable BBS interface (high praise from this Wildcat bigot
As to the nominal topic, if Verizon (and by extension, any provider of local phone service) can get away with what amounts to a "modem tax" -- that also removes their incentive to replace outdated and/or defective equipment that won't even do the industry-standard 50k connection, because the more time you're stuck online, the more money they make.
I've been arguing with Verizon for almost 5 years about their broken DMS that keeps my connection at 26.4k on a good day, and often much less -- meaning I spend 2 to 4 times as much time connected as I should have to, just to get my basic online stuff done. Why should I be penalised for Verizon's broken equipment??
Reminds a person of when AOL charged by the minute.....
~REZ~ #43301. Who'd fake being me anyway?
It was only something like five years years ago that companies started offering flat rates on dial-up in the UK. Why is it being called a tax? Back in my day it was called the price of a local phone call.
Why not link your TIVO to your home network to let it access your DSL connection. Mine has a small USB WiFi dongle and it works great with no wires.
Looks like that retro 80s craze is here to stay!
But, if you live a mile off the main drag . . .
Well, I was helping a friend with his dial-up because their speeds had dropped to 7 kbps. Turns out, there were ants all through the nearest box.
It took Verizon two years before they finally replaced the whole system and now they can get 768 kbps.
Now, some folks nearby are lucky enough to have Alltel.
Alltel? They provide services to a guy who lives three miles from the nearest PAVED road!
So, I bame Verizon, all around.
I scream. You scream. I assume that means we're both acquainted with the problem. We proceed.
No, sorry but your basic assumptions are incorrect. Gnaps was assigned local numbers in remote locations from their NOC, true. However they leased/owned the pipes that transported the calls from the remote locations to their NOC - Verizon did not have anything to do with the transport, so should not have been billing for that. This situation is similar for all CLECs out there.
Wrong. GlobalNAPs bought DS3 and above from each rate center for tranporting their own calls to their NOC. Verizon did not transport, only accepted calls at the rate center and then handed off.
They're doing this because their bottom line ($) is being hit.
This is the same clever scheme that major ISPs were trying to accomplish, by making users pay for premium delivery over a network that is already being subsidized by customer funds.
Double jeopardy, bullsh*t.
I hope it's struck down, and they're put in their place.
In the US, people usually have the option of paying a flat rate charge for local calls or a plan that buys xxx number of minutes and a per-minute charge for minutes used over and above that. (for local toll calls and LD... uh, let's not get into that)
IMHO, this is a major reason why the online user population growth in the USA in the early years drastically exceeded that of any other country... there was simply no downside for users staying online for hours at a time unless one owned the modem at the other end.
This situation was reversed, of course, when broadband access became cheaper in every developed country except America.
Tech Public Policy stuff
This per minute fee is waived if you sign up for Verizon Dialup service. Kapow!
That was the most informative thing I've ever read on slashdot.
With great power comes great fan noise.
We don't get much choice, especially in rural areas, unless a company decides to take a chance.
I scream. You scream. I assume that means we're both acquainted with the problem. We proceed.
Our idea of rural is less than 5,000 residents.
Which is probably a factor in availability. Let's face it: if you have cities 100 miles away that can support a based of hundreds of thousands, why bother with the sticks?
On the other hand, out west there are stretches where you won't see a town of 5,000 people for several counties. So that would be seen as a target market.
I scream. You scream. I assume that means we're both acquainted with the problem. We proceed.