WASHINGTON -- Rural senators who asked the Federal Communications Commission for a report on telephone subsidies and the Internet say the agency's conclusions are deficient.
The FCC, in a report completed 10 April, largely defended its policy of not requiring Internet providers to pay access charges to local phone companies used in part to subsidize rural and low-income telephone service. Long distance and wireless carriers pay substantial access charges.
Senator Ted Stevens (R-Alaska), a long-time critic of the Internet exemption, said "the FCC got it wrong."
"The house of cards established by the commission will ultimately collapse," Stevens said today at the opening of a Senate Commerce Committee subcommittee hearing on high-speed Internet access.
Stevens and other rural lawmakers worry that subsidies paid by telephone carriers alone will be insufficient to keep residential phone service affordable in their states. They argue that the Internet is increasingly being used to carry voice telephone calls and other basic telecommunications services, so Internet service providers should pay access charges.
In its report, the FCC warned that it might impose access charges on services that offer long-distance service over the Internet or similar packet-based networks, but use ordinary telephone sets in a manner similar to traditional long-distance companies.
Senator John Rockefeller (D-West Virginia) credited the FCC with going "part way," but added "they clearly left part of it uncovered."
"They talk about doing more, but we will see," he said.
Today's hearing concerned petitions from some regional Bell companies to the FCC under section 706 of the 1996 Telecommunications Act. The Bells are seeking permission to build Internet networks and offer some services free from the act's restrictions on their ordinary telephone services.
Stevens said the FCC lacked the authority to grant the petitions. Approving the petitions, he said, "will allow the Bell companies to avoid competition."
