> WASHINGTON TELECOM WEEK : In studying the likely impact
> of impending access charge reform on Internet Service Providers (ISPs),
What impending access charge reform? Where can I read about this?
> analysts anticipate a sharp decline in the number of providers. This
> decline, they say, will be a direct result of fees they will be required to
> pay for the privilege of connecting to the networks controlled by local
> exchange carriers (LECs).
> per month and will not be able to absorb that cost or pass it through to
> customers.
>
> The analysis was conducted by Bern Communications, a New Jersey-based firm
> dedicated to helping independent LECs profit from the Internet. Bern founded
Obviously they are then biased towards lec's. I would take this report
with a grain of salt.
> its study on the premise that the Federal Communications Commission, in an
> upcoming access charge reform proceeding, will eliminate the access charge
> exemption which Internet service providers have historically enjoyed.
What access charge are you referring to?
> Bern's analysis concludes that almost 85% of the Internet service firms are
> not adequately capitalized to absorb the estimated access charges. Internet
> subscribers, who are accustomed to paying a flat, monthly rate which many
> say is below cost, will not tolerate an additional $56 fee. Bern predicts
> that the "prognosis for those firms is extinction."
But the article just said that the ISPs would NOT be able to pass the $56
fee on to subscribers. Isn't the article contradicting itself here?
> For telephone companies, however, the situation provides an opportunity, a
> source with the company said. As the smaller ISPs go out of business and the
> larger providers shift to traffic-sensitive and subscription-based pricing
> to cover the cost of access, the telcos will have the chance to get into the
> Internet business.
> Industry observers say this will also offer an opportunity for alternative
> local exchange providers to enter the local market through the back door. By
> offering Internet service, IXCs or other new entrants will be able to gather
> information on customer needs and usage patterns.
I see this article as more of a scare tactic because now there is more
competition for lec's and they will be loosing business to ISP's that want
to act as lec's.
> Other predictions would have on-line service providers building their own
> wireline networks or turning to wireless technologies to avoid LEC access
> charges. There could be major ISP mergers that will invest in independent
> infrastructure.
Unless the FCC forces ISP's to pay a lec, then this will not happen
because there is now MORE lec competition.
Now having said that, I think that the LEC's will start putting local
ISP's out of business because they can offer lower rates especially to
larger customers for internet access since the infrastructure is THEIRS
and its already in place.
~*-,._.,-*~'`^`'~*-,._.,-*~'`^`'~*-,._.,-*~'`^`'~*-,._.,-*~'`^`'~*-,._.,-*~
Jake Messinger 713-772-6690 jake@ams.com
Advanced Medical Systems, Inc. 800-324-8594 jake@uh.edu
Houston, Texas http://www.ams.com/~jake
~*-,._.,-*~'`^`'~*-,._.,-*~'`^`'~*-,._.,-*~'`^`'~*-,._.,-*~'`^`'~*-,._.,-*~
(Don't steal my squigglies)