Federal regulators have wisely adopted a "hands off" approach to the Internet. Why? The Internet has been growing like crazy. Presumably, few Congressmen or federal bureaucrats are interested in leaving their fingerprints on changes that will upset the current regulatory framework.
Consumers and businesses have been the winners. Consumers have enjoyed low Internet rates without having to worry about per-minute charges. A thriving Internet has supported 2.5 million jobs and 50,000 companies.
Call it enlightened self-interest. While Internet tax and regulation schemes are floated from time to time in Washington, they rarely find anyone in Congress who's willing to risk killing the golden goose. Right now, though, there's a bill in Congress that would upset the current regulatory framework, and could increase consumer Internet costs by up to 33 percent. The worst part: The Baby Bells would keep the money. Obviously, the nation's dominant phone companies support the bill.
It's unusual to have Internet executives, consumer groups, and state regulators all on the same side of an issue. But a range of business and consumer interests, including Consumer Federation of America, Consumers Union, Information Technology Association of America, and the American Internet Service Providers Association have lined up to oppose the proposed changes.
The state regulators association called the legislation a "special exemption for the Bell companies" and warned Congress not to pass the bill. Frankly, none of us thought Congress would even consider the bill. We were wrong.
The Baby Bells have a leg up. Sponsored by Bill Tauzin (R) of Louisiana, "The Reciprocal Compensation Adjustment Act of 2000," or HR 4445, has cleared the House Telecommunications, Trade, and Consumer Protection Subcommittees. It's well on its way to becoming a law, which could happen by Congress's scheduled adjournment on Oct. 6.
When Baby Bell customers use the network of a competing phone company to reach their Internet service providers (ISP), the Baby Bells are required to help pay for that call. The fee is called reciprocal compensation. If Congress ends the practice of treating Internet calls as local calls, as "local" phone companies, the Baby Bells will no longer have to help their customers log online.
Internet users would have to make up the difference, and ISPs estimate that rates will go up 18 to 35 percent to cover the shortfall. The legislation wouldn't require the Baby Bells to refund the money to their customers. Equally bad, the legislation makes a big dent in the fragile regulatory framework that has incubated the Internet.
States now have the right to treat Internet calls as local calls and determine whether the Baby Bells should pay reciprocal compensation. Thirty-three states that have heard this issue have done just that. So the Baby Bells took the issue to Congress.
Right now, the federal government doesn't distinguish between your Internet-bound phone calls and your calls to your mother, sister, or local pizza parlor. That's given the Internet some protective camouflage against unwanted taxes. This bill would put Internet traffic into a separate category, which is one step away from its own special tax.
Businesses thrive on certainty. The fewer rules you change the better, and when you do, you'd better get it right. Consumers benefit from low rates. If this bill passes, both lose. We should demand a thoughtful "measure twice, cut once" approach to Internet policy. The tail end of a congressional session amid the raging currents of an election year is the wrong time to make big changes. When we do decide to stir the pot, let's make sure that the Baby Bells aren't the only ones who benefit.
-- Sue Ashdown is executive director of the American Internet Service Providers Association.
(c) Copyright 2000. The Christian Science Publishing Society