IPcentral Weblog
  The DACA Blog

Wednesday, February 23, 2005

AT&T Loses $500 Million Gamble
(previous | next)

The FCC has decided that AT&T is retroactively liable for those access charges and universal service contributions it actively withheld in conjunction with its calling card service. The shell of its former self had claimed that the card, which required end-users to endure an advertisement before connecting a call, constituted an interstate information service. Such is the lawyers' incentive created by the info/telecom service distinction enshrined in the '96 Act. And yes, it is conceded at the outset that universal service and intercarrier compensation are in need of reform. However, AT&T was pursuing these ends legitimately through, for instance, its participation in the intercarrier compensation forum. So recent history suggests that it was less of an effort to incite sweeping regulatory change than it was an attempt at regulatory arbitrage.

Nevertheless, the facts were such that AT&T was able to wage an effective public relations war, pitting the financial interests of our soldiers fighting in Iraq against the interests of universal service and access charge recipients. The strategy showed some promise. Last fall, Congress inserted language into an omnibus appropriations bill which would essentially exempt AT&T from paying these fees.

However, as the FCC explained in its order and Chairman Powell expanded upon in his statement, the military issue was a convenient red herring. Other calling card providers who pay access charges and make their USF contributions were still able to offer calling cards to military personnel at rates comparable to those offered by AT&T. Notably, AT&T also argued that its calling card service is a form of "universal service" for low-income families. This argument would have more rhetorical value, were it not for the inconvenient little fact that AT&T was refusing to make universal service contributions in the first place!

I do admit feeling a wave of nostalgia in writing this since, if the SBC/AT&T merger goes through, this may be the last great arbitrage effort by AT&T that is snuffed out by an agency or the courts. The previous effort involved AT&T's effort to exempt its CallVantage service from access charges, which was similarly dismissed by the FCC. Oddly, the FCC issued an NPRM today asking whether, in part, a recently marketed AT&T calling card which utilizes IP transport over a portion of the calling path should be subject to access charges. Assuming the issue is factually similar to that which has already been decided by the Commission, I'm guessing no.

posted by @ 9:13 PM | Capitol Hill , Communications , Communications , The FCC

Share |

Link to this Entry | Printer-Friendly

Post a Comment:

Blog Main
RSS Feed  
Recent Posts
  EFF-PFF Amicus Brief in Schwarzenegger v. EMA Supreme Court Videogame Violence Case
New OECD Study Finds That Improved IPR Protections Benefit Developing Countries
Hubris, Cowardice, File-sharing, and TechDirt
iPhones, DRM, and Doom-Mongers
"Rogue Archivist" Carl Malamud On How to Fix Gov2.0
Coping with Information Overload: Thoughts on Hamlet's BlackBerry by William Powers
How Many Times Has Michael "Dr. Doom" Copps Forecast an Internet Apocalypse?
Google / Verizon Proposal May Be Important Compromise, But Regulatory Trajectory Concerns Many
Two Schools of Internet Pessimism
GAO: Wireless Prices Plummeting; Public Knowledge: We Must Regulate!
Archives by Month
  September 2010
August 2010
July 2010
June 2010
  - (see all)
Archives by Topic
  - A La Carte
- Add category
- Advertising & Marketing
- Antitrust & Competition Policy
- Appleplectics
- Books & Book Reviews
- Broadband
- Cable
- Campaign Finance Law
- Capitalism
- Capitol Hill
- China
- Commons
- Communications
- Copyright
- Cutting the Video Cord
- Cyber-Security
- Digital Americas
- Digital Europe
- Digital Europe 2006
- Digital TV
- E-commerce
- e-Government & Transparency
- Economics
- Education
- Electricity
- Energy
- Events
- Exaflood
- Free Speech
- Gambling
- General
- Generic Rant
- Global Innovation
- Googlephobia
- Googlephobia
- Human Capital
- Innovation
- Intermediary Deputization & Section 230
- Internet
- Internet Governance
- Internet TV
- Interoperability
- IP
- Local Franchising
- Mass Media
- Media Regulation
- Monetary Policy
- Municipal Ownership
- Net Neutrality
- Neutrality
- Non-PFF Podcasts
- Ongoing Series
- Online Safety & Parental Controls
- Open Source
- PFF Podcasts
- Philosophy / Cyber-Libertarianism
- Privacy
- Privacy Solutions
- Regulation
- Search
- Security
- Software
- Space
- Spectrum
- Sports
- State Policy
- Supreme Court
- Taxes
- The FCC
- The FTC
- The News Frontier
- Think Tanks
- Trade
- Trademark
- Universal Service
- Video Games & Virtual Worlds
- VoIP
- What We're Reading
- Wireless
- Wireline
Archives by Author
PFF Blogosphere Archives
We welcome comments by email - look for a link to the author's email address in the byline of each post. Please let us know if we may publish your remarks.

The Progress & Freedom Foundation