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Excerpted from True Lies, 11/07/98:

FCC Denies 'Modem Tax' Plans... Again

** Click here for a Jan. 20, 1999 update on this story **
The FCC has repeatedly stated for the past decade -- and is stating again today -- that it is NOT repealing the ISP exemption that [prevents] Internet service providers from paying per-minute charges to local telephone companies. This is one of the great enduring urban myths.

-- FCC Chairman William Kennard, Nov. 6, 1998

It was about this time last year that a recycled email alert flooded the Net, charging that the FCC was considering a ruling to allow phone companies to charge per-minute fees for Internet access (see Jan. 7 feature). Consumers were outraged, deluging the FCC with angry phone calls and email protests -- for no good reason. The claims made in the outdated email alert were false.

Similar false rumors have circulated at intervals for the past 10 years, making the "Modem Tax" legend a classic of Internet folklore (see http://www.urbanlegends.com/classic/modem_tax.html).

"It happened again this week," Reuters reported on Friday, "when an upcoming FCC decision over how local telephone carriers pay each other for exchanging traffic was widely misinterpreted as having some bearing on Internet regulation or fees. The decision is expected to be released later this month."

According to Reuters, news of the impending decision has whipped up another frenzy among consumers as rumors of "per-minute access charges" once again flew out of control.

And for the gazillionth time, William Kennard, Chairman of the FCC, was forced to announce that the ruling under consideration "has NOTHING to do with consumer Internet charges."

Pass it on.


From William Kennard's speech to the National Association of Regulatory Commissioners, 11/11/98:

"For reasons that escape me, there are those who regularly suggest that the FCC is considering the imposition of per minute charges on Internet providers. The forces behind these rumors are doing a disservice to the American consumer, because in fact nothing could be further from the truth. But somehow these rumors keep arising, often on the Internet itself. I know, because I receive hundreds and thousands of e-mails every time this rumor arises.

"I know that many of the e-mails I receive are from well-meaning, but misinformed, people who are concerned about the future of the Internet. I applaud their vigilance and I am glad to assure them that the FCC is not about to impose per minute charges on the Internet."

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