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From: James Love 
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Subject: Washington DC PSC Considers $32 flat rate ISDN tariff (fwd)
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TAP-INFO - An Internet newsletter available from listproc@tap.org
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TAP/CPT - INFORMATION POLICY NOTES
January 2, 1995

-    Washington DC PSC Staff recommends $32 flat ISDN rate tariff.  PSC 
Commission to Act soon.  CPT and others comment in support of low flat 
rate tariff.  jamie (love@tap.org, 202/387-8030).  The Comments follow:


BEFORE THE PUBLIC SERVICE COMMISSION
OF THE DISTRICT OF COLUMBIA


IN THE MATTER OF THE APPLICATION        )
OF BELL ATLANTIC - WASHINGTON, D.C.,    )
INC. FOR THE AUTHORITY TO AMEND THE     )    TT95-17
GENERAL REGULATIONS TARIFF NO. 203,     )
SECTION 14, JURISDICTIONAL RATES        )


REPLY TO BELL ATLANTIC - WASHINGTON, D.C., INC. S REPLY COMMENTS


TWELVE REASONS WHY BELL ATLANTIC S COMMENTS 
ON ISDN SERVICE ARE SIMPLY WRONG

     The undersigned consumers respectfully submit this Reply to
comments filed by Bell Atlantic - Washington, D.C., Inc. ( BA )
on December 8 and December 20, 1995, which were filed by BA in
response to the comments of the Commission Staff and the Office
of the People s Counsel. 

     1.   BA has incorrectly described the charges of its ISDN tariff,
     by failing to acknowledge the fact that ISDN data services
     are most effective when both  B  channels are used (doubling
     all of BA s estimated costs of ISDN usage).  For using both 
     B  channels, BA seeks to charge consumers $2.40 per hour
     from 7am to 7pm, and $1.20 per hour from 7pm to 7am.  The
     only way that consumers can reduce these charges is by using
     only half the capacity in the ISDN connection.  This is like
     playing basketball with one hand behind your back, swimming
     with an anchor tied to your body, or running a race hopping
     on one foot.  You can do it, but why would you want to?
     
     2.   BA seeks an open-ended usage charge of $2.40 per hour in the
     7am to 7pm period and $1.20 per hour in the 7pm to 7am
     period.  This is clearly excessive by any standard.  A
     person who uses an ISDN connection for 100 hours per month
     would be paying from $270 to $150 per month for local
     telephone service  -- roughly 10 to 18 times the current
     cost of the highest tariffed local residential telephone
     service for the DC metropolitan area!
     
     3.   BA seeks to expand the definition of peak time from 5 pm to
     7 pm.  There is no justification for this 20 percent
     increase in peak time charges.
     
     4.   BA s tariff filing is confusing, but it appears as though
     the $19.50 monthly fixed charge is a surcharge on top of the
     cost of a residential measured usage telephone service.
     
     5.   BA has failed to show how metered usage for off-peak
     residential ISDN usage will cause network congestion.  The
     fact that BA will not offer unmetered off-peak usage is
     evidence that BA wants to  tax  value added information
     services that use residential ISDN connections.
     
     6.   BA s description of ISDN users as   computer-philes  with
     more than adequate resources to pay as they go  is an
     offensive and inaccurate attempt to obscure the important
     public policy reasons to promote deployment of this
     important service.  It is true, of course, that by making
     the residential ISDN service expensive, only the wealthy
     will subscribe.  But if residential ISDN service is ever
     priced correctly, at less than $25 per month for a 2B+D
     connection, a much more diverse group of consumers will
     begin to use the service, including many working class
     families that are buying computers to work at home, or for
     the benefit of their school age children.  One should also
     consider the broader purpose of promoting ISDN usage, and
     the likelihood that new residential ISDN applications will
     develop once the service is more broadly deployed.
     
     7.   BA s filing seems to require a consumer who obtains ISDN
     service to pay a per minute metered charge for voice
     telephone calls.  The Commission presently requires BA to
     offer a flat rate for telephone service.  The current
     measured usage telephone tariff is based on a fixed charge
     per call - 6.5 cents.  The new BA ISDN tariff seeks to
     charge more than 6.5 cents for every daytime telephone call
     over 3.5 minutes.  If this will apply to voice calls it is
     clearly an excessive increase.  Consumers should not be
     required to purchase an additional telephone line to get a
     reasonable priced telephone tariff.  The Commission can fix
     this by clearly indicating that voice calls over an ISDN
     line will not be metered per minute of usage.
     
     8.   BA s failure to offer a flat rate service will prevent the
     Commission from learning about the potential benefits of
     broader ISDN deployment or ISDN usage patterns under a flat
     rate tariff.
     
     9.   BA s attempt to use excessive ISDN tariffs by other Local
     Exchange Carriers (LEC) should not mislead the Commission. 
     There are active battles over ISDN tariffs in more than a
     dozen states today, including disputes in California,
     Washington, Utah, New Mexico, Virginia, Delaware, and
     Maryland, to mention a few.  The battle is over the attempts
     by the LECs to price ISDN as some exotic service for the
     wealthy, or to price it closer to LEC costs, so we can see
     the development of an Open Platform for new digital
     services.
     
     10.  ISDN should be the immediate path for fast connections to
     the Internet.  This will not happen if states allow BA and
     other LECs to price the service excessively.
     
     11.  BA s assertions about the costs of usage should be rejected. 
     Most of the cost of an ISDN connection is the fixed cost of
     providing the copper wire infrastructure to the home.  The
     only important additional cost argument that BA has raised
     is the potential for increased interoffice truckage if ISDN
     customers become intensive users.  But the interoffice
     truckage is typically the much more economical fiber point-to-point connections between offices.  Of course, even this
     is irrelevant in the off-peak hours.
     
     12.  The most important telecommunications policy issue today
     concerns the differences in philosophy between flat rate and
     measurage usage for network services.  When costs are mostly
     (albeit not entirely) fixed, it is not economically
     efficient to connect most of the revenue from usage based
     charges.  The usage charges discourage use of the network,
     and will cripple many important new ISDN services that will
     be based upon more intensive used of the network.
     

     CONCLUSION

     In choosing between the two options presented, the
Commission should adopt the staff recommendation to require BA to
provide residential ISDN service for a flat rate of $32 per
month.  However, in our opinion, the $32 per month is itself too
high.  Indeed, we believe that BA s costs for this service are
less than $20 per month.  In his new book, The Road Ahead,
Microsoft founder Bill Gates recommends that residential ISDN
tariffs be set at less than $20 per month:

     ISDN was invented more than a decade ago, but without
     PC-application demand almost no one needed it. . . The
     [ISDN] line costs vary by location but are generally
     about $50 per month in the United States.  I expect
     this will drop to less than $20, not much more than a
     regular phone connection.  We are among companies
     working to convince phone companies all over the world
     to lower these charges in order to encourage PC owners
     to connect, using ISDN. [page 101].  

For now, the best option is to adopt either the staff
recommendation or an even more affordable alternative.  Since
there is virtually no residential ISDN usage in DC at this time,
the Commission can revisit the issue of the tariff once more is
known about usage levels, deployment, and costs.

December 29, 1995

Sincerely,

James Love
Director
Consumer Project on Technology
P.O. Box 19367, Washington, DC

Todd Paglia
2117 O Street, NW
Washington, DC 20037

Charles Bennington
1512 Corcoran St, NW, Apt 24
Washington, DC 20010

Beverely A. Orr
1672 B Euclid Street, NW
Washington, DC 20009

Janice Shields
1526 17th St. #114
Washington, DC 20036

Deneen Gabrielli
2104 18th Street, NW #2
Washington, DC 20009
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