California Questions Internet Access Rates

California’s Public Utilities Commission is expected to consider Thursday whether calls made from a user to an Internet service provider should fall under local or long distance charges.

According to published reports, the proposal stems from an argument between telephone company Pacific Bell and local telco Pac-West Telecomm Inc., a competitor that serves as a carrier for ISPs. Currently, calls to ISPs are considered local calls, yet the user’s telephone company must pass along the call to the ISP carrier, which charges a fee for the service.

Many local telephone companies serve only ISPs, so the carrier fees are not reciprocated equally.

At Thursday’s PUC meeting, regulators will consider re-categorizing Internet calls from local to long distance connections, the Los Angeles Times reported.

Industry players are anticipating the decision, which could set a precedent affecting all California ISPs and their agreements with PacBell and GTE, the state’s largest phone companies. Critics told the Times that switching prices will force some local ISPs out of the market and that Internet customers will end up with higher fees.

The disagreement between PacBell and Pac-West came up after PacBell quit paying Pac-West in August 1997 to protest the charges. Pac-West officials told the Times that as a result, the company is owed $50 million.