

Computer underground Digest    Wed, Feb 5, 1992   Volume 4 : Issue 05

       Moderators: Jim Thomas and Gordon Meyer (TK0JUT2@NIU.BITNET)
       Associate Moderator: Etaion Shrdlu

CONTENTS, #4.05 ( Feb 5, 1992)
File 1: US West / Oregon PUC Hearing Summary
File 2: US West / Oregon BBS Rate Case

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Date: 29 Jan 92 19:13:44 CST
From: Telecom Digest Reprint (telecom@eecs.nwu.edu)
Subject: US West / Oregon PUC Hearing Summary

(Attempts by telecom companies to increase rates for BBSs by
classifying them as businesses continues to plague hobbyists.  Most
states have multiple companies serving customers, so there is no
consistent policy within a given state. In Illinois, for example, GTE
(formerly Contel) has had a BBS-as-business policy for several years
but has never enforced it. Because GTE only recently took over Contel,
it is unclear how they will act in the future, but Contel
spokespersons indicated last summer that they only raised the issue if
somebody brought it to their attention, and no one could think of an
Illinois BBS that paid business rates.  In the past year, other state
public utilities commissions (PUCs) have authorized telecos to charge
BBSs with business rates (eg, Indiana, Michigan), and the issue is
currently alive in Illinois.

The following summary of the Oregon Public Utility Commission hearings
addressing BBS rates is reprinted from Telecom Digest.  Telecom Digest
is the best source for technical and other information on
telecommunications, and is accessible either through usenet
(comp.dcom.telecom) or from the TD mailing list (contact the
moderator, Pat Townson).

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 (Forwarded from Fidonet echo PNB-BELL)
 Message #1241 "PNB.Bell"
 Date: 29-Dec-91 10:53

This was posted by Bob Covington who was there:

NOTES ON PUC HEARING (Wagner vs. US West) - 12/10/91
REFERENCES:
  ORS 759.210
  Rules and Regulations Section 12 (Tariff Agreement)
  Schedule 1-A
  US West Interogatory Document

In attendance:
  13 Portland Sysops
   2 Salem Sysops
     -Bob Covington
     -Jeff Heistand
   3 US West Representatives
     -Mr. Holmes, Attorney
     -Jeff Pennington, Regulatory Manager/PUC Liaison

Points raised by US West:

1.  First Choice BBS has 618 users.  Sysop does not personally
participate in all conferences (500+) nor read all messages, nor
correspond with all users.  BBS is open to "all comers" and therefore
isn't for personal use or interest of the subscriber.

2.  US West views BBS's as "Bulletin Board Services" and refers to
users as "customers."

3.  Whether a BBS charges a subscription/membership fee or takes
donations isn't an issue for US West.  A BBS is not residential under
the Tariff section saying "... or use of the service is not obviously
limited to domestic use."  "Domestic use" may involve phone subscriber
and household members only.  Allowing the public to use a BBS is
therefore not interpreted as "domestic use."

4.  Residential rates are insufficient to recover costs of service.
Domestic rates are subsidized by 44% in an attempt to comply with
legislation calling for "universal service" (ie: access to phone
service to all citizens).  Business rates are adjusted to recover full
costs of service. Residential rates (both measured and flat rate) are
discounted 44%.

5.  BBS calling patterns meet the definitions for that associated with
business use.  Rates are set based on volume, whether calls originate
or terminate at "premise" (phone location), and other factors.  High
volumes of calls cost US West more to service than residential use.
Business rates are charged to United Way, Boy Scouts, churches and
others for similar non-residential use.

6.  Asking for residential rates for a BBS is "asking all subscribers
to subsidize your hobby."  It is unfair to ask "full cost recovery"
subscribers to subsidize residential BBS's.

7.  End users (those calling BBS's with modems) are making personal
calls and are not affected by US West's position on BBS use.  Calls
originate from the subscriber's phone when a BBS is called.  But calls
terminate at the BBS phone.  The number of terminating calls is a key
factor in determining rate charged.

8.  Higher usage means higher costs for US West.  Measured service
costs US West more to maintain than flat-rate service, due to the cost
of call counting equipment and billing on a per call basis.

9.  BBS's "go beyond the definition of immediate household use."
They provide a service to the public at large without any
attendance or involvement of the [phone] subscriber.

10. US West does not see a need to establish other subscriber billing
levels since BBS use is clearly non-residential.  Although they do
have a rate higher than residential but lower than business called
"Teen Link" which provides enhanced phone services.

11. Service costs decrease up to the previous number of installed
lines.  The number of lines included in a "drop" is determined by
demographics, intended use, expected growth and other factors.  Older
neighborhoods tend to have only two lines laid ... while newer larger
complexes have five lines standard.  Once capacity is reached, US
West's costs increase to provide more lines, and at residential rates
these costs are not recoverable.

12. US West does not keep records of calls for flat-rate subscribers,
but does for metered-rate subscribers.

13. "BBS use is a new issue with US West."  And they intend to make
adjustments to those subscribers pending the outcome of this case.
New subscriber installations for BBS use at this time are now charged
non-residential rates automatically if they are aware of such use.

14. BBS's provide an opportunity for business transactions through
"For Sale" conferences, or in messages.  Unless sysops read all
messages and have policies prohibiting any advertising, marketing or
sales activities online ... then there is no guarantee that business
isn't being conducted.

15. If a caller is confronted with the name of the BBS rather than a
person's voice, then residential use is suspect.  A BBS name, for this
purpose, is the same as a business name.

16.  There is no truth in the idea that US West is trying to put BBS's
"out of business" or that they are in competition with any proposed
services they may offer.  US West is interested in not allowing
residential BBS's to be subsidized when their use is non-residential.

Questions Raised by Hearings Officer:

1.  Is the phone answered by person or by machine?

2.  Does any advertising, small business marketing, or sales activity
ever take place on the BBS?  (excepting the equivalent of "Nickle
Ads")

3.  Are any fees of any kind collected?  Are any donations or other
income received in connection with BBS operation?

4.  Are business contacts or referrals ever made in relation to
operation of the BBS?  Is there any contact with customers or
potential customers on the BBS?

5.  Do shareware files downloaded from a BBS require payment?  Are
shareware files on the BBS written by "amateurs" in their spare time,
or by professionals?

6.  Do any of the echo conferences include advertisements for products
for sale, or does any ordering of products take place?

Timeline/Follow-ups:

Hearings Officer ordered transcript.  Will be available in 3-4 weeks.
PUC staff will research whether any previous decision relating to this
case are on file.

Opening Briefs due no later than 1/14/91.
US West final written comments due by 1/24/91.

Additional public comment accepted for 30 days from date of hearing.

By Bob Covington

              ++++++++++++++++++++++++

And here is a post by Bob listing the part of the tariff agreement
which US West is basing their claims and case on:

On August 22, 1987, the following section of "Rule and Regulation 12"
applying to US West's Business and Residence Service was adopted as
PUC Order No. 5:

A. GENERAL
   The applicability of business and residence rates is governed by
   the actual or obvious use made of the service.  The use which is
   to be made of the service will be ascertained from the applicant
   at the time of application for service.

   1.  Business rates apply at the following locations:

       A.  In offices, stores, factories and all other places
           of a strictly business nature.

       B.  In boarding houses and rooming houses with more than
           five rooms available for rent (except as noted under 2.)
           colleges, clubs, lodges, schools, libraries, churches,
           lobbies and halls of hotels, apartment buildings,
           hospitals, and private and public institutions.

       C.  At any location when the listing of "office" is provided
           or when any title indicating a trade, occupation or
           profession is listed (except as modified under the
           directory listing schedule) and at any location
           classified under 2., regardless of the form of listing
           when extension service is provided to a place not a
           part of a domestic establishment.

       D.  At residence locations when the customer has no regular
           business telephone service and the use of the service by
           himself, members of his household, or his guests is for
           the purpose of conducting a business, trade, or
           profession, or whose use of the service is obviously not
           confined to domestic use.

       E.  In general, at any place where the substantial use of the
           service is occupational rather than domestic.

   2.  Residence rates apply in locations where customers reside
       and whose substantial use of the service is domestic and not
       for purposes of conducting business.

   3.  If it is found that a customer is using residence service
       for business purposes, the Company will require the customer
       to take business service, except in cases where the customer
       use of the service is primarily for social or domestic
       purposes.  Customers moved from residential to business
       service will be notified by the Company of their right of
       appeal with the Public Utility Commission of Oregon.

Aside from the sexist language in Section D ("himself," "his"), US
West is clearly focusing (in this case at least) on proving that
because a sysop does not personally know, or have contact with all
callers to his/her BBS, that it is not "domestic use."  And that it is
the electronic equivalent of the types of locations mentioned under
Section C if the BBS provides public access.

Of course, my reading of these same sections clearly tells me that a
residential BBS does NOT fall under any stretch of the "business"
definitions herein.

Just wanted to get these online for those interested.

Hope this helps anyone.
++
"Lightfinger" Rayek's Friendly Casino: 206/528-0948, Seattle, Washington.

------------------------------

Date: Thu, 30 Jan 92 09:55:46 PDT
From: lorbit!walter_s@UCBVAX.BERKELEY.EDU(Walter Scott)
Subject: US West / Oregon BBS Rate Case

     SysOps in Oregon are facing what Texas SysOps faced and fought
not long ago -- rate hikes for BBS phone lines.  The reasons for this
action seem similar to what many suspected of SouthWestern Bell in
1988. Like SWB at that time, US West is preparing to initiate its new
gateway in several cities -- Portland, Oregon included -- over the
next 2 or 3 years. These new "COMMUNITY LINK" gateways follow up 2
operational gateways in Omaha and Minneapolis.  Could US West be
attempting to feather it's "Community Link" bed, and could the BBS
community of more than one state be at risk?

     Last Fall, US West in Oregon notified SysOp Tony Wagner of First
Choice Communications that he would have to pay business rates on his
3 BBS phone lines. In a letter received from the company, Wagner was
informed that US West considers bulletin board systems a business, and
that their view is supported by Oregon tariffs covering business and
residential service. Wagner filed a complaint at the Oregon Public
Utility Commission in October, 1991 asking that US West be prevented
from charging him business rates on his 3 BBS phone lines.

     A hearing was held in December by the Oregon PUC to take
testimony on Wagner's complaint. US West presented testimony that
asserted BBS operation is not consistent with Oregon's tariff on
residential service. US West's witness, Jeff Pennington, focused on
tariff language that describes and ostensibly requires primarily
"domestic use" of a residential phone line.

     On January 14, 1992, US West filed an opening brief in the Wagner
case (Oregon PUC Docket # UC-205). The brief amplifies on the concept
of domestic use of residential phone lines from US West's perspective.
In so doing, the brief clearly states that operation of a bulletin
board system is a business practice, and that it is irrelevant to
consider whether the SysOp receives any compensation from or for the
operation of his/her system. To support this notion, the brief makes
an analogy to United Way, who must pay business rates for phone lines
used by the organization.  The brief continues with an analysis of
perceived intent of the tariff for residential service -- claiming
that use of of a domestic nature and of personal benefit to household
members and guests in residence are solely within the scope of
residential use of a phone line.

       US West denies that there is any connection between charging
business rates on BBS phone lines in Oregon and the impending gateway
slated for Portland. The timing is enough to at least plant a seed of
doubt. There is also concern as to whether US West is poised to
attempt rate hikes in other states within the company's operational
sphere. It's important to appreciate what is happening in Oregon, and
what could happen elsewhere. For this reason, SysOps in US West
territory may wish to read the following text from the US West brief
mentioned above. This partial text of the brief excludes ONLY
footnotes and attached documents.

====================== TEXT BEGINS =====================
   BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON


                           UC-205

STUART ANTHONY WAGNER,       )
                             ) OPENING BRIEF OF
           Complainant,      ) US WEST COMMUNICATIONS, INC.
                             )
     v.                      )
                             )
US WEST COMMUNICATIONS, INC. )
                             )
                             )
_____________________________)


                        I. INTRODUCTION
                        ---------------

     This proceeding is to determine whether U S West Communications,
Inc. (hereinafter "USWC") may charge its tariffed business rates for
telephone service that complainant Stuart Anthony Wagner uses solely
to provide bulletin board (hereinafter "BBS") services. USWC
respectfully requests this commission to determine that (1) q%Mr.
Wagner's BBS service is "not obviously confined to domestic use" of
USWC's network as that phrase is set forth in the company's tariff,
and (2) USWC may bill Mr. Wagner at its business rates for telephone
lines used in connection with his BBS services.

                         II. SUMMARY OF PROCEEDINGS
                         --------------------------


A.  ELECTRONIC BULLETIN BOARDS DEFINED.
    ----------------------------------

     Electronic BBSs are a network of personal computers that carry
typed information via the public switched telephone network. Users
access BBSs to transmit and receive messages on topics ranging from
restaurant reviews to adult entertainment. Systems are linked through
large networks such as FidoNet that permit communication among users
all over the World. Mr. Wagner testified that "about three thousand
systems are tied into mine alone, the FidoNet, which is a very small
network and that's just in the U.S. I think, without exception, BBS is
tied into every country in the World."

     Mr. Wagner is a system operator for a BBS entitled "First Choice
Communications." Its stated purpose is to provide information that
helps subscribers "with understanding communications using modems and
BBS systems." In fact, users who access Mr. Wagner's system may
research, communicate and interact within 530 messages areas or
"conferences". These conferences cover a wide range of topics; for
example, "fight bell" links individuals wishing to discuss the bell
system and Saudi Net coordinated communication of the Persian Gulf
War. Mr. Wagner collects, stores and disseminates this information on
three "IBM CLONE" personal computers that he maintains at his Portland
residence.


B.    HISTORY OF PROCEEDINGS.
      ----------------------

     USWC currently charges Mr. Wagner its tariffed business rates for
the three telephone lines used to maintain his BBS. On October 21,
1991 Wagner filed his complaint with the Oregon Public Utility
Commission (PUC), appealing USWC's rate decision. Mr. Wagner contends
that because he accepts no money for access to First Choice
Communications, USWC must bill his three BBS lines at tariffed
"residence" rates. The PUC set hearing and took testimony on Mr.
Wagner's complaint on December 7, 1991.


                    III.   ARGUMENTS
                           ---------

A.   USWC'S TARIFFS REQUIRE THAT BBS OPERATORS BE CHARGED
     ----------------------------------------------------
     BUSINESS RATES.
     --------------

     USWC is compelled under its tariff to bill Mr. Wagner's three
First Choice Communications lines at business rates. Oregon Tariff
Rule and Regulation 12 (a) provides

        The applicability of business and residence is
        governed by the actual or obvious use made of the
        service. The use which is to be made of the service
        will be ascertained from the applicant at the time
        of application for the service.

        (1) Business rates apply at the following locations.

                        *  *  *

            (d) At locations where the customer has no
                regular business telephone service, and the
                use of the service by himself, members of
                his household, or his guests is for the
                purpose of conducting a business, trade, or
                profession, or whose use of the service is
                obviously not confined to domestic use.

            (e) In general, at any place where the
                substantial use of the service is
                occupational rather than domestic.

        (2) Residence rates apply in locations where
            customers reside and substantial use of the
            service is domestic and not for the purpose of
            conducting business.

        (3) If it is found that a customer is using
            residence service for business purposes, the
            company will require the customer to take
            business service, except in cases where the
            customer use of the service is primarily for
            social or domestic purposes. Customers moved
            from residential to business service will be
            notified by the company of their right of
            appeal with the Public Utility Commission of
            Oregon.


     This case is one of first impression in Oregon.
USWC's witness, Mr. Jeff Pennington, testified on how USWC
determines whether a use is domestic for billing purposes.


        What is anticipated by the company in the term
        domestic use is that the use be confined to the
        subscriber, his immediate family and members of
        his household. In other words, a domestic setting.


     This interpretation comports clearly with the ordinary dictionary
definition of the term "domestic":  "belonging to the family, house or
household." WEBSTER'S ILLUSTRATED CONTEMPORARY DICTIONARY  211
(Encyclopedia Edition, 1984)

     In contrast, Mr. Wagner's testimony clarifies that his BBS
services are not domestic in character. First, Mr. Wagner has
announced the availability of First Choice Communications to the
general community of users through USWC's network. He wants to "tell
people I have a BBS up and running and people start calling over a
period of time.  It can get to be quite voluminous." Mr. Wagner's
active solicitation is clearly more akin to business rather than
domestic use.

     Second, Mr. Wagner does not read all of the mail that passes
through his BBS; in fact, he has testified that it would be impossible
to do so. Mr. Wagner admits further that he has no personal interest
in all of the messages he carries and transmits, and that he has "no
doubt" that some users use the system as a marketing tool. This lack
of awareness of the information carried on his telephone lines
mitigates against his claim that his use is purely domestic.

     Finally, Shareware, or commercial software that the creator or
programmer wishes to advertise for anyone who wishes to pay, is
available on most BBSs. Carrying products that people may purchase is
much more similar to business than domestic use. Whether or not users
actually purchase Shareware appears irrelevant; USWC is not required
to charge business rates only when product offerings are successful.

     In sum, Mr. Wagner provides a service that he advertises as
openly available; he receives and transmits voluminous calls and
messages in which he takes no personal interest and which would be
impossible for him to read; he carries programmers who advertise
Shareware; and he admits there is no effective way to police whether
"millions of users" are offering services for money. USWC can only
conclude that Mr. Wagner's network use is not "obviously domestic,"
and must charge its business rates for Mr. Wagner's BBS lines.

     Mr. Wagner states his case for residence rates by arguing that
he does not profit by or charge users for his services. That may be
true, but one can think of any number of entities properly charged
business rates, such as United Way, who can make that claim.

     It is the nature of Mr. Wagner's operation as a service
advertised and provided to others, involving information in which he
takes no personal interest, transmitted for others' benefit, that
takes his activity out of any rational definition of domestic use.


B.  MR. WAGNER'S POSITION UNDERCUTS THE PUC'S OBLIGATION TO
    -------------------------------------------------------
    SET RATES BASED PARTIALLY ON NETWORK USE.
    ----------------------------------------

    Oregon telephone rates are classified as either
business or residence pursuant to ORS 759.210(1):


        The commission shall provide for a comprehensive
        classification of service for each
        telecommunication utility and such classification
        may take into account the quantity of use, the time
        when used, the purpose for which used, the
        existence of price competition or a service
        alternative, the service being provided, the
        conditions of service, and any other reasonable
        consideration.


     In view of this directive, residence rates are set with ordinary
residential consumers in mind. While this use admittedly varies from
household to household, (e.g., a household with two teenagers can be
expected to make greater use of the network than one of a two career
couple that is rarely home), residential pricing generally reflects a
use that is substantially less intense than that of a business. The
voluminous amount of information Mr. Wagner testified is carried
through the network both by callers dialing into his BBS and by
callers leaving information to be retrieved by others is clearly not
contemplated. Residence rates are therefore an improper vehicle for
recovering costs associated with Mr. Wagner's use of USWC's network.


C.   BILLING MR. WAGNER'S BBS LINES AT BUSINESS RATES
     ------------------------------------------------
     PROMOTES THE OREGON LEGISLATURE'S GOAL OF UNIVERSAL
     ---------------------------------------------------
     TELEPHONE SERVICE.
     -----------------


     The Oregon Legislature's goal of universal telephone
service is furthered by USWC's decision to charge Mr.
Wagner business rates. ORS 759.015 provides:


        The Legislative Assembly finds and declares that it
        is the goal of the state of Oregon to secure and
        maintain high-quality universal telecommunications
        service at just and reasonable rates for all
        classes of customers and to encourage innovation
        within the industry by a balanced program of
        regulation and competition. The commission shall
        administer the statutes with respect to
        telecommunications rates and services in accordance
        with this policy.


     To promote the Legislature's goal, basic residence service is
billed at artificially low levels and subsidized by other services. As
Mr. Pennington testified, that is so as many domestic users as
possible can participate in telecommunications.

     USWC cannot provide unprofitable service to everyone however.
Thus, the definition of the "domestic use" that is entitled to
residential rates is properly construed as a somewhat limited
exception to USWC's general rate structure. There is no evidence that
the Legislature intended that BBS service providers should have their
hobbies subsidized by other ratepayers. By charging Mr. Wagner
business rates, moreover, USWC enhances its ability to provide
services to true residential users regardless of income level.



                 IV.   CONCLUSION
                       ----------

    Oregon law mandates providing universal access for telephone
customers, with some correlation between the amount of expected use
and the prices to be charged.  Residential rates are set with the
ordinary household in mind, and cover the expected domestic use of
that household. These rates are not set to cover incoming transmission
of information and outgoing transmission of information that is not
for the customer's own benefit. Mr. Wagner's service is basically a
"pass through" that allows considerable network use at subsidized
rates. Under these circumstances, Mr. Wagner's position that he is
entitled to residence rates is inconsistent with Oregon law and
policy.  This commission should order that Mr. Wagner's BBS services
are not a domestic use and that Mr. Wagner must pay USWC's business
rates as appropriate under its tariff.


Dated this 13th day of January, 1992
           ----        -------




                            ------------------------
                            Steven Holmes OF Attorneys
                            for US West Communications Inc.
================ TEXT ENDS ================================

     A full copy of US West's opening brief may be obtained from the
Oregon PUC by calling the OPUC at 503-378-6678.  Ask for Judith Legg
and tell her that you wish to have a copy of the opening brief from US
West in docket #UC-205.  There will be a minimal charge for mailing
the document.  Check before you make your request. Written comments
may be submitted to the hearing examiner in the Wagner case by Oregon
residents who have something relevant and in evidence to submit.
SysOps whose phone rates might be impacted if US West's arguments
prevail are prime candidates to submit comments. Take care to follow
PUC procedures to the letter in filing comments.  Contact the Oregon
PUC at the number above for details on same.

            Walter Scott
--
"Lightfinger" Rayek's Friendly Casino: 206/528-0948, Seattle, Washington.

------------------------------

End of Computer Underground Digest #4.05
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