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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 Issues of CuD can be found in the Usenet news group, on CompuServe in DL0 and DL4 of the IBMBBS SIG, DL1 of LAWSIG, and DL0 and DL12 of TELECOM, on Genie, on the PC-EXEC BBS at (414) 789-4210, and by anonymous ftp from (,, and To use the U. of Chicago email server, send mail with the subject "help" (without the quotes) to NOTE: THE WIDENER SITE IS TEMPORARILY RE-ORGANIZING AND IS CURRENTLY DIFFICULT TO ACCESS. FTP-ERS SHOULD USE THE ALTERNATE FTP SITES UNTIL FURTHER NOTICE. COMPUTER UNDERGROUND DIGEST is an open forum dedicated to sharing information among computerists and to the presentation and debate of diverse views. CuD material may be reprinted as long as the source is cited. Some authors do copyright their material, and they should be contacted for reprint permission. It is assumed that non-personal mail to the moderators may be reprinted unless otherwise specified. Readers are encouraged to submit reasoned articles relating to the Computer Underground. Articles are preferred to short responses. Please avoid quoting previous posts unless absolutely necessary. DISCLAIMER: The views represented herein do not necessarily represent the views of the moderators. Digest contributors assume all responsibility for ensuring that articles submitted do not violate copyright protections. ---------------------------------------------------------------------- Date: 29 Jan 92 19:13:44 CST From: Telecom Digest Reprint ( 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) qMr. 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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