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AT&T Seeks IP-Telephony Rate Exemption

AT&T Corp. is seeking a federal ruling that Internet-based phone calls
are exempt from per-minute access charges that apply to traditional
long-distance phone calls.

AT&T filed for an exemption Oct.18 with the Federal Communications
Commission -- a move that will likely trigger a lobbying war with the Baby Bell
phone companies, which rely on billions of dollars in long-distance access
charges to subsidize rural customers.

With the filing, AT&T is effectively asking the FCC to treat
phone-to-phone calls that travel the Internet in the same fashion as it treats
Internet-service providers such as America Online Inc. AOL does not pay access
charges for connecting dial-up subscribers to the Internet.

'Any other rule would effectively sanction taxes on the Internet,' AT&T
said in the 33-page filing.

AT&T said it turned to the FCC because local phone companies had moved to
slap access charges on Internet voice traffic.

Some cable operators -- Comcast Corp., in particular -- are moving forward
with IP telephony. An access-charge exemption could give the cable firm a
regulatory edge over firms that collect access fees from customers.

Many policy analysts have said the ISP-access-charge exemption fueled the
Internet's rapid growth because ISPs could offer flat-rate monthly plans to
subscribers who could remain online for hours without facing per-minute usage

Whether IP telephony will enjoy the same explosive growth is unclear. In the
filing, AT&T said IP-telephony providers currently represent between 1
percent and 5 percent of all long-distance calling.