To the Commission:

The Washington Association of Internet Service Providers represents some 35
Internet Service Providers, and their combined 500,000 customers in the
state of Washington.  We appreciate the opportunity to respond to your
inquiry on the cost of Universal Service and Intrastate Carrier Access
Charges.

We reviewed the Staff Report, and agree with their conclusion that Internet
Service Providers (ISPs) because they are "enhanced telecommunications
services", fall outside the scope of the universal service fund and access
charges.  This is consistent with the Federal Communications Commission
position, as well as the WAISP.  Internet Service Providers who provide
telephone or dial-up and dedicated Internet access to consumers and
customers via the existing switched telephone network are actually
"value-added" components of that network.  We provide information over that
network, but pay the owner of that network (or the end user does), just as
if it were being used for a voice telephone call.

When the network is used in that manner, taxes, fees and charges are paid
by the customer, (either the ISP or the end user), through the incumbent
telephone service provider.  It can and should be viewed as a simple
telephone call from one local computer to another local computer.  ISPs
who are providing access to the Internet via their own infrastructure are
treated as CLECs and are subject to such provisions as other CLECs would
be.  The Staff Report reflects this as well.

However, since the Staff Report was written, changes in the Industry have
warranted additional study in the area of access charges.  A case in point
is that Bell Atlantic in the Philadelphia area has stopped paying
termination charges to CLECs as part of their interconnect agreements when
such calls are made to Internet Service Providers, and an action has been
filed with the Pennsylvania PUC.  Bell Atlantic's legal argument is that
calls to ISPs are not really local calls -- they are intended to traverse
the global Internet. We and the ISP community dispute this, as the Industry
is based on customers' ability to

WUTC
Docket UT-970325
Feb. 13, 1998
2


place local calls to computers which essentially communicate with the
Internet for them.  Bell Atlantic however states in their PUC filing that
"The central impediment to making a profit on ISP traffic is the Federal
Communication Commission's decision exempting ISPs from the access charge".


We would urge the WUTC in its final rule making to ensure that ISPs, when
acting in their role as enhanced telecommunications providers, remain
exempt from access charges, as such charges are paid by the end customer
through the existing telephone provider.  Further, we would urge that in
the access charge rule making procedure that the WUTC insure that CLECs
remain competitive and continue to offer services to ISPs by strictly
enforcing termination charges in Interconnect agreements -- regardless of
who the call is placed to.


Cordially,
Gary Robert Gardner
Executive Director