About litigation involving BBSs in USA. On January 29th and 31st, a hearing will be held before an administrative law judge concerning the case of the Variety & Spice BBS (Gross Point, MI) and Michigan Bell. In March, Michigan Bell informed the sysop that they would begin charging him business rates for his phone lines because they determined that his charging for access does not qualify him for residencial rates. Several cases of this nature have, or are currently being faught around the country. These files are being circulated to inform those who use or run BBS's of pending legislation in Michigan and Indiana. For more information, or if you would like to testify before the MPSC on the above date, please contact one of the following sources. Jerry Cross (voice)313-736-4544 (bbs) 313-736-3920 Variety & Spice BBS 313-885-8377 or check out one of the many Michigan BBS's that carry the Michigan ECHO message system. Please send comments or questions to G.Cross (Genie) JERRYCROSS (DELPHI) 75046,467 (CompuServe) Thanks for your support! *** Now read this *** GTE TAKES ON INDIANA SYSOPS (April 5) Unilateral imposition of business rates on Bulletin Board Systems continues to spread. BBS operators in Indiana complain that GTE is forcing them to accept extra-cost business rates rather than the residential rates they have been paying. Derry Nelson, sysop of the 1149 BBS in Elkhart, Ind., says that the changes were a surprise. The worst part of the surprise seems to be the large jump in monthly rates. A typical BBS would find its monthly bill increased by almost 200 percent. "To the best of my knowledge the BBS Community was not aware of the changes GTE requested in their [new] tariff," Nelson said. "I know that I personally wasn't aware of anything until I received a letter from GTE stating that my rate classification was being changed from Residential to Business. I honestly believe that this [tariff] was `slipped' through." The Indiana Utility Regulatory Commission (IURC) told Nelson and other sysops that a tariff approving business rates for home computer lines was approved in January. The consensus among ELkhart BBS operators seems to be that the tariff should have considered in open and publicized hearings. The new tariff appears to give GTE wide-ranging control over its customers. As an example, the company can limit the length of calls "when in [GTE's] judgement such action is necessary." GTE claims authority to change a BBS to business rates because the service is provided "for use [of] the general public." Additional information is available from the Utility Consumer Counselor at 317/232-2494. The 1149 BBS can be reached at 219/293-1149. --James Moran ---------- FROM: Mike Marotta Area # 9 ( Michigan ) TO: Bbs Users MSG # 130, Apr-7-90 0:31am SUBJECT: Why Business Rates These excerpts are from MPSC documents. It is established in regulatory commission administrative law that the PROVIDER files a tariff. For instance, it is a principle of regulatory law that a tariff cannot be effective prior to its filing date. A tariff that allowed this would "jump out" at a regulator who read it. Generally, however, the regulators ACCEPT the filing of the carrier and leave it to competing carriers or clients to file a complaint. ----------------------------------------------------------------- Michigan Bell Telephone Company Tariff MPSC No. 7 was issued on November 21, 1966. Its age alone speaks volumes. "Original Sheet 11. GENERAL REGULATIONS CLASSIFICATION AND USE OF TELEPHONE SERVICES A. APPLICATION IS BUSINESS AND RESIDENCE RATES (Formerly Sheet 15) 1. The determination as to whether telephone service is Business or Residence is based on the character of the Use to be made of the service. Service is classified as business service where the use is primarily or substantially of a business, professional, institutional, or otherwise occupational nature. Where the business use, if any, is incidental and where the major use is of a social or domestic nature, service is classified as residence service if installed in a residence. "2. Business rates apply at the following locations, among others: a. In offices, stores and factories, and in quarters occupied by clubs, lodges, fraternal societies, schools, colleges, libraries, hospitals and other business establishments. b. In residence locations where the place of residence is in the immediate proximity to a place of business and it is evident that the telephone in the residence is or will be used for business purposes; and in the residence locations where an extension is located at a place where business rates would apply. c. In the residence of a practicing physician, dentist, veterinary, surgeon or other medical practioner who has no service at business rates at another location. d. In any residence location where there is substantial business use of the service and the customer has no service elsewhere at business rates. "B.1.a.(2). A customer engaged in furnishing services of a secretarial nature may not use Telephone Company facilities to receive messages for one party to be forwarded to another party, unless such forwarding is of a temporary or occasional nature." --- FROM: Mike Marotta Area # 9 ( Michigan ) TO: All Bbs users MSG # 131, Apr-7-90 0:32am SUBJECT: more on rates - 2 As a result of the "Variety and Spice BBS" incident of March 1990, the MPSC issued a statement. Excepts follow: "FORM LETTER FOR COMPUTER BULLETIN BOARDS "If bulletin boards or access to bulletin boards is provided to calling parties at no charge other than that which may be associated with the telephone call, and are not provided in conjunction with a business, a profession, an institution or other occupation, then it would appear that the service should not be classified as a business. If, however, there is a charge associated with any level of access to the bulletin board, whether the charge is rendered to cover costs or produce a profit, then the service would be considered a business or classification as such. This would also apply if any of the previous conditions mentioned were not met." FROM: Mike Marotta Area # 9 ( Michigan ) TO: All Users MSG # 134, Apr-7-90 0:25am SUBJECT: Michigan Bell and You 04/06/1990 This statement was specially prepared by Michigan Bell to explain to the bulletin board user community their position on the question of business rates. The statement was given to me at my request by Michigan Bell's district manager for state government. -- Mike Marotta. "Telephone Service Classifications "Recently the question has arisen whether Michigan Bell is attempting to charge commercial rates to all computer bulletin boards in the state. Michigan Bell has not instituted a "program" to impose a specific class of service on any group of customers, i.e., computer bulletin boards. In fact, the decision on which class of service is required for computer bulletin boards is no different than it is for any other service. In making the decision, Michigan Bell is required to comply with tariffs approved by the Michigan Public Service Commission, which cover the matter of appropriate classification of telephone service. "The applicable tariffs require Michigan Bell to classify service primarily in accordance with the use that is to be made of the service. The tariffs specify the conditions under which a service is classified, for rate purposes, as business or residence service. For example, service is classified as business where the use is primarily that of a business. In the case of computer bulletin boards, for instance, is there is a charge associated with any level of access to the board, or money is solicited in conjunction with the board, that is considered conducting a business within the meaning of Michigan Bell's tariffs. The service, therefore, would be classified as business and business rates would apply. On the other hand, service that is used primarly for domestic purposes is classified as residence service. Again, using the example of computer bulletin boards, if the board is not associated with a business and no charge is assessed or solicited for access to the board, then service may be classified as residence in accordance with the application tariffs." *** And this *** STATE OF INDIANA INDIANA UTILITY REGULATORY COMMISSION IN THE MATTER OF THE COMPLAINT OF ) TEN INDIVIDUALS AGAINST GTE NORTH ) CAUSE NO. 39005 INCORPORATED PERTINENT TO CERTAIN ) CHARGES FOR TELEPHONE SERVICE ) RENDERED BY GTE NORTH INCORPORATED ) BY THE COMMISSION: __________________ James R. Monk, Chairman Mark W. Cooper, Chief Administrative Law Judge On June4, 1990, Randy Wilson, Derald A. Nelson, Clamies J. Lambright, David A. Reynolds, Thomas Battler, Don Billey, Jeff Jacobs, Jean Ludwig, George Himebaugh, Jr., and Delmar Mineard, Jr. (Complainants") filed a complaint with the Commission pursuant to IC 8-1-2-54 against GTE North Incorporated ("Respondent"). By their complaint, the Complainants state that certain of the provisions of the Respondent's tariffs on file with this Commission are unjustly discriminatory and unreasonable to the Complainants" detriment. Pursuant to notice duly published as required by law, a Prehearing Conference was held in this Cause on July 27, 1990 at 1:30 P.M., EST, in Room 908, State Office Building, Indianapolis, Indiana. At the Prehearing Conference, the parties informally agreed as to procedural and scheduling matters to be operative in this Cause. However, counsel for the Respondent indicated that it would be subsequently submitting a motion to dismiss herein and the Commission withheld the issuance of the Prehearing Conference Order pending the submission and ruling upon Respondent's Motion to Dismiss. On August 10, 1990, the Respondent filed its Answer and Motion to Dismiss, which filing appears in the following words and figures, to-wit: (H.I.) Based upon the applicable law and the filings of the parties, the Commission now finds as follows: 1. Commission Jurisdiction. The Respondent is a "public utility" within the meaning of the Public Service Commission Act, as amended. IC 8-1-2-54 provides the complaints may be filed against public utilities with the Commission pertinent to the practices and acts of those utilities. The complaint initiating this Cause was filed under the provisions of IC 8-1-2-54 and appears to satisfy the requirements thereof. The Prehearing Conference was conducted pursuant to notice duly published as required by law. IC 8-1-2 et seq. and the Commission's Rules and Regulations of Practice provide the Commission with the authority to appropriatley adjudicate and dispose of cases pending before it. Therefore, the Commission has jurisdiction over the parties and subject matter herein. 2. Commission Discussion and Findings. The Complainants allege that certain provisions of Respondent's tariffs are unjustly discriminatory and unreasonable and the Complainants have been caused harm thereby. The Complainants state that they are customers of the Respondent and are engaged in the hobby of operating a Computer Bulletin Board System ("BBS"). The Complainants allege that pursuant to these tariff provisions the Respondent is billing them at a business rate rather that a residential rate whic is inappropriate and to their detriment. The Complainants contend that the operation of a BBS is a hobby and not a business venture. The Complainants also contend that applying a business rate to them consititutes a rate change which must be subjected to public hearing prior to the application thereof. Respondent points out that the tariff complained of by the Complainants was approved by the Commission on January 31, 1990 pursuant to IC 8-1-2-42. Respondent also points out there is no dispute between the parties as to whether this is the appropriate tariff under which the Complaintant's service should be provided. Complainant citees certain language set forth at Section 6.5 of the tariff which reads, as follows: The Company shall determine if business or residence rates apply to a customer service. Respondent goes on to set forth additional language from the tariif which set forth situations under which a business reate is properly applied. Respondent concludes that BBS clearly fits the categories set forth by the tariff under which a business rate applies Respondent goes on to set forth additional language from the tariif which set forth situations under which a business reate is properly applied. Respondent concludes that BBS clearly fits the categories set forth by the tariff under which a business rate applies and the fact that Complainants allege that BBS is a hobby does not remove it from the categories as defined within the tariff. Respondent's Motion to Dismis does not clearly set forth the authority or rule under which the Motion is brought. Therefore, we must first determine the precise character of the Motion that we may know the criteria under which its propriety is to be considered. Although Respondent's filing is denominated as a "Motion to Dismiss", a review of that Motion reveals that it does not clearly fall within the parameters of the familiar request for involuntary dimissal under T.R. 41 or matters properly raised under T.R. 12 (B). It appears that Respondent's filing is most akin to a Motion for Judgement on the Pleadings as provided by T.R. 12(C) or a Motion for Summary Judgement pursuant to t.R. 56. In any event, a review of T.R. 12(C) directs that a motion brought under that rule in circumstances such as these should be treated as one for summary judgement and be disposed of as provided by T.R. 56. T.R. 56(C) sets forth the standard under which a moving party may prevail on motion for summary judgement. The Rule provides that the judgement sought shall be rendered if there is no genuine issue as to any material fact and that the moving party is entitled to a judgement as a matter of law. This standard appears to be applicable in this situation. A review of the Complaint and Respondent's filing indicates that the parties agree upn the operative facts and that there exist no genuine dispute as to any material fact. The question remaining to the Commission is no then fact sensitive but whether Respondent's tariif provisions which allows the Respondent to bill the Complainants under a business rate constitutes the improper charging of a reate without prior Commission approval and/or whether that tariff provision is unjust and discriminatory. Both of which are conclusions of law for the Commission as contemplated by T.R. 56 (C). The Complainants allege that the Respondent's application of a business rate to the Complainants constitutes a rate change for which prior Commission approval must be obtained after holding a public hearing. The cleand and unambiguous terminology of Respondent's tarriff which was approved by this Commission allows the Respondent to determine wheter a particular service is appropriatley billed under a residence rate or a business rate. Clearly the tariff approved by the Commission authorizes the appropriate rate. The Complainants have not alleged that Respondent acted in a fashion inconsistent with the tariff. Therefore, when information comes to the Respondent that leads it to believe that a particular customer's situation has changed it is authorized under the tariff to impose a rate change consistent with the terms of the tariff. The Respondent's review of circumstances and decision to impose a different rate authorized under the tariff clearly does not constitute a rate change as contemplated by IC 8-1-2-42. Therefore, considering the undisputed facts the Complainants would not be entitled to prevail on this issue. The Complainants next allege, without specifically stating the reasons therefor, that Respondents tariff in question is unreasonably discriminatory. This Commission has for many decades been charged with the duty to review utility tariffs under the mandate that utility services should not be discriminator and must serve puble interest. A review of the official files of the Commission disclosed the provisions of Respondent's tariff in question are of a standard type and kind for local exchange telephone service. Further, we note that such tariff provisons were reviewed by the Commission's Engineering Division which was properly delegated with the authority to consider the propriety of that tariff and make ultimate approval or rejection thereof. Base upon a review of Respondent's tariff, we find that the tariff provisions are not unreasonable and discriminatory either as written or by their application. Therefore, we find that the Complainants are not entitled to prevail upon this issue as a matter of law. Based on forgoing, we find that Summary Judgement should be granted in favor of the Respondent and the Complaintants request to investigate the acts, practices and rates of the Respondent and for the holding of public hearing on the matter of the imposition of a business rate to the Complainants should be DENIED. IT IS THEREFORE ORDERED BY THE INDIANA UTILITY REGULATORY COMMISSION THAT: 1. The Respondent shall be deemed to have prevailed on the matters at issue herein and that Complaintants request for an investigation into the acts, practices and rates of the Respondent and the holding of public hearing upon the Respondent's imposition of a business rate upon the Complainants shall be, and hereby DENIED. 2. This Order shall be effective on and after the date of its approval. NOV 21, 1990