Ron -- The Mountain Area Information Network here in North Carolina is a 
non-profit ISP.  This is the core of our community network services. Not 
only does this function help make us sustainable, it also gives users a 
sense of ownership and stakeholding, thereby increasing their motivation 
to volunteer.  Moreover, six of the 14 counties in our demonstration 
project did not have local dial-up to the Internet until MAIN came along.

We had hoped to lease our connectivity from the N.C. Information Highway, 
but we have been banned from this infrastructure even though our partners 
(libraries, community colleges) are eligible for NCIH connectivity.  

The rub is what they call "re-selling" to average folks via dial-up to a 
modem pool.

Instead, we have built our network via commercial services (MCI and 
BellSouth) at triple the costs.  In some cases, our commercially leased 
64k line runs alongside a state-leased T-1 line with excess capacity.  
It's kind of ludicrous.  We are now working with our local 
legislators to amend the NCIH statute.  

Even though we are not using state infrastructure, a couple of local ISPs 
are making noises about a lawsuit in an attempt to discourage our 
public-sector partners.  Yet the local ISPs have no interest in serving 
the more isolated counties or in providing free or affordable access to the 
disabled and economically disadvantaged (not to mention the other 
community network services such as training, interagency collaboration, 
support for non-profits, public forums, small business incubation, etc.)

The ISP part of our operation is quite like the rural electric 
cooperative.  But the culture of "privatization" is strong, and it's not 
easy to get some folks to acknowledge alternative models.  

Where do you get your connectivity?  Any reaction from local ISPs?  

Wally Bowen

On Wed, 5 Mar 1997 [log in to unmask] wrote:

> I am the CEO of Jeffrson Public Radio (JPR) and JEFFNET, a small ISP/online 
> service which is owned and operated by JPR.  (JPR is a network of 11 
> public radio stations serving southern Oregon and northern California).  
> I actually joined this listserv some weeks ago specifically because I 
> had run into a few threads of an earlier discussion in this list which 
> dealt with IRS-related problems some non-profit ISP's were having.
> We are in the process of changing JPR's parent corporate status  (we are 
> owned by the State of Oregon and JEFFNET is a wholly-owned subsidiary of 
> a foundation related to our college).  In the course of that discussion 
> we've gotten deeply involved in the IRS issues related to JEFFNET.
> I gather from threads of previous discussion that the IRS is starting to 
> take the position that if you run a modem pool, you are running a 
> business which does not qualify for tax exemption.  JEFFET is an oddly 
> situated thing in that it is more than just an online service.  It is 
> tied into our public radio programming in various ways.  For example, the 
> only way to submit JPR public service announcements (for which we do not 
> charge obviously) is via a new JEFFNET community calendar interface.  
> Our daily political commentator does an online version of his column.  We 
> have community forums on line which are devoted to topics which we deal 
> with on air and the content is bi-directional between JPR (on air) and 
> JEFFNET.  So, it is hard to say that our radio side is nonprofit, which 
> it is, and then to decide just when the content migrated to JEFFNET 
> suddently becomes part of a "business."  JEFFNET also has significant 
> partnerships with other nonprofits and has placed these organizations 
> online.  (We are, in effect, the nonprofit, noncommecial online service 
> in our region in the same way that our radio side is the noncommercial 
> radio service for the same region.)
> That all said, I would appreciate some comments and guidance from other 
> ISP's because I am having trouble following the logic of the IRS 
> discussion as I have understand it.
> Many different enterprises are alternatively for-profit or 
> non-for-profit with no clear dividing line for any given industry.  In 
> other words, hospitals, Blue Cross, YMCA's and credit unions are, or can 
> be, non-profit tax exempted.  The AAA is a not-for-profit with whom the 
> the travel clubs of Sears, Mobil and others must complete.
> So I am having a difficult time understanding why the simple act of 
> operating a modem pool should designate an ISP as a commercial business.
> If one were being true to the theory and law of non-profit enterprise in 
> these other industries, it would seem that the test for an ISP which runs 
> a modem pool should be what you do, and how you do it, in respect of your 
> non-profit mission rather than just operating a modem pool and charging 
> for its use as part of a broader set of services you provide. 
> Has anyone else litigated this with the IRS on this basis or is everyone 
> pretty much accepting the premise that operating a modem pool is per se 
> an admission that you are in the for-profit side of this type of activity?
> JEFFNET charges fees to members for various things, including modem pool 
> access, and then uses those revenues to support the services which we give 
> away to schools and local governments.  I'm having a hard time understanding
> why that is not an acceptable non-profit model.
> Does any one have any guidance on these points?  Am I missing something?
>                                           Ron Kramer
>                                           Jefferson Public Radio/JEFFNET
>                                           Ashland OR