The Jeff Pulver Blog: FCC Releases Order on Wireless-to-Wireline Termination Tariffs:

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February 25, 2005

FCC Releases Order on Wireless-to-Wireline Termination Tariffs:

The FCC has released an Order denying a petition by T-Mobile asking the FCC to reaffirm "that wireless termination tariffs are not a proper mechanism for establishing reciprocal compensation arrangements for the transport and termination of traffic". In so ruling, however, the FCC amended its rules on a prospective basis to prohibit the use of tariffs to impose intercarrier compensation obligations with respect to non-access CMRS traffic.

Normally, I wouldn't flag such a ruling to the VoIP community, but I think there might be more here than meets the eye. Frankly, I'm not sure exactly what insights the VoIP providers might gather from this decision which is not really on point with regard to IP-PSTN interconnection rights/obligations, but it might be worth a read and I would welcome your insights. Be forewarned, my limited analysis below gets a little convoluted, but no more convoluted than the existed, kluged world of intercarrier compensation into which some are trying to drag the VoIP providers.

While the decision is not specifically germane to those of us offering connected IP-based communications services, it seems that the FCC has some preference for negotiated rates between providers, rather than allowing carriers to rely on tariffed rates. By analogy, it would seem that the FCC would prefer that LECs negotiate interconnection rates with VoIP providers rather than simply rely on the existing, muddled, incomprehensible intercarrier compensation tariff structure, particularly the legacy access charge regime, the rules for which the VoIP industry had no involvement. The access charge rules were first established to ensure that long distance providers cover a fair share of the joint and common costs of the local loop and were preserved as legacy rules after passage of the Telecom Act in '96, but were not intended to apply to new types of intercarrier compensation arrangements that did not exist prior to passage of the Telecom Act. (For those of you keeping score, this was the reason the DC Circuit rejected the FCC rules for compensation for ISP-bound traffic -- the DC Circuit said the FCC could not rely on 251(g) of the Telecom Act, which was only intend to apply to the access rates that LECs could charge IXCs because of the existing compensation arrangements that existed prior to passage of the Telecom Act. The interconnection between two LECs for sending traffic into the Internet cloud were not subject to the access charge regime.)

In any event, the Order indicates that LECs cannot impose tariffed rates for "non-access" traffic, begging the question, "What is and is not 'access' traffic in an IP-enabled world where distance/geography is irrelevant and a local call should be treated no differently from a long distance call. The Order indicates that there was no real compensation scheme existing between wireless and wireline carriers before or after the Telecom Act, and therefore the LEC-IXC access charge regime is an inappropriate compensation model. I think there is an important analogy that IP-based communications providers could rely on, in that there also was no existing intercarrier compensation scheme for IP-to-PSTN traffic before or after the Telecom Act. Arguably, LECs should not be permitted to rely on the access charge regime to impose access charges on providers for an interconnection structure that did not exist before passage of the Telecom Act.

Blah, blah, blah. We didn't ask to play in this regulatory quagmire. Moore's Law dragged us, and the rest of the IP-based communications community into this swamp. Hopefully we have a clearer way out...is Swamp Thing still around to save us?

Posted by jeff on February 25, 2005 08:06 AM | Permalink

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