DEBATE GROWS ON CLEC ACCESS CHARGES

AT&T plan was endorsed by NewSouth, Greenville, S.C.-based CLEC that told Commission that lack of certainty over controversial issue was hurting CLECs. NewSouth Vp Jake Jennings said in March 15 ex parte filing that AT&T plan would offer that certainty and also would place all carriers on equal footing in competing for end user customers. “CLECs need to know on what basis they will receive compensation for switched access services,” he wrote. Present situation makes it hard for CLECs to raise capital because “IXCs [interexchange companies] and CLECs continue to dispute switched access charges and payments are made in part or not at all.”

Endorsement also came from International Communications Assn. (ICA), composed of large corporate telecom users. ICA said late Mon. that corporate world was tired of “bloated interstate access charges” that raised rates long distance companies charged users. “FCC inaction has enabled a small number of [CLECs] to cross- subsidize their local service offerings with access rates that are priced well above those of [ILECs],” ICA said. Organization said it would like to see all CLEC rates immediately lowered to no less than ILEC rates but AT&T phase-in offered “reasonable compromise.”

Both AT&T and ALTS plans would use mandatory detariffing as weapon to force carriers to reduce rates. Most CLECs find it easier to operate under tariff system because once they file tariffs, rates are set across board and IXCs must pay whatever rate is in those tariffs. Without tariffs, they must negotiate contracts with CLECs, which many believe would drive down rates. Without tariffs, CLECs have nothing to “hide behind,” AT&T Regulatory Affairs Dir. Patrick Merrick said.

Under AT&T plan, FCC would order mandatory detariffing for any CLEC whose rates exceeded those of ILEC serving same market. If CLEC’s access rates were below prevailing ILEC rate, FCC would let it operate under permissive detariffing, meaning it wouldn’t have to detariff unless it wanted to do so. CLECs could lower their rates over one-year period, starting at 1.2 cents per min. and dropping quarterly, and still qualify for permissive detariffing.

ALTS plan, proposed Jan. 11 in comments on issue (CD Jan 12 p8), calls for 2.5 cents this year and drop of 0.2 cents in each of next 3 years. After that, FCC probably would replace plan with broader intercarrier compensation scheme that it’s working on now, ALTS Gen. Counsel Jonathan Askin said. CLEC access charge proceeding is seen as interim plan because FCC expects eventually to replace separate carrier compensation practices, including access charges, reciprocal compensation and others, with one over- arching process.

Some CLECs charge long distance companies upward of 7 cents per min., compared with ILECs in 0.6-0.7 cent range, leading long distance companies to refuse payment and become embroiled in lawsuits. It’s “absurd” for CLECs to use IXC access as “revenue stream,” AT&T’s Merrick said. CLECs believe IXCs “have no choice” because they have to complete their customers’ phone calls to CLEC customers, he said. At CompTel conference in Feb., FCC Common Carrier Bureau Chief Dorothy Attwood encouraged industry groups to propose solutions to problem.

Askin said ALTS proposal, called Guaranteed Reduced Exchange Access Tariffs (GREAT), was based on “a lot of soul-searching” within CLEC community, seeking compromise between “dramatic rate shock” and need to eliminate controversy so CLECs could ease concerns of financial community. “The entire CLEC community wants certainty” and is willing to reduce rates to gain it, he said. ALTS plan is “bare minimum” that CLECs can live with while AT&T plan “goes too far,” Askin said.

FCC is required to act on issue by midsummer to respond to request for ruling by U.S. Dist. Court, Alexandria, Va. Court declined to act on access charge dispute in Va., recommending that parties seek guidance from FCC.