NARUC Task Force Offers Intercarrier Compensation Proposal
A NARUC task force tentatively proposed an intercarrier compensation [ICC] compromise that includes features of several industry plans pending before the FCC. NARUC’s Intercarrier Compensation Task Force, chaired by Ia. Utilities Board Comr. Elliott Smith, told FCC staff in a conference call last week that the plan sought unified rates, reformed universal service fund collection and distribution, compatibility with existing law and “a proper balance between FCC and state roles.” FCC staff members on several occasions have said they were watching with interest the NARUC task force’s efforts to review industry ICC plans in order to devise a proposal of its own.
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In an ex parte filing describing the Dec. 22 teleconference, the NARUC task force said their “straw document” was “very much a work in progress designed to stimulate further discussions.” The group told the FCC the plan was being “socialized” among interested parties and “it will likely be modified, possibly substantially, as a result of further discussions before being taken to the NARUC full Telecommunications Committee, hopefully this February.” NARUC commissioners and staff participated in the conference call meeting.
The proposal would apply only to states that chose to opt into it. Among its features: (1) Unified compensation for origination and termination “for each ILEC” based on forward-looking costs. Carriers could negotiate any rate, although the default termination charge would be $.002 per min. CLECs could charge no more than an ILEC charged for termination “without a separate cost showing.” The negotiated compensation agreements would be subject to approval by state regulators under a procedure similar to that outlined in Sec. 252 of the Telecom Act for interconnection agreements. An optional additional termination charge of $.01 per min. for rural high cost exchanges would be “an offset to claims on the Universal Service Fund.” Within 5 years, all charges for origination/termination would be converted to “port charges.” The offsets for lost universal service funding as well as the proposal for port charges reflect features of other plans.
(2) The NARUC proposal adopts, “as a starting point for discussions,” the Intercarrier Compensation Forum’s proposal for handling transport and tandem transit. (3) A Rural Access Charge Transition Fund to offset reductions in access charges for rural companies in the first 3 years of the plan “as long as that company’s earnings are not unreasonable.”
(4) On universal service, the plan proposes adopting a unit charge based on “connections, bandwidth, and possibly telephone numbers” to collect funds. To distribute universal service money, the plan proposes a block grant that still would be collected and distributed by the Universal Service Administrative Co. (USAC). State commissions that participated in the proposal would be “allowed to determine the distribution of funds” within their states subject to FCC guidelines. If states didn’t opt in, the FCC would act. (5) “A prominent feature of the proposal is for the FCC to consult with the Federal-State Joint Board prior to adopting a final comprehensive [ICC] program and also after the plan’s adoption on implementation issues.”