Wireline Bureau’s Bill-&-Keep Analysis Issued as Part of NPRM
Bill-&-keep (B&K) should be seriously considered as a compensation method for carriers to reimburse each other, the FCC Wireline Bureau said in an analysis that was attached to the agency’s Intercarrier Compensation (ICC) rulemaking, issued Thurs. When the Commission voted to institute the rulemaking in Feb., Comr. Abernathy complained some of the commissioners refused to include the bureau analysis in the notice of proposed rulemaking (NPRM) itself. However, the report was attached to the rulemaking as an appendix, which means parties still can issue comments on it, FCC staff members said (CD Feb 11 p3).
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The analysis reviewed comments filed in an earlier ICC rulemaking proposal issued in 2001. The agency at that time sought comment on the assumption that B&K “makes sense only in certain narrow circumstances,” the bureau said. The bureau report “reevaluates” that assumption, it said. B&K is a key proposal of the inter-industry Intercarrier Compensation Forum.
Parties have proposed 2 basic compensation regimes, the bureau said: B&K and “unified calling party’s network pays (CPNP).” B&K “can be thought of as a unified compensation regime with a rate of zero,” the bureau said: “Carriers do not charge each other for the origination and termination of traffic. Rather, carriers recover all their costs from their subscribers. In contrast, under a unified CPNP regime, carriers would continue to compensate each other for the termination of traffic, but the rate charged by any particular carrier would be the same for all types of traffic.”
Among the bureau’s conclusions: (1) “Some parties argue that “there is an insufficient basis for altering the historical assumption that the calling party is responsible for the costs of the call… We are not persuaded that the principles of cost causation require retention of a CPNP regime.” (2) “Commenters opposing a bill-and-keep regime on efficiency grounds often cite the example of unwanted calls, such as telemarketing calls, to demonstrate a case where the called party receives no benefit and must cover some cost of the unwanted call. Intercarrier compensation is neither the source of unwanted calls nor the solution to the unwanted call problem… We do not see any reason why the possibility of unwanted calls should preclude us from adopting a compensation regime that is premised on the assumption that both parties may benefit from any given call.”
In answer to economic arguments, the bureau said: “Additional arguments opposing bill-and-keep on economic grounds are based on the assumption that costs depend on the number or duration of calls on the network, rather than on connectivity to the network… We believe that a CPNP approach is problematic in a competitive marketplace because it allows networks to shift costs to other networks… Second, underlying all these arguments is a fundamental presumption that most network costs are incurred on a per-minute or per-call basis… It does not appear that minutes-of-use are a significant determinant of costs given developments in telecommunications technologies.”
The bureau said a B&K approach “may be more technologically and competitively neutral than the current regimes because it moves the intercarrier compensation system away from traditional regulatory and jurisdictional classifications that are not based on actual economic cost differences. A bill-and-keep approach would free the Commission from the difficult task of making regulatory distinctions that are no longer sustainable.”
The bureau said it didn’t think “it can be reasonably argued that bill-and-keep is somehow ‘more regulatory’ than a CPNP regime.” The bureau acknowledged “the need to address the universal service consequences of a bill-and- keep regime” and said there’s concern B&K “will raise end- user charges and may affect the affordability of telecommunications services, particularly in rural and high-cost areas… We recognize that addressing these affordability concerns will require further adjustments to the Commission’s existing explicit universal service mechanisms and may require additional commitments of universal service funds.”
The underlying NPRM issued Thurs. called for comments 60 days after the proposal is published in the Federal Register with replies 30 days after that.