Go Bill-and-Keep for Intercarrier Comp Reform, VON, Vonage Urge Commission
The FCC can reach its goal of an Internet protocol-based telecom network fastest and easiest by adopting a “bill-and-keep” approach to intercarrier compensation reform for VoIP, said Vonage and the Voice on the Net Coalition in comments. Bill-and-keep is an “economically efficient, forward-looking solution that will send appropriate price signals to consumers and the industry,” Vonage said in its comments, filed to dockets 10-90, 09-51, 07-135, 05-337, 01-92, 96-45 and 03-109. VON said “the identical nature of all IP traffic, and the relative burden such traffic imposes on the carrier networks, demands an intercarrier compensation regime that treats all traffic equally.”
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The Washington Utilities and Transportation and at least 12 RLECs agreed VoIP ought to be treated equally -- by having VoIP traffic subject to the same intercarrier comp rules that govern traditional, switched calls. The 12 RLECs -- Big Bend Telephone, Brantley Telephone, Hill Country Telephone Cooperative, Horry Telephone Cooperative, Industry Telephone, Mid-Plains Rural Telephone Cooperative, Pembroke Telephone, Pineland Telephone, Riviera Telephone, Sandhill Telephone Cooperative, Waverly Hall Telephone and Wilkes Telecommunications -- said VoIP is “functionally equivalent” to other voice services, that state commissions in Maine and Vermont have already determined that VoIP is a telecom service, that VoIP traffic can’t “be identified for billing purposes” and that “developing a separate rate for VoIP traffic would establish yet another opportunity for rate arbitrage.”
"Given the current vacuum caused by the absence of an FCC decision on the proper intercarrier compensation treatment for VoIP traffic,” the RLECs said, “when state commissions have had to implement an intercarrier compensation mechanism for VoIP traffic in individual company arbitration proceedings, most, if not all, have ruled that VoIP traffic should be treated like any other telecommunications traffic under existing law.” Without an FCC decision, the “only alternative” for RLECs “is to pursue their own state arbitration cases or seek relief in court,” the RLECs said. “Both avenues are extremely cost prohibitive given the volumes of traffic exchanged with individual carriers.”
Free Conferencing Corp. President Dave Erickson told us the bill-and-keep model was an effort by big companies to revive their much-missed monopoly. “The most effective bill-and-keep model is a monopoly,” he said. “And bill-and-keep forces a monopoly.” It doesn’t much matter to consumers which model is used because they pay about the same. But the quality of the network will suffer because telcos will have no incentive to improve the quality of calls they carry across networks, Erickson said. “VoIP doesn’t have busy signals,” he said. “But that could overwhelm the system. Cell phone networks drop calls all the time.”
In other comments, wireless carriers, led by CTIA, agreed that comprehensive intercarrier compensation reform is needed but said addressing so-called traffic pumping is a good first step. CTIA called for some changes to the proposed rules. The agency should clarify that VoIP traffic that touches the PSTN is subject to federal jurisdiction and impose a default bill and keep regime for the traffic. “Short of that result, the Commission should apply a per-minute rate of no higher than $0.0007, making clear that no rate may be applied to wireless traffic subject to Rule 20.11 in the absence of an agreement, and that any negotiated rate that is below the Commission-prescribed rate will remain in effect notwithstanding that default rule,” CTIA said.
T-Mobile said the FCC should act as quickly as possible. “The arbitrage behavior encouraged by the current ICC regime and addressed by the interim proposals in the NPRM has become so costly and disruptive that it cannot wait for comprehensive reform,” T-Mobile said. “The record on these issues is complete.” But T-Mobile said the FCC’s proposed “revenue sharing trigger” targets arrangements that could prove difficult to uncover and the proposed tariff refiling requirements would mean compensation rates that are still too high. “A better solution would be to adopt the traffic imbalance ratio of 3:1 terminating to originating traffic applied to ISP-bound traffic as a trigger,” the carrier said. When the trigger is tripped, compensation should be limited to $0.0007 per minute of use.
Sprint Nextel urged the FCC to act “expeditiously” and proposed the same changes to the rules suggested by T-Mobile. “For many years, these arbitrage activities have generated massive billing disputes and consumed inordinate resources that could have been put to far better and more productive uses,” Sprint said.
MetroPCS also encouraged the FCC to take action. “Traffic pumping is a growing problem that plagues the industry and generates wasteful, unproductive increases in the intercarrier compensation costs incurred by carriers, which in turn unnecessarily raises the cost of service to all customers,” the company said.
Beehive Telephone Companies urged the FCC to tighten definitions of “access revenue sharing” and to define clearly a “sham arrangement.” Beehive said it has been victimized by ambiguities in the language and is engaged in a multimillion-dollar lawsuit with Sprint because Sprint accused Beehive of traffic pumping. “Beehive is embroiled in one of the 25 collection suits that are now in federal courts -- or in the courts and the Commission under the doctrine of primary jurisdiction -- as a result of the strategic decision of the [interexchange carriers] to defend federal court collection suits rather than pursuing their access stimulation claims before the Commission,” Beehive said.