FCC Defends Intrastate VoIP Originating Access Charge Regime
With the submission of its response to the Windstream brief Wednesday, the FCC has spent over 90,000 words defending the 2011 USF/intercarrier compensation order in challenges from across the industry. This latest brief filed in the 10th U.S. Circuit Court of Appeals (http://bit.ly/11RouPu) defended the creation of a transitional originating access charge regime for intrastate long-distance VoIP calls.
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The commission spent much of the brief explaining the history of intercarrier compensation (ICC), and discussing its reasoning for transitioning the industry -- including interconnected VoIP providers -- to bill-and-keep. Originating and terminating access charges are a vestige of the breakup of AT&T and the introduction of competition into the long-distance marketplace, the FCC said in its brief. When it decided to transition the industry away from that “flawed” and “outdated” framework to a bill-and-keep methodology better suited for the modern telecom world, the commission needed to confront the question of whether interconnected VoIP is subject to ICC rules, it said. The commission “established a prospective rule that LECs may tariff both terminating and originating access charges for long-distance VoIP calls at the interstate terminating access rate for traditional telephone calls,” it said.
Responding to a Windstream petition for reconsideration, the commission gave Windstream and other LECs a two-year transition window, letting them collect the higher intrastate rates for originating access charges for VoIP intrastate long-distance calls. But by June 30, 2014, those rates must transition to the lower VoIP termination rates. Otherwise, “the evidence showed that VoIP customers could end up paying higher rates to fund the intrastate rates on originating calls, which would make the new technology less attractive,” the FCC said. Two years would give carriers time to “adjust” to the new framework, while ensuring the bill-and-keep transition was not unduly delayed, it said.
Despite being given the opportunity to collect high intrastate originating access charges for two years, “Windstream accuses the agency of imposing an unexplained ‘flash cut’ on intrastate VoIP access charges,” the FCC said. But that’s not true, the brief maintained: “The agency reasonably explained all of its VoIP policy judgments.” There has been “little or no cut at all, let alone a ‘flash cut.'” The FCC made clear that it addressed both originating and terminating charges, it said, Windstream arguments to the contrary notwithstanding. The language in the USF/ICC order “plainly applies to both originating and terminating traffic.”
Prior to the order, LECs had “no recognized entitlement” to access charges for terminating VoIP calls, the FCC said. The new recovery mechanism “should bring LECs, as a whole, substantially more revenue and lower expenses in connection with terminating VoIP calls,” it said. A Windstream spokesman declined to comment. Oral argument is set for Nov. 19 in Denver.