IP: FCC sets new Internet carrier payment policy

[David Farber <dave () farber net>]

> FCC sets new Internet carrier payment policy
>
> Janos Gereben - www.the451.com
>
>
>
> [Government revamps rate arrangements between incumbent and competitive
> local exchange carriers in US public switched telephone network.]
>
>
>
> In a long awaited decision, the Federal Communications Commission voted 3-1
> to reduce significantly carrier-to-carrier payments between incumbent local
> exchange carriers (ILEC) such as Bell Atlantic and SBC, and competitive
> local exchange carriers (CLEC) - companies acting as retail Internet service
> providers.
>
>
>
> FCC chairman Michael Powell, commissioners Susan Ness and Gloria Tristani
> voted in favor, Harold Furchtgott-Roth against the new regulations. Powell
> said the matter of "disparate compensation arrangements between carriers and
> other companies for traffic that traverses the public switched telephone
> network" is of great importance to the regulatory process and to nation's
> network.
>
>
>
> In a related matter, more obviously important to users, the FCC indicated
> that it will soon conclude its CLEC access-charges proceeding. Powell
> referred to "the soon-to-be-adopted Order regarding how much CLECs can
> tariff and charge long distance companies in access charges."
>
>
>
> The Commission also announced that telecommunications delivered to ISPs is
> interstate-access traffic, specifically "information access," and it will
> not be subject to reciprocal compensation. Ness said the Commission
> decisions have modified rate structures so that "payments more accurately
> reflect costs and the manner in which those costs are incurred." The FCC's
> goal, she said, "has been to reduce distortions in the marketplace that
> serve as impediments to competition." In opposition, Furchtgott-Roth called
> the decision "sad and shameful." The FCC is "telling private parties that
> Washington knows how to improve their lot better than they do themselves,"
> the Republican commissioner said. "We would be mandating an invasive form of
> nationwide price regulation, a great irony at a time when politicians of all
> stripes embraces the ideals of economic deregulation."
>
>
>
> Recovery of costs for originating and terminating telecommunications traffic
> delivered to ISPs has been a complex and hit-and-miss affair, characterized
> by the Commission ruling as "creating opportunities for regulatory arbitrage
> and distorted market incentives."
>
>
>
> The new rates for inter-carrier compensation of ISP-bound traffic will be
> capped at 0.15 cents ($.0015) per minute-of-use (MOU) for the next six
> months, reduced to 0.10 cents MOU for the following 18 months, and 0.07
> cents MOU after that. These amounts may appear miniscule, but multiplied by
> the millions of MOUs daily, they add up to a pretty penny. There is also a
> complex set of rules and exceptions going with the new rates, available at
> http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/2001/nrcc0114.html.
>
>
>
> The FCC decision comes a year after the US Court of Appeals for the District
> of Columbia Circuit vacated the Commission's previous declaratory ruling in
> the matter "for want of reasoned decision-making." It is possible that the
> courts may have role in deciding the case of "Intercarrier Compensation for
> ISP-Bound Traffic," but the Commission staff is likely to have considered
> the facts very closely to avoid the charge of "want of reasoned
> decision-making" again.
>
>
>
> ==================
> Janos Gereben/SF, CA
> janos451 () earthlink net



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