Industry Coalition Urges FCC to Reform Intercarrier Compensation System and Focus on Policies to Spur Development of IP Services

WASHINGTON - Citing "revolutionary" changes in technology and the marketplace, a broad coalition of technology, telecommunications and wireless companies and trade associations is supporting the Federal Communications Commission's effort to enact comprehensive reform of the nation's intercarrier compensation system.

In a letter filed with the FCC today, the group urged commissioners to "focus on policies that will help spur the continued evolution to more advanced IP and broadband networks," and commended the agency for its plan to complete the complicated task by November.

"Now more than ever, it no longer make sense to perpetuate a system that requires or permits terminating carriers to apply different rates for different traffic based on arbitrary distinctions," the group wrote.  "Comprehensive reform of the existing intercarrier compensation system is critical to accommodate progress and innovation, and to ensure technological and competitive neutrality."

AT&T, CompTIA, CTIA - The Wireless Association, Global Crossing, the Information Technology Industry Council, National Association of Manufacturers, New Global Telecom, PointOne, Sprint Nextel Corp., The Telecommunications Industry Association, T-Mobile, Verizon and the VON Coalition signed the letter.

The group's filing suggests that the first step in the reform process should be to "clarify the regulatory requirements associated with the fastest growing segment of the communications industry - Internet Protocol ("IP")-based technologies and services."  The coalition also urges the agency to issue two rulings clarify that all IP-based voice services, if regulated at all, are subject to exclusive federal jurisdiction, and to establish uniform compensation rules applicable to all traffic exchanged with or on the public switched telephone network.

The letter suggests that the new comprehensive rules "ultimately should result in uniform terminating rates for all carriers at a level below existing intercarrier compensation rates."  The filing suggests a rate no higher than $.0007 per minute of use, the current rate for transport and termination of ISP-bound traffic. The group also stated that a transition to these new rules "should allow for appropriate alternative recovery mechanisms, if needed."   The letter concluded:

"The Commission must focus on policies that will help spur the continued evolution to more advanced IP and broadband networks.  If the Commission is to ensure the future growth and development of these services, it must not only eliminate multiple, and potentially capricious, compensation regimes.  It must also create a uniform, rational compensation system. The evolution to IP-based services will create a more competitive environment and will bring new and innovative services to consumers in all areas of the country. However, for this trend to continue, the Commission must take these important steps and reject efforts to apply legacy regulation to the IP world - whether that involves state regulation or the legacy intercarrier compensation structure.  By doing so, the Commission can ensure the continued development and deployment of new innovative IP services, as well as of broadband platforms on which those services depend."

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