The paging industry is celebrating the Federal Communication Commission’s recent ruling on interconnection rates-for the most part.
The new regulations are expected to save paging carriers money, but new state level arbitration authority could prove time-consuming and expensive.
The FCC mandate means not only that paging carriers no longer have to pay local exchange carriers for terminating LEC traffic, but that paging carriers will get paid by the LECs to terminate LEC traffic.
“We are feeling really good about the decision that came out,” commented Don Shirley, director of advanced wireless technology at Paging Network Inc. “We were bearing a lot of additional expense, generating a great deal of income for the phone companies.” PageNet initiated lobbying efforts to eliminate LEC call termination charges more than two years ago, said Shirley.
Rob Cohen, legal counsel for the Personal Communications Industry Association, said, “LECs were supposed to pay paging companies (to terminate calls) under old rules but because of their marketing power, they decided not to.”
Previous interconnect charges varied by regional Bell operating company, said Shirley. Combined, PageNet budgeted a penny per page for terminating LEC calls on its networks. “That doesn’t sound like a lot, but we process about a million pages a day in any given local market…like Chicago or Indianapolis,” Shirley said. PageNet has not calculated the exact savings it expects as a result of the recent ruling, but estimated the amount to fall between $10 million and $100 million dollars per year.
Gene Belardi, vice president, regulatory counsel for MobileMedia Corp., is pleased the FCC recognized carriers shouldn’t pay to terminate landline-originated calls. He noted the ruling enables alternative access providers, or competitive LECs, to gain access to LEC facilities as well as their own, and allows CLECs to set their own rates. This could result in more competition and lower rates, he added.
However, “we had hoped they would have pre-empted the states and set the rates,” said Belardi.
The new ruling “may mean that how long the phone company has to deliver our services, to upgrade our services, fulfill requirements to meet our demand and how long an RBOC has before they need to work on this new ruling could be defined at the state level,” said Shirley.
Aside from expense and time involved with state level arbitration, the industry is uneasy about state level authority because “there are no default rates or proxy models for paging carriers,” said Cohen. And while the FCC order requires LECs to compensate paging carriers for call termination, how much compensation will be determined at the state level.
Cohen said not enough information about termination costs, with respect to paging, was on record, so the FCC did not propose any models for states to determine reasonable charges. Such guidelines were designed for broadband commercial mobile radio services based on comments submitted by LECs and various wireless providers. The FCC said it would seek comment on this issue as it relates to paging.
Shirley pointed out that dealing on the state level is not new for PageNet and some other paging carriers. “We have relationships with those public utilities commissions that already regulate paging. The goal is to have commissions adopt state rulings consistent with the FCC ruling.”
The Omnibus Reconciliation Act of 1993 gives the FCC authority to regulate rates and terms of entry for CMRS providers. The FCC said it reserves the right to pre-empt state authority if a state’s decisions regarding interconnection are unreasonable.
LECs are required by Jan. 1 to unbundle much of their networks on a nondiscriminatory basis to anyone wanting to provide service. When prices will come down is uncertain. Karen Brinkmann, Wireless Telecommunications Bureau associate chief, did not provide a definitive time frame.
“We’re not anticipating immediate relief anytime soon, but we are beginning to communicate with our LECs about how this is going to get done and when it’s going to get done,” said Shirley.
