WASHINGTON-Capitol Hill was all a flurry last week with activities related to the wireless industry, some out in the open and others behind closed doors.
RCR Wireless News has learned the wireless industry has joined in a Capitol Hill fight on how local phone carriers compensate each other to carry traffic. The wireless industry has not publicized its lobbying on reciprocal compensation, nor does the industry appear to be united on the issue.
Meanwhile, the House late Thursday included language to phase out the 3-percent telephone excise tax in a bill that funds Congress, the Department of the Treasury and the Postal Service; and the House telecom subcommittee passed a “truth in billing” bill.
Wireless joins reciprocal-compensation fight
The House telecom subcommittee tonight is expected to mark up a bill that would change the current compensation scheme between incumbent local exchange carriers and competitive LECs. Carriers presently use a “reciprocal” format. Carriers would use a “bill-and-keep” format if the legislation becomes law.
A substitute amendment is expected to be offered to the committee tonight that includes commercial mobile radio services in the definitions.
“No telecommunications carrier shall be obligated to pay reciprocal compensation … that originate on the network facilities of another [LEC] or [CMRS]. Such costs shall be exclusively recovered through bill-and-keep arrangements that offset and waive recovery from the originating carrier, unless otherwise agreed by the interconnecting carriers,” reads a draft of the substitute amendment.
The Telecommunications Act of 1996 set up a system of reciprocal compensation, where carriers would pay each other for carrying each other’s traffic.
While the wireless industry has had problems with reciprocal compensation, the industry had largely been absent from the current debate that began when ILECs alleged that some CLECs were serving only Internet service providers, which meant there would be no traffic-and hence no compensation-going to the ILECs.
ILECs are in favor of the bill-and-keep system where carriers bill their own customers and keep the revenues. CLECs would prefer to maintain the reciprocal-compensation formula.
The ironic thing about the current debate is that when the two sides were fighting over the telecom act, their positions on reciprocal compensation were reversed.
Now, ILECs say it is loophole that needs to be closed and CLECs say the process is working as Congress intended.
Truth-in-billing
The truth-in-billing legislation requires carriers to list all taxes, levies and fees in a one-line, easy-to-read format on bills. Lawmakers introduced the bill to stop the plethora of confusing bills sent out by carriers once they began charging customers to offset universal-service fees they were required to pay to the government. Some carriers wanted to label the universal-service assessment as a tax; some wanted to give customers lengthy explanations.
The bill now goes to the House Commerce Committee.
Tax on talking phase-out
The House late Thursday passed legislation to phase out the 3-percent tax on talking.
The legislation was included in a bill that narrowly passed the House and whose future is uncertain. It now goes to the Senate.
The legislation would phase out the tax on talking by 1 percent each year beginning one month after enactment until the tax is eliminated.
“Congress is supporting strong competition in telecommunications by eliminating the vestiges of a tax-and-regulate approach that no longer makes sense,” commented Dennis Strigl, president of Verizon Wireless.
