WASHINGTON-The House telecom subcommittee last week voted to include wireless carriers in a new scheme for carriers to compensate each other for carrying each other’s traffic.
The bill, which now goes to the full committee for consideration, would end the process known as reciprocal compensation and move to a bill-and-keep method, where carriers bill their customers and keep the revenues.
The notion of including wireless carriers in a debate that heretofore had been between incumbent and competitive local exchange carriers over Internet traffic was suggested last week, but wireless carriers were not included in a substitute bill introduced by Rep. Billy Tauzin (R-La.), chairman, until Rep. Edward Markey (D-Mass.), ranking member, offered an amendment, which narrowly passed 10-9.
The wireless industry is split on whether moving to bill and keep would benefit or harm the industry.
“We are pleased the subcommittee included `wireless’ in the `bill and keep’ model. … If signed into law, this legislation could save wireless consumers almost a billion dollars in the first year alone. As minutes of use continue to increase, and more consumers use wireless devices to access the Internet, consumer savings will only increase. It is amazing what a competitive industry can deliver when not hamstrung by artificial barriers and restrictions,” said Steven Berry, senior vice president for congressional affairs for the Cellular Telecommunications Industry Association.
“It is simply inequitable to force an inflexible one-size-fits-all scheme upon a telecom industry that is completely varied and technologically diverse,” said Angela Giancarlo, director of federal regulatory affairs for the Personal Communications Industry Association.
It is not only the industry that is split, some companies also are split. While AT&T Wireless Services Inc. is said to prefer bill and keep, AT&T Corp. is lobbying hard to kill the bill and keep reciprocal compensation in place.
Jim McGann, an AT&T Corp. spokesman, said the wireless piece was an improvement, but the bill was still flawed. McGann denied that AT&T Wireless supports the bill while AT&T Corp. does not. “We speak with one voice,” said McGann.
Up until Markey offered his amendment, there was a question as to whether wireless would be included. Markey said his amendment would give the same benefits to wireless companies that were being given to wireline.
“I hope we can add wireless. … It makes no sense to come back and revisit this issue and leave out the biggest part of the revolution,” said Markey.
There was some confusion as to whether fixed-wireless carriers are included.
Tauzin said he believed if commercial mobile radio service is included, fixed wireless should also be included.
“If we add wireless, we should add all wireless. We shouldn’t leave some wireless out,” said Tauzin.
Fixed-wireless carriers believe they are already included as CLECs even if they transmit calls via air rather than underground cables.
“If you go out and look at the network, it looks a little different, [but that said] this traffic is terminating on our networks” and we should be compensated for it, said Russell Merbeth, vice president of legal and regulatory affairs for WinStar Communications Inc.
CLECs oppose the bill-and-keep method of compensation for carrying traffic.
The issue of fixed wireless is expected to be debated if and when the bill is brought up before the full committee. At RCR Wireless News press time, no decision had been made as to whether the House Commerce Committee would take up the full bill.
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 consistently had issues with reciprocal compensation, they had largely been absent from the current debate that began when ILECs alleged that some CLECs were serving only Internet service providers, which meant that there would be no traffic-and hence no compensation-going in the direction of the ILECs.
Congress stepped in to fix the problem, and now wireless is involved.
ILECs are in favor of the bill-and-keep system where carriers bill their own customers and keep the revenues.
“This legislation is good for consumers because it puts an end to the regulatory games that are adding several billion dollars of cost to customers of basic telephone service. … We are particularly pleased that Congress is working toward removing the current unfair reciprocal compensation structure,” said Edward D. Young, senior vice president for federal government relations at Verizon Communications.
CLECs would prefer to keep the reciprocal compensation scheme.
“It took over four years of thoughtful discussions to write the [telecom act]. Yet some want to rewrite major portions of the act in the waning days of this Congress. This is `coin-toss legislation’ on an issue with trillion-dollar implications,” said John D. Windhausen Jr., president of the Association for Local Telecommunications Services.
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 a loophole that needs to be closed, and CLECs say the process is working as Congress intended and does not need to be fixed.
