WASHINGTON-The mobile-phone industry has recommended to federal regulators six principles that it believes will improve the nation’s inter-carrier compensation regime.
“We believe that fundamental reform of the intercarrier compensation system is essential if consumers are to enjoy the benefits of an economically efficient telecommunications regime,” said CTIA President Steve Largent in a letter yesterday to the Federal Communications Commission.
The FCC is considering reforms to inter-carrier compensation rules.
Largent stressed the need for a new system that focuses on consumer benefits, while encouraging innovation and competition and minimizing costly administrative complexity.
“To date, many of the proposals filed with the commission appear simply designed to enrich certain carriers and industry segments without regard to the long-term impact of those proposals on consumers’ interests in intermodal competition and the deployment of new and innovative products and services,” said Largent.
Largent noted that the current system permits and even encourages incumbent local exchange carriers to increase their costs to receive higher intercarrier compensation and universal service revenues. “These systems should be reformed to focus incentives on enhancing economic efficiency, rather than maximizing subsidies,” said Largent.
The following are the six principles for intercarrier compensation outlined by CTIA:
- Rules should focus on benefits to consumers and should not guarantee that reforms would be revenue neutral for any class of incumbent carrier.
- Rules should encourage economic efficiency and promote competition.
- Rules should be technology neutral and should not confer a competitive advantage on one category of carrier or service provider over another.
- Each carrier should be responsible for recovering its network costs from its own customers, and in a competitive market, should have flexibility in how those costs are recovered.
- Universal service support should be targeted and no higher than necessary to ensure affordable end-user rates.
- Rules should be as simple as possible to administer.
