WASHINGTON-CTIA told state regulators earlier this week that they should focus on the needs of wireless consumers-and the benefits wireless can bring to rural America-rather than boosting the revenues of rural incumbent local exchange carriers.
“CTIA is concerned that the National Association of Regulatory Utility Commissioners Intercarrier Compensation Task Force is considering proposals that overlook what’s best for consumers and focus instead on maximizing revenue recovery for rural incumbent local exchange carriers. A proposal that fails to unify and greatly reduce intercarrier charges or expands the unsustainable embedded cost-based universal-service regime will subject consumers in both rural and non-rural areas to higher costs and less competitive choice. Importantly, the absence of full unification will place the existing intercarrier-compensation system at greater risk as consumers migrate more and more traffic off the wireline circuit-switched network to alternatives such as Internet Protocol enabled services,” wrote CTIA President Steve Largent.
The wireless association again called for a bill-and-keep system. The “Mutually Efficient Traffic Exchange” proposal would require carriers to recover whatever costs they incur from delivering a call from an end user, not another carrier. Rural LECs contend that if bill-and-keep is adopted, they would lose a significant revenue source they say is necessary to keep their networks functioning.
A task force of state regulators is currently examining how the intercarrier-compensation regime should be reformed. Intercarrier compensation refers to the payments made between carriers for connecting calls on each other’s network. The Federal Communications Commission also is considering overhauling the intercarrier-compensation regime. The chief of the FCC’s Wireline Competition Bureau, Thomas Navin, told reporters Jan. 20 that intercarrier-compensation reform was a major priority for 2006.
CTIA also opposes any move that would allow rural carriers to charge for calls within a metropolitan trading area but that may be out of a RLEC’s service territory. Rural carriers have wanted to charge access charges for these calls, but the FCC has consistently ruled that these calls do not qualify for access charges.
The wireless trade association also spoke against proposals to replace the access charges that RLECs now receive for connecting long-distance traffic with additional universal-service support. Such support would not be available for wireless carriers.
“Any new universal-service support mechanism must be fully portable to qualified wireless competitors,” said Largent. “Discriminating against wireless carriers in the distribution of access revenue replacement mechanisms on the grounds that they never collected access charges, as some carriers have proposed, would give significant cost-recovery advantages to wireline incumbent carriers, providing artificial incentives for consumers to purchase wireline services and discourage market entry for more efficient and innovative competitors.”
In addition to intercarrier-compensation reform, Navin said the FCC expects to work on reforming the universal-service system. The universal-service system was set up in the 1930s to bring telecommunications services to high-cost areas by using long-distance revenues. Complications arose when the Bell monopoly was broken up in the 1980s, but the system was codified into the Communications Act in 1996. The only change Congress made was to make it possible for all telecom providers to receive funds if they served high-cost areas.
Now with many consumers using mobile phones and Internet telephony to make long-distance calls, less money is going into the system. At the same time, additional providers-mostly wireless carriers that have taken the second-line business from wireline carriers-have begun receiving proceeds from the fund.
