WASHINGTON—Wireless carriers largely are against a plan proposing to reform the way and amounts telecom carriers pay each other to carry traffic.
The only wireless carrier supporting the so-called Missoula Plan is Cingular Wireless L.L.C.
“The Missoula Plan does not serve the interests of consumers because it does not adequately address and in many cases would exacerbate problems with the current intercarrier compensation and universal-service systems—that is uneconomic regulatory distinctions and incentives for inefficiency,” said wireless trade association CTIA and several other organizations and carriers. “The Missoula Plan is not the appropriate vehicle for reforming the intercarrier-compensation system and should not serve as the framework for future discussions.”
The wireless association wants a bill-and-keep system. Rural local exchange carriers say that if bill-and-keep is adopted, they would lose a significant revenue source that is necessary to keep their networks functioning.
“We believe we have the right plan, at the right time and the stars are aligned. We are hopeful that we could have an order in early 2007,” said Joel Lubin, vice president of regulatory planning & policy for AT&T Inc. “There are people out there who argue for bill-and-keep. It is easy to argue for something that benefits only one side. It is more difficult to work together to find a solution that bridges the gulf,” said Lubin.
Verizon Communications Inc. did not participate in the Missoula Plan negotiations.
The Missoula Plan is meant to transition from a narrowband to a broadband world, said Lubin, noting it does not do this in a flash cut, but rather is measured and balanced.
The plan identifies pricing, rights and responsibilities for “virtually every combination of traffic if one end of the traffic is touching the public-switched telephone network,” said Lubin.
The Missoula Plan creates three tracks based on carrier size. Track I includes all wireless carriers, large wireline carriers and competitive local exchange carriers; track II is for mid-size rural wireline carriers; and track III is for rural rate-of-return local exchange carriers. For track I carriers, the subscriber line charge will increase in four steps to a cap of $10. The increase for tracks II and III will be less with the SLC charge capped at $8.75. The SLC contributes to universal service funding.
RLECs are further protected by a provision in the plan that would kick in if the reduction of intercarrier compensation was greater than the increase in the cap.
End users receiving Lifeline support would not be required to pay any SLC increases.
“All of the money is in the system, it is being recovered differently. All of this money will be recovered,” said Lubin.
The Missoula Plan also proposes to solve the phantom–traffic problem by defining certain rights and responsibilities and the exceptions to those rules. Phantom traffic is network activity that cannot be billed—either no one claims the traffic or the originator cannot be identified. The situation can eat into carriers’ bottom lines since network time and resources are being used, but no one is being compensated.
The Federal Communications Commission is examining how to overhaul the intercarrier-compensation regime. Several years ago, the Intercarrier Compensation Form presented a reform proposal that was also rejected by the wireless industry.
The Missoula Plan got its name because negotiations began two years ago in that Montana town. Since the Missoula Plan has been nudged along with the help of Ray Baum of the Oregon Public Utilities Commission, chairman of the intercarrier-compensation task force of the National Association of Regulatory Utility Commissioners, it has been viewed as a NARUC proposal.
“NARUC does not have an official position on the Missoula Plan,” said Tony Clark, chair of the NARUC telecommunications committee and a member of the North Dakota Public Service Commission.
The Missoula Plan is expected to be a key topic of discussion when NARUC meets next week in San Francisco.
