WASHINGTON-The wireless and wireline industries are battling it out at the Federal Communications Commission over how much they should pay to connect the other’s calls.
Sprint PCS asked the FCC in February to change the way reciprocal compensation is calculated when traffic goes from a wireline carrier to a wireless carrier. Basically, Sprint is asking that the cost of using its mobile facilities be calculated into the compensation package, which likely would increase the costs wireline companies pay to wireless ones. Last week’s comments were in response to Sprint’s request.
“Sprint PCS’ proposed approach to reciprocal compensation is economically irrational and would produce absurd results. It rests on the notion that all costs incurred on `shared’ facilities are `traffic sensitive’ and therefore recoverable in reciprocal compensation … All costs ultimately are traffic sensitive … If Sprint PCS’ principle were the general rule, all carriers’ reciprocal compensation charges would skyrocket,” said U S West Communications Inc.
“The commission discussed at some length … the types of costs that wireline carriers may recover for terminating local traffic, adopting a two-step process for determining compensable costs … The commission never performed a similar `additional cost’ analysis for mobile networks, which use mobile switching centers, cell sites and spectrum instead of tandem switches, end offices, and copper loops. State commissions, rather than examining the additional costs [commercial mobile radio services] providers incur in terminating traffic, have instead focused on the `equivalent facility’ language [in the rules] and in some instances have limited CMRS cost recovery to those mobile-network components they deem to be `equivalent’ to network components utilized in wireline networks,” said Kansas City-based Sprint PCS.
In addition, Sprint questioned whether states have the legal right to determine the rates CMRS carriers pay to interconnect calls, since states cannot regulate CMRS rates.
Wireless trade associations and carriers, by and large, supported the Sprint request.
The Personal Communications Industry Association “also strongly agrees with Sprint PCS that the full recovery by CMRS carriers of the additional usage-sensitive costs of call termination is essential to create a level competitive playing field and to enable CMRS carriers to become full-fledged competitors to the wireline telephone service. The full benefits of robust competition will not be achieved if CMRS carriers cannot recover all of the traffic-sensitive termination costs being imposed on them by the customers of originating carriers,” said PCIA.
AT&T Corp., which like Sprint, provides long-distance services along with its wireless offerings, disagreed.
“The commission should reject Sprint’s request because it would give carriers incorrect and inefficient incentives regarding network deployment and technology choice, have far-reaching effects on all cost-recovery mechanisms, and unnecessarily complicate intercarrier compensation processes,” said AT&T.
Universal-service fees
Coincidentally, four days after the industry commented on the Sprint proposal, the U.S. Supreme Court said it would hear a case on how universal-service fees are calculated.
This case, said Michael Altschul, could have an impact on reciprocal compensation between wireline and wireless calls. Altschul is the vice president and general counsel for the Cellular Telecommunications Industry Association.
In the case, which comes from the U.S. Court of Appeals for the 5th Circuit, GTE Corp. argues that historical costs should be used to determine universal-service fees. Rather than historical embedded costs, the FCC said forward-looking costs should be used.
