WASHINGTON-Americans trying to call mobile phones in Ecuador recently may have found it difficult, and now the Federal Communications Commission is opening a broad investigation into “whipsawing”-a broad range of anticompetitive behaviors by foreign carriers to extract higher settlement rates from U.S. telecommunications companies, including wireless firms.
“U.S.-to-Ecuador mobile-terminating traffic has been disrupted since March 2005 because AT&T Corp. and other carriers would not agree to a non-cost justified mobile termination rate increase in excess of 100 percent from the existing rate agreement,” James J.R. Talbot, AT&T senior attorney, told the FCC in June.
The FCC had been expected to consider the notice of proposed inquiry, the first step in a rulemaking process, at its meeting earlier this month but it was pulled from the agenda to give the commission more time to consider issues dealing with how digital subscriber lines should be regulated. Consideration of an NOI typically takes about a year.
“We are particularly concerned about instances in which foreign carriers used circuit disruptions or threats of circuit disruptions to force U.S. carriers into settlement rate increases. We seek comment in this NOI on alternative approaches we may take to avert circuit disruptions or blockages and on ways to streamline our procedures in order to respond more effectively to such anticompetitive or ‘whipsawing’ conduct. The record developed from this NOI should help us determine whether to propose changes to current FCC policy and procedure to ensure that U.S. customers enjoy competitive prices as they make calls to international destinations,” said the commission Monday.
The Bush administration called whipsawing unacceptable. “Blocking circuits to extract higher rates from U.S. consumers is not acceptable. Circuit blocking is contrary to the best practices of growing digital economies and the expansion of e-commerce,” said Michael Gallagher, assistant Commerce secretary for communications and information.
AT&T also was pleased. The “NOI sends a strong signal that this behavior must stop, that service must not be disrupted as a negotiating tactic, and that unwarranted costs must not be unilaterally imposed on American consumers,” said Len Cali, AT&T vice president of law and director of federal government affairs.
The FCC specifically asked whether mobile-traffic disruptions were sufficient to be considered by the government.
“Should we consider disruptions limited to certain portions of the network, such as mobile circuits, to be a form of circuit disruption or blockage? Are service degradations also a form of circuit disruption or blockage?” asked the FCC.
