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IP: FCC sets new Internet carrier payment policy
From: David Farber <dave () farber net>
Date: Mon, 23 Apr 2001 04:39:08 -0400
FCC sets new Internet carrier payment policy Janos Gereben - www.the451.com [Government revamps rate arrangements between incumbent and competitive local exchange carriers in US public switched telephone network.] In a long awaited decision, the Federal Communications Commission voted 3-1 to reduce significantly carrier-to-carrier payments between incumbent local exchange carriers (ILEC) such as Bell Atlantic and SBC, and competitive local exchange carriers (CLEC) - companies acting as retail Internet service providers. FCC chairman Michael Powell, commissioners Susan Ness and Gloria Tristani voted in favor, Harold Furchtgott-Roth against the new regulations. Powell said the matter of "disparate compensation arrangements between carriers and other companies for traffic that traverses the public switched telephone network" is of great importance to the regulatory process and to nation's network. In a related matter, more obviously important to users, the FCC indicated that it will soon conclude its CLEC access-charges proceeding. Powell referred to "the soon-to-be-adopted Order regarding how much CLECs can tariff and charge long distance companies in access charges." The Commission also announced that telecommunications delivered to ISPs is interstate-access traffic, specifically "information access," and it will not be subject to reciprocal compensation. Ness said the Commission decisions have modified rate structures so that "payments more accurately reflect costs and the manner in which those costs are incurred." The FCC's goal, she said, "has been to reduce distortions in the marketplace that serve as impediments to competition." In opposition, Furchtgott-Roth called the decision "sad and shameful." The FCC is "telling private parties that Washington knows how to improve their lot better than they do themselves," the Republican commissioner said. "We would be mandating an invasive form of nationwide price regulation, a great irony at a time when politicians of all stripes embraces the ideals of economic deregulation." Recovery of costs for originating and terminating telecommunications traffic delivered to ISPs has been a complex and hit-and-miss affair, characterized by the Commission ruling as "creating opportunities for regulatory arbitrage and distorted market incentives." The new rates for inter-carrier compensation of ISP-bound traffic will be capped at 0.15 cents ($.0015) per minute-of-use (MOU) for the next six months, reduced to 0.10 cents MOU for the following 18 months, and 0.07 cents MOU after that. These amounts may appear miniscule, but multiplied by the millions of MOUs daily, they add up to a pretty penny. There is also a complex set of rules and exceptions going with the new rates, available at http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/2001/nrcc0114.html. The FCC decision comes a year after the US Court of Appeals for the District of Columbia Circuit vacated the Commission's previous declaratory ruling in the matter "for want of reasoned decision-making." It is possible that the courts may have role in deciding the case of "Intercarrier Compensation for ISP-Bound Traffic," but the Commission staff is likely to have considered the facts very closely to avoid the charge of "want of reasoned decision-making" again. ================== Janos Gereben/SF, CA janos451 () earthlink net
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