On Friday, November 18, 2011, the U.S. Federal Communications Commission ("FCC") released an order, adopted October 27, 2011, comprehensively overhauling the nation's existing universal service fund ("USF") and intercarrier compensation ("ICC") regime. The full text of the Order is available on the FCC's website. Below we have provided a summary of the 759 page Order's key points.
UNIVERSAL SERVICE REFORM
As was widely expected, the Order eliminates the existing high-cost funding mechanism in its entirety, replacing it after a transition period with three funds designed to support broadband information services: the Connect America Fund ("CAF"), the Mobility Fund, and the Remote Areas Fund, which tie funding to broadband build-out obligations, along with an ILEC access replacement mechanism. The total funding for all replacement mechanisms will be capped at $4.5 billion annually, the same level as the high-cost program for Fiscal Year 2011, with $4 billion earmarked for price-cap and rate-of-return carrier service areas and the remaining $500 million of funding reserved for mobility voice services. Existing support will be frozen and the transition to the new support mechanisms will begin January 1, 2012.
Under the new support system all ETCs will be required to offer voice as well as broadband service at rates reasonably comparable to those available in urban areas and to report regularly on a number of performance measures, including speed, latency, capacity, and build-out progress which must be tested, if applicable, and reported to the Commission and will be subject to audit. ¶¶ 74-97, 584-7. ETCs will be subject to a uniform national reporting framework that modifies existing reporting and certification obligations, but that may be expanded upon by the states. ¶¶ 568, 574.
Universal Service Fund Phase-out
- ETCs currently receiving support will have their support frozen
as of year-end 2011 and phased out in 20% increments over a
five-year period beginning on July 1, 2012. ¶¶ 513,
519.
- The support baseline will be set at the lower of the
carrier's 2011 support or at an amount equal to $3,000 times
the number of lines reported at the end of 2011. ¶ 515.
- The support phase-down will stop on June 30, 2014 if Mobility
Fund Phase II is not operational by that date, which would ensure
approximately $600 million per year of legacy support until new
mechanism is operational. ¶ 519.
- A "waiver" process from the phase-out of funding is
available in cases of "extreme hardship" where the
carrier can demonstrate that the reduction in support would put
consumers at risk of losing voice service, with no alternative
service available. However, the Commission expressly stated that it
does not expect to grant waiver requests routinely. ¶¶
539-42.
- ETCs serving Tribal areas are required to demonstrate on an
annual basis that they have meaningfully engaged Tribal governments
in their supported areas, and must do so before the submission of
their long form applications. ¶¶ 636-637.
Mobility Fund
The Mobility Fund for wireless carriers will be implemented in two phases with a transition period.
Mobility Fund -- Phase I
Phase I of the Mobility Fund will provide one-time support to designated ETCs to deploy 4G and 3G wireless voice services to areas currently "unserved" by such services, as determined by the Commission.
- Phase I will be capped at $300 million annually.
- A separate $50 million for a Tribal Mobility Fund directed
towards Tribal and Hawaiian Home Lands that will follow the same
general terms and conditions as the Mobility Fund, but with 25%
bidding credit for Tribally-owned or controlled providers; ¶
126, n. 197, ¶ 484, ¶ 490.
- Mobility Fund support will be awarded to no more than one
provider per area, with limited exceptions. ¶ 316.
- Funds will be distributed by a competitive bidding process
targeting currently unserved areas, measured in reference to
American Roamer data on a census block level. ¶ 334.
- Prior to participating in the auction, participants must be
designated as an ETC, have access to spectrum capable of supporting
3G or better services (¶ 394, ¶ 440), and be able to
certify its financial (¶ 444) and technical capability to
provide the required services (¶ 401). Carriers that have made
regulatory commitments or federal funding to provide 3G or better
service prior to the auction application deadline will not be
eligible. ¶ 453 However, to encourage auction participation by
Tribally-owned or controlled providers, such providers that have
applied for ETC designation by the time of the short-form auction
application deadline may apply for Phase I Tribal Mobility Fund or
General Mobility Fund support in Tribal areas.
- To obtain funding carriers must commit to using funds to deploy
4G services within 3 years or 3G services within 2 years to at
least 75% of the road miles associated with census blocks
designated as "unserved" by the Commission in advance of
the auctions. ¶ 365.
- Additional public interest obligations will be associated with
Mobility Fund support, including reporting on performance
requirements (¶ 369, ¶ 471), reasonable collocation
(¶ 376), voice and data roaming (¶ 379), and the
provision of service at reasonably comparable rates. ¶
384.
- The Mobility Fund auctions will be structured as a single-round
sealed bid format (¶ 413), with participants required to
complete a two-stage application (¶ 417, ¶ 435), and
subject to additional policies and rules promulgated by the
Wireless Bureau prior to auction. ¶ 420.
- Winning bidders will have support provided in three
installments, the first installment after its long-form post
auction application is granted (¶ 466), the second when the
carrier has provided service to 50% of its coverage area (¶
466), and the final installment when the carrier filed with USAC a
report demonstrating that it has met its coverage
obligations.
- The first reverse auctions are expected to be held beginning in
the third quarter of 2012.
Mobility Fund -- Phase II
Will provide ongoing, annual support of up to $500 million which will include up to $100 million set aside for a Tribal Mobility Fund targeting Tribal lands. (¶ 494) The proposed details of the Mobility Fund Phase II are outlined in a the FNPRM discussed below.
- Support will only be provided to a single carrier in each area
supported by the Mobility Fund.
- A competitive bidding process will be used to determine which
carriers receive support.
- The Phase II mechanism rules are expected to be adopted in 2012
and implemented in 2013. ¶ 514.
Remote Areas Fund
The FCC also established a Remote Areas Fund, designed to fund deployment to extremely high cost of service areas.
- Will provide at least $100 million annually to a fund broadband
deployment to the country's most remote areas. ¶
534.
- The technology used to participate in the Remote Area Fund will
not be restricted, allowing satellite broadband providers and
wireless Internet service providers to be eligible for
participation. ¶ 537.
- The details of the Remote Areas Fund are outlined in a the
FNPRM discussed below.
The Connect America Fund
The CAF for carriers capable of deploying 4 Mbps download and 1 Mbps upload broadband services will be implemented in two phases, with support under the CAF directed almost exclusively to price-cap and rate-of-return carriers.
To fund these programs the Commission amended its rules to allow the universal service fund to "accumulate reserves" to facilitate the transition to the CAF and the Mobility Fund. ¶ 546, 564. The Commission fails to mention that the FCC's ability to establish similar reserves is currently being challenged before the D.C. Circuit and may not withstand judicial challenge.
- CAF Phase I: Price Cap Carriers
- Effective January 1, 2012, support for price cap areas will be
frozen and phased out over five years.
- A $300 million fund will be created targeting price cap carrier
service areas that lack fixed broadband services of at least 768
kbps download and 200 kbps upload speeds, as identified by the
Commission's National Broadband Map. ¶ 105.
- Funds will be distributed by the use of a forward-looking cost
model that will generate an estimate of the broadband build-out
costs for the price-cap carrier's wire center, which the
carrier may elect to receive in exchange for a commitment to deploy
4 Mbps download -1 Mbps upload broadband to locations
"unserved" by services of at least 768 kbps download
speeds.
- The price-cap incumbent LEC will be eligible to elect to
receive $775 of additional "incremental" support for each
location served and must complete the proposed build-out within 3
years. ¶ 138.
- Carriers must certify that the funds will be deployed only to
"unserved" locations and that the carrier did not have
plans to deploy to that area within the next three years. ¶
146.
- Effective January 1, 2012, support for price cap areas will be
frozen and phased out over five years.
- CAF Phase II: Price Cap Carriers
- Effective January 1, 2012, support for price cap areas will be
frozen and phased out over five years.
- The Commission will model forward looking costs to estimate the
expense of deploying wireline networks on a census block or smaller
basis. ¶ 189 Using the cost model the Commission will offer
each price cap LEC annual support for five years in exchange for a
commitment to offer voice and broadband throughout its service
territory, subject to public interest obligations. The list of
eligible census blocks is expected to be published before the end
of 2012. ¶ 171.
- If the price cap carrier declines to participate the area's
support will be distributed to other carriers using a competitive
bidding mechanism developed in the FNPRM in order to deploy
broadband services to those areas, subject to the $1.8 billion
cap.
- This modified "right of first refusal" is among the
most controversial pieces of the Order and is likely to be the
source of a judicial challenge.
- If the price cap carrier declines to participate the area's
support will be distributed to other carriers using a competitive
bidding mechanism developed in the FNPRM in order to deploy
broadband services to those areas, subject to the $1.8 billion
cap.
- The Phase II CAF will not provide support in areas where
unsubsidized competitors are providing broadband - defined as a
facilities based provider of residential terrestrial fixed voice
and broadband services. ¶ 103.
- Support recipients will be required to build out 4 Mbps
download - 1 Mbps upload services to 85% of their high-cost
locations within 3 years covered by a state-level commitment and
100% coverage within 5 years, with some locations upgraded further
to 6 Mbps - 1.5 Mbps speeds by that point. ¶ 160 There is a
limited exception for areas where there exists no terrestrial
backhaul, the supported carrier must only provide speeds of 1 Mbps
download - 256 kbps upload speeds. ¶ 101.
- After the five-year period, the Commission will use competitive
bidding to distribute any universal service support needed in those
areas, with bidding open to all carriers. ¶ 178.
- The FCC expects that the model and competitive bidding
mechanism will be adopted by December 2012, and disbursements will
ramp up in 2013 and continue through 2017.
- Effective January 1, 2012, support for price cap areas will be
frozen and phased out over five years.
- CAF Phase II: Rate of Return Carriers
- Rate of return carriers will be awarded $2 billion in support
annually, subject to a less demanding build-out obligation, but
will face the elimination and phasing out of support in areas
currently served by an unsubsidized competitor and for lines that
exceed $250 per month in support. ¶ 194-203.
- Rate of return carriers will be awarded $2 billion in support
annually, subject to a less demanding build-out obligation, but
will face the elimination and phasing out of support in areas
currently served by an unsubsidized competitor and for lines that
exceed $250 per month in support. ¶ 194-203.
The Connect America Fund – FNPRM
- Public Interest Obligations
- The Order alters many of the public interest obligations of
carriers. In the FNPRM, the FCC is seeking comment on how to
implement those changes, including: ¶ 1012.
- Measuring Broadband Service. The Order requires actual speed
and latency to be measured on each ETC's network. The FCC seeks
comment on the methodology used to measure broadband speeds, what
data should be made available, and the FCC's reporting
requirements. ¶ 1013.
- Reasonably Comparable Voice and Broadband Services. The Order
directs the Wireline Competition Bureau and Wireless
Telecommunications Bureau to conduct a survey of voice and
broadband rates. The FCC seeks comment on how to conduct the
survey, for example, how should the FCC collect and measure data on
reasonably comparable voice and broadband services, including data
speeds, fixed vs. mobile services, and reasonable ranges of rates.
¶ 1018.
- Interconnection Requirements. The FCC seeks comment on proposed
interconnection requirements for CAF recipients. ¶ 1028.
- Measuring Broadband Service. The Order requires actual speed
and latency to be measured on each ETC's network. The FCC seeks
comment on the methodology used to measure broadband speeds, what
data should be made available, and the FCC's reporting
requirements. ¶ 1013.
- The Order alters many of the public interest obligations of
carriers. In the FNPRM, the FCC is seeking comment on how to
implement those changes, including: ¶ 1012.
- Interstate Rate of Return Represcription
- Rate-of-return carriers will continue to receive modified
versions of legacy universal service support. The FCC seeks comment
on how the Order's changes in universal services support fit
within the broader framework for rate-of-return carriers, and how
the changes are linked to other FNPRM proposals, including the
separate CAF support mechanism for rate-of-return carriers. ¶
1044.
- Rate-of-return carriers will continue to receive modified
versions of legacy universal service support. The FCC seeks comment
on how the Order's changes in universal services support fit
within the broader framework for rate-of-return carriers, and how
the changes are linked to other FNPRM proposals, including the
separate CAF support mechanism for rate-of-return carriers. ¶
1044.
- Eliminating Support for Areas with an Unsubsidized Competitor
- The Order begins a three-year phase out process for high-cost
support for incumbent rate-of-return carriers in study areas where
an unsubsidized competitor serves 100 percent of the residential
and business locations in the study area. The FCC seeks comment on
several aspects of the phasing out process, specifically: ¶
1061.
- How should the FCC implement the Order's phase-out of
support for incumbent rate-of-return carriers where unsubsidized
competitors offer services?
- What methodology should be used to determine the extent of
overlap, such as how to use small block and large block data?
- What should the process for affected ETCs to challenge
purported overlap be? Should there be state commission involvement?
If so, how?
- How should the FCC adjust support levels in areas of less than
100% overlap?
- How should the FCC implement the Order's phase-out of
support for incumbent rate-of-return carriers where unsubsidized
competitors offer services?
- The Order begins a three-year phase out process for high-cost
support for incumbent rate-of-return carriers in study areas where
an unsubsidized competitor serves 100 percent of the residential
and business locations in the study area. The FCC seeks comment on
several aspects of the phasing out process, specifically: ¶
1061.
- Limits on Reimbursable Capital and Operating Costs for
Rate-of-Return Carriers
- The Order adopts a rule to use benchmarks for reasonable costs
to impose limits on reimbursable capital and operating costs. In
the FNPRM the FCC seeks comment on its proposed methodology for
limiting reimbursable capital and operating costs for high-cost
loop support received by rate-of-return carriers. ¶
1079.
- The Order adopts a rule to use benchmarks for reasonable costs
to impose limits on reimbursable capital and operating costs. In
the FNPRM the FCC seeks comment on its proposed methodology for
limiting reimbursable capital and operating costs for high-cost
loop support received by rate-of-return carriers. ¶
1079.
- ETC Service Obligations
- The CAF shifts support to deploying modern broadband and voice
services. The FCC seeks comment on how the shift to CAF should
change ETC service obligations. ¶ 1089.
- Given the Order's reduced or eliminated universal service
support for legacy voice service, should voice obligations be
reduced? ¶ 1095.
- The FCC has forborne section 214(e)(1) ETC requirements, and
interprets section 10 as allowing future forbearance of the
"throughout [their] service area" requirement if
satisfactory criteria are met. The FCC seeks comment on this
interpretation. ¶ 1097.
- The FCC seeks comment on commenter proposals for broader
modifications such as blanket forbearance in areas receiving no
universal service support or reinterpretation of section 214(e)(1)
to apply only to areas where those services are supported. ¶
1098.
- Given the Order's reduced or eliminated universal service
support for legacy voice service, should voice obligations be
reduced? ¶ 1095.
- The Order creates a rule that would reduce support for entities
that receive high-cost support but do not fulfill their public
interest obligations. The FCC seeks comment on whether to adopt
financial guarantees or penalties to increase accountability for
recipients of high-cost support. ¶ 1104.
- The CAF shifts support to deploying modern broadband and voice
services. The FCC seeks comment on how the shift to CAF should
change ETC service obligations. ¶ 1089.
- Annual Reporting Requirements for Mobile Service Providers
- The Order imposes annual reporting requirements for recipients
of USF support under new section 54.313. Should the FCC revise or
replace 54.313 requirements for mobile service providers that do
not reflect the nature of the mobile service being offered? ¶
1117.
- The Order imposes annual reporting requirements for recipients
of USF support under new section 54.313. Should the FCC revise or
replace 54.313 requirements for mobile service providers that do
not reflect the nature of the mobile service being offered? ¶
1117.
- Mobility Fund Phase II
- The Order establishes the Mobility Fund to promote the
availability of mobile broadband services. In the FNRPM the
Commission proposes to use a reverse auction mechanism to
distribute support and seeks comment on this approach as well as
alternatives. ¶ 1122.
- Framework for Support under Competitive Bidding
- The Commission proposes census blocks as the minimum size
geographic areas. American Roamer data regarding the availability
of 2G and 3G or higher service would be used to determine
eligibility for support. The Commission seeks comment on the use of
other proxies, data sources, or technologies that should be
considered to determine eligibility of census blocks. ¶
1124.
- The FCC seeks comments on the need for package bidding or
whether it should defer to a bidder-defined approach. ¶ 1131.
- The FCC proposes using TIGER census data to determine road
miles and basing bidding units and coverage requirements on this
data and seeks comment on this approach. ¶ 1134.
- The FCC additionally seeks comment on maximizing consumer
benefits, lengths of terms of support, provider eligibility
requirements, and public interest obligations for Mobility Fund
providers. ¶ 1136-1151.
- The FCC proposes using TIGER census data to determine road
miles and basing bidding units and coverage requirements on this
data and seeks comment on this approach. ¶ 1134.
- The Commission proposes auction rules based on a reverse
auction system and seeks comment on the number of bidding stages,
bidding preference for small business, and the application process,
which is similar to that used in the Mobility Fund Phase I,
discussed above. ¶ 1155.
- An economic model-based process could be used as an alternative
to competitive bidding. The FCC seeks comments on how to design
such a model and the framework for such a process. ¶ 1174.
- Specifically, how could "brownfield" and
"greenfield" models as proposed by US Cellular and MTPCS,
and CostQuest, be constructed and what are each model's
advantages? ¶ 1177-1178.
- If an economic model approach is used, which elements of the
framework, such as public interest obligations, granularity of
geographic units, length of term support or other elements would
need to change? ¶ 1183-1188.
- Specifically, how could "brownfield" and
"greenfield" models as proposed by US Cellular and MTPCS,
and CostQuest, be constructed and what are each model's
advantages? ¶ 1177-1178.
- The Commission proposes census blocks as the minimum size
geographic areas. American Roamer data regarding the availability
of 2G and 3G or higher service would be used to determine
eligibility for support. The Commission seeks comment on the use of
other proxies, data sources, or technologies that should be
considered to determine eligibility of census blocks. ¶
1124.
- The Order establishes the Mobility Fund to promote the
availability of mobile broadband services. In the FNRPM the
Commission proposes to use a reverse auction mechanism to
distribute support and seeks comment on this approach as well as
alternatives. ¶ 1122.
- Competitive Process Where the Incumbent Declines the
State-Level CAF Commitment
- Under the Order, ILECs will be offered the option of making a
state-level commitment to provide broadband to high-cost areas in
exchange for additional funding. Where incumbents decline, a
competitive bidding process will be used. The FNPRM seeks comment
on the proposed rules for a reverse auction-style bidding process.
¶ 1189.
- The FCC seeks comment on what approaches could be used to
define areas to be used in the bidding process, minimum
geographical unit, prioritization of areas, and public interest
obligation performance. ¶ 1191.
- The FCC further seeks comment on proposals regarding
eligibility requirements including ETC designations, certification
of financial and technical capability, and eligibility of carriers
declining state-level commitments covering the area. ¶
1198-1201.
- The FCC seeks comment on what approaches could be used to
define areas to be used in the bidding process, minimum
geographical unit, prioritization of areas, and public interest
obligation performance. ¶ 1191.
- Under the Order, ILECs will be offered the option of making a
state-level commitment to provide broadband to high-cost areas in
exchange for additional funding. Where incumbents decline, a
competitive bidding process will be used. The FNPRM seeks comment
on the proposed rules for a reverse auction-style bidding process.
¶ 1189.
- Remote Areas Fund
- The Order establishes a Remote Areas Fund to assist Americans
living in remote areas in obtaining affordable broadband. The FCC
seeks comment on how to implement the RAF. ¶ 1223.
- The FCC proposes the fund be structured as a portable consumer
subsidy and seeks comment on this proposal and alternative
structures. ¶ 1225.
- How should the Commission identify areas eligible for the RAF
while the proposed forward-looking cost model is unavailable?
¶ 1230.
- What broadband public interest obligations are appropriate and
what standards and measurements should be used? ¶ 1240.
- With respect to pricing obligations, the FCC proposes applying
standards from the CAF order to RAF reasonably comparable rates and
seeks comment on this proposal, as well as its subsidy pass
through, price guarantee, and consumer flexibility proposals.
¶ 1246.
- What broadband public interest obligations are appropriate and
what standards and measurements should be used? ¶ 1240.
- How should the Commission identify areas eligible for the RAF
while the proposed forward-looking cost model is unavailable?
¶ 1230.
- The portable consumer subsidy proposal lists subscriber
qualifications such as remoteness, one subsidy per household,
limiting support to new subscribers and a means test. Further,
should a community anchor institution and small business
eligibility test be used? The FCC seeks comment on these proposals.
¶ 1255
- How should the amount of the voice and broadband subsidies be
determined, with respect to monthly payments, installation fees,
and satellite service limitations? ¶ 1264-1272.
- The FCC seeks comment on alternative auction approaches
including per-subscribed location auctions, coverage auctions, and
combined auctions. Additionally, are the rules established for the
Mobility Fund Phase I, potential small business preference rules,
and process for application, auction, and pos-auction appropriate?
¶ 1276-1288.
- How should the amount of the voice and broadband subsidies be
determined, with respect to monthly payments, installation fees,
and satellite service limitations? ¶ 1264-1272.
- The FCC proposes the fund be structured as a portable consumer
subsidy and seeks comment on this proposal and alternative
structures. ¶ 1225.
- The Order establishes a Remote Areas Fund to assist Americans
living in remote areas in obtaining affordable broadband. The FCC
seeks comment on how to implement the RAF. ¶ 1223.
INTERCARRIER COMPENSATION REFORM
The Order provides for the transition for all types of traffic to a bill-and-keep regime over a period of six to nine years, as well as a mechanism to offset the resulting revenue losses for incumbents. The Order also establishes a set of rules to reduce access stimulation by requiring access stimulating LECs to set their interstate access rates no higher than the lowest interstate access rate of any incumbent LEC in the state. In addition, the Commission determined on a prospective basis that "toll" VoIP traffic will be compensable as interstate access traffic and that "local" VoIP traffic will be subject to reciprocal compensation. The Commission also clarified some rules relating to compensation for wireless traffic, and adopted a new set of rules to reduce phantom traffic.
Rules to Reduce Access Stimulation
- Access stimulating LECs realize significant revenue increases
and thus inflated profits that almost uniformly make their
interstate switched access rates unjust and unreasonable. ¶
662.
- While access stimulation may provide benefits for those in
tribal lands, how access revenues are used is not relevant in
determining whether switched access rates are just and reasonable
in accordance with section 201(b). ¶ 666.
- An "access stimulating LEC" must refile its
interstate access tariffs when: (¶ 667)
- the LEC has entered into an "access revenue sharing
agreement;" and either
- the LEC has had a three-to-one interstate
terminating-to-originating traffic ratio in a calendar month;
or
- has had a greater than 100 percent increase in interstate
originating and/or terminating switched access MOU in a month
compared to the same month in the preceding year.
- An "access sharing revenue agreement" is defined in
the Order as one where a rate-of-return LEC or CLEC "has an
access revenue sharing agreement, whether express, implied, written
or oral, that, over the course of the agreement, would directly or
indirectly result in a net payment to the other party (including
affiliates) to the agreement, in which payment by the
rate-of-return LEC or competitive LEC is based on the billing or
collection of access charges from interexchange carriers or
wireless carriers." ¶ 669
- An "access sharing revenue agreement" is defined in
the Order as one where a rate-of-return LEC or CLEC "has an
access revenue sharing agreement, whether express, implied, written
or oral, that, over the course of the agreement, would directly or
indirectly result in a net payment to the other party (including
affiliates) to the agreement, in which payment by the
rate-of-return LEC or competitive LEC is based on the billing or
collection of access charges from interexchange carriers or
wireless carriers." ¶ 669
- the LEC has entered into an "access revenue sharing
agreement;" and either
- An "access stimulating LEC" must refile its
interstate access tariffs when: (¶ 667)
- If a LEC is determined to be engaged in access stimulation,
with 45 days: (¶ 679)
- a rate-of-return LEC must file its own cost-based tariff under
section 61.38 of the Commission's rules and may not file based
on historical costs under section 61.39 of the Commission's
rules or participate in the NECA traffic-sensitive tariff;
- a CLEC must benchmark its tariffed access rates to the rates of
the price cap LEC with the lowest interstate switched access rates
in the state.
- a rate-of-return LEC must file its own cost-based tariff under
section 61.38 of the Commission's rules and may not file based
on historical costs under section 61.39 of the Commission's
rules or participate in the NECA traffic-sensitive tariff;
- Once a rate-of-return LEC or a competitive LEC has met both
conditions of the definition and has filed revised tariffs it may
not file new tariffs at rates other than those required by the
revised pricing rules until it terminates its revenue sharing
agreement(s), even if the LEC no longer meets the 3:1
terminating-to-originating traffic ratio condition of the
definition or traffic growth threshold. ¶ 679.
- Carriers filing complaints may rely on the 3:1
terminating-to-originating traffic ratio and/or the traffic growth
factor for the traffic it exchanges with the LEC as the basis for
filing a complaint. ¶ 699.
- This will create a rebuttable presumption that revenue sharing
is occurring and the LEC has violated the Commission's rules.
The LEC then would have the burden of showing that it does not meet
both conditions of the definition.
- This will create a rebuttable presumption that revenue sharing
is occurring and the LEC has violated the Commission's rules.
The LEC then would have the burden of showing that it does not meet
both conditions of the definition.
Rules to Reduce Phantom Traffic
- The revised calling signaling rules will encompass both
interstate and intrastate traffic. ¶ 710.
- All traffic originating or terminating on the PSTN and traffic
transmitted using Internet protocols must include the CPN
associated with the call. ¶ 711.
- CN must be passed unaltered where it is different from the CPN.
The CN field may only be used to contain a calling party's
charge number, and that it may not contain or be populated with a
number associated with an intermediate switch, platform, or
gateway, or other number that designates anything other than a
calling party's charge number. ¶ 714.
- Service providers using MF signaling must pass the number of
the calling party (or CN, if different) in the MF ANI field. ¶
716.
- All traffic originating or terminating on the PSTN and traffic
transmitted using Internet protocols must include the CPN
associated with the call. ¶ 711.
- The revised call signaling rules also apply to interconnected
VoIP traffic. VoIP service providers will be required to transmit
the telephone number of the calling party for all traffic destined
for the PSTN that they originate. If they are intermediate
providers in a call path, VoIP providers must pass, unaltered,
signaling information they receive indicating the telephone number,
or billing number if different, of the calling party. ¶
717.
- Service providers are prohibited from stripping or altering
call information, and are required to pass the calling party's
telephone number (or, if different, the financially responsible
party's number), unaltered, to subsequent carriers in the call
path. ¶ 719.
- The Commission declined to extend phantom traffic and
call-signaling rules to include JIP, CIC, or OCN information.
¶¶ 725-28.
- The Commission declined to extend phantom traffic and
call-signaling rules to include JIP, CIC, or OCN information.
¶¶ 725-28.
- The FCC declined to adopt new methods of enforcing rules
against phantom traffic. ¶¶ 730-735.
Transition to a Bill-and-Keep Regime
- The FCC adopted bill-an-keep as the "end state or all
traffic" because it best "advances the Commission's
policy goals and the public interest, driving greater efficiency in
the operation of telecommunications networks and promoting the
deployment of IP-based networks." ¶¶ 740-759.
- The FCC's statutory authority to implement bill-and-keep as
the default framework for the exchange of traffic with LECs flows
directly from sections 251(b)(5) and 201(b) of the Act. ¶
760.
- The transition rules apply only with respect to terminating
access. The FCC seeks comment in the FNPRM on the ultimate
transition away from such charges as part of the transition of all
access charge rates to bill-and-keep. ¶ 777.
- With respect to wireless traffic exchanged with a LEC, the
Commission has independent authority under section 332 of the Act
to establish a default bill-and-keep methodology that will apply in
the absence of an interconnection agreement. ¶ 779. T
- The Commission adopted the following schedule for the
transition to bill-and-keep (¶ 801):
Intercarrier Compensation Reform Timeline |
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Effective Date | For Price Cap Carriers and CLECs that benchmark access rates to price cap carriers | For Rate-of-Return Carriers and CLECs that benchmark access rates to rate-of-return carriers |
Effective Date of the rules | All intercarrier switched access rate elements, including interstate and intrastate originating and terminating rates and reciprocal compensation rates are capped. | All interstate switched access rate elements, including all originating and terminating rates and reciprocal compensation rates are capped. Intrastate terminating rates are also capped. |
July 1, 2012 | Intrastate terminating switched end office and transport rates, originating and terminating dedicated transport, and reciprocal compensation rates, if above the carrier's interstate access rate, are reduced by 50 percent of the differential between the rate and the carrier's interstate access rate. | Intrastate terminating switched end office and transport rates, originating and terminating dedicated transport, and reciprocal compensation rates, if above the carrier's interstate access rate, are reduced by 50 percent of the differential between the rate and the carrier's interstate access rate. |
July 1, 2013 | Intrastate terminating switched end office and transport rates and reciprocal compensation, if above the carrier's interstate access rate, are reduced to parity with interstate access rate. | Intrastate terminating switched end office and transport rates and reciprocal compensation, if above the carrier's interstate access rate, are reduced to parity with interstate access rate. |
July 1, 2014 | Terminating switched end office and reciprocal compensation rates are reduced by one-third of the differential between end office rates and $0.0007. Transport rates remain unchanged from the previous step. | Terminating switched end office and reciprocal compensation rates are reduced by one-third of the differential between end office rates and $0.005. Transport rates remain unchanged from the previous step. |
July 1, 2015 | Terminating switched end office and reciprocal compensation rates are reduced by an additional one-third of the original differential to $0.0007. Transport rates remain unchanged from the previous step. | Terminating switched end office and reciprocal compensation rates are reduced by an additional one-third of the original differential to $0.005. Transport rates remain unchanged from the previous step. |
July 1, 2016 | Terminating switched end office and reciprocal compensation rates are reduced to $0.0007. Transport rates remain unchanged from the previous step. | Terminating switched end office and reciprocal compensation rates are reduced to $0.005. Transport rates remain unchanged from the previous step. |
July 1, 2017 | Terminating switched end office and reciprocal compensation rates are reduced to bill-and-keep. Terminating switched end office and transport are reduced to $0.0007 for all terminating traffic within the tandem serving area when the terminating carrier owns the serving tandem switch. | Terminating end office and reciprocal compensation rates are reduced by one-third of the differential between its end office rates ($0.005) and $0.0007. Transport rates remain unchanged from the previous step. |
July 1, 2018 | Terminating switched end office and transport are reduced to bill-and-keep for all terminating traffic within the tandem serving area when the terminating carrier owns the serving tandem switch. | Terminating switched end office and reciprocal compensation rates are reduced by an additional one-third of the differential between its end office rates as of July 1, 2016 and $0.0007. Transport rates remain unchanged from the previous step. |
July 1, 2019 | Terminating switched end office and reciprocal compensation rates are reduced to $0.0007. Transport rates remain unchanged from the previous step. | |
July 1, 2020 | Terminating switched end office and reciprocal compensation rates are reduced to bill-and-keep. Transport rates remain unchanged from the previous step. |
- Since intercarrier compensation charges are constrained by the
transition glide path adopted in the Order, the FCC will be
monitoring to ensure that carriers do not shift costs to other rate
elements that are not specifically covered, such as special access
or common line. ¶ 804
- CMRS providers will be subject to the transition applicable to
price cap carriers. Although CMRS providers are subject to
mandatory detariffing, these providers are included to the extent
their reciprocal compensation rates are inconsistent with the
reforms adopted in the Order. ¶ 806
- The Order retains the CLEC benchmark rule during the
transition. Competitive LECs have 15 days from the effective date
of a newly incumbent LEC tariff upon which they benchmark to make
their own corresponding filing(s). ¶ 807
Implementation Issues
- LECs will continue to tariff default charges for intrastate
toll traffic at the state level, and for interstate toll traffic
with the Commission, in accordance with the timetable and rate
reductions set forth above. ¶ 812
- Carriers remain free to enter into negotiated agreements that
differ from the default rates established in the Order, consistent
with the negotiated agreement framework that Congress envisioned
for the 251(b)(5) regime to which access traffic is
transitioned.
- During the transition, traffic that historically has been
addressed through interconnection agreements will continue to be so
addressed.
- Carriers remain free to enter into negotiated agreements that
differ from the default rates established in the Order, consistent
with the negotiated agreement framework that Congress envisioned
for the 251(b)(5) regime to which access traffic is
transitioned.
- To ensure compliance with the framework and to ensure carriers
are not taking actions that could enable a windfall and/or double
recovery, state commissions should monitor compliance with our rate
transition; review how carriers reduce rates to ensure consistency
with the uniform framework; and guard against attempts to raise
capped intercarrier compensation rates, as well as unanticipated
types of gamesmanship. ¶ 813.
- The reforms in the Order do not abrogate existing commercial
contracts or interconnection agreements or otherwise require an
automatic "fresh look" at these agreements. ¶
815.
Other Rate Elements
- Originating charges for all telecommunications traffic subject
to the comprehensive intercarrier compensation framework should
ultimately move to bill-and-keep. ¶¶ 817-18.
- All interstate originating access charges and intrastate
originating access charges for price cap carriers are capped at
levels effect as the effective date of the rules.
- This prohibition on increasing access rates also applies to any
remaining Primary Interexchange Carrier Charge in section 69.153 of
the Commission's rules, the per-minute Carrier Common Line
charge in section 69.154 of the Commission's rules, and the
per-minute Residual Interconnection Charge in section 69.155 of the
Commission's rules.
- Price cap carriers and CLECs that benchmark to price cap rates
are also prohibited from increasing their originating intrastate
access rates.
- This prohibition on increasing access rates also applies to any
remaining Primary Interexchange Carrier Charge in section 69.153 of
the Commission's rules, the per-minute Carrier Common Line
charge in section 69.154 of the Commission's rules, and the
per-minute Residual Interconnection Charge in section 69.155 of the
Commission's rules.
- Carriers are prohibited from increasing their originating
interstate access rates above those in effect as the effective date
of the rules.
- All interstate originating access charges and intrastate
originating access charges for price cap carriers are capped at
levels effect as the effective date of the rules.
- For price cap carriers, in the final year of the transition,
transport and terminating switched access shall go to bill-and-keep
levels where the terminating carrier owns the tandem. However,
transport charges in other instances, i.e., where the terminating
carrier does not own the tandem, are not addressed in this Order.
¶ 819.
- The Commission recognizes that the continuation of transport
charges in perpetuity would be problematic. ¶ 820.
ICC Reform Recovery Mechanism – Carriers Eligible to Participate
The Order establishes an "access replacement" fund for ILECs that will allow recovery of costs associated with lost access revenues. All incumbent LECs are eligible to participate because regulatory constraints on their pricing and service requirements otherwise limit their ability to recover their costs. ¶ 862. Notably, however:
- The FCC declined to provide an explicit recovery mechanism for
competitive LECs because (¶ 864):
- their end-user charges are not subject to comparable rate
regulation and therefore those carriers are free to recover reduced
access revenue through regular end-user charges; and
- competitive LECs typically have not built out their networks
subject to COLR obligation, and thus typically can elect whether to
enter a service area and/or to serve particular classes of
customers depending upon whether it is profitable to do so without
subsidy.
- their end-user charges are not subject to comparable rate
regulation and therefore those carriers are free to recover reduced
access revenue through regular end-user charges; and
- The FCC declined to permit competitive LECs to reduce their
access rates over a longer period of time than incumbent LECs,
because deviating from that framework for purposes of the access
reform transition would create new opportunities for arbitrage and
require increased regulatory oversight. ¶ 866.
ICC Reform Recovery Mechanism –Calculating Eligible Recovery for ILECs
- Price cap incumbent LECs' Baseline for recovery will be 90%
of their Fiscal Year 2011 interstate and intrastate access revenues
for the rates subject to reform and net reciprocal compensation
revenues. ¶ 851.
- For price cap carriers' study areas that participated in
the Commission's 2000 CALLS reforms, and thus have had
interstate access rates essentially frozen for almost a decade,
Price Cap Eligible Recovery (i.e., revenues subject to our recovery
mechanism) will be the difference between: (a) the Price Cap
Baseline, subject to 10 percent annual reductions; and (b) the
revenues from the reformed intercarrier compensation rates in that
year, based on estimated MOUs multiplied by the associated default
rate for that year.
- For carriers that have more recently converted to price cap
regulation and did not participate in the CALLS plan, the
reductions will be phased in after five years, so that the initial
10 percent reduction occurs in year six.
- Estimated MOUs will be calculated as FY2011 minutes for all
price cap carriers, and will be reduced 10 percent annually for
each year of reform to reflect MOU trends over the past several
years.
- For price cap carriers' study areas that participated in
the Commission's 2000 CALLS reforms, and thus have had
interstate access rates essentially frozen for almost a decade,
Price Cap Eligible Recovery (i.e., revenues subject to our recovery
mechanism) will be the difference between: (a) the Price Cap
Baseline, subject to 10 percent annual reductions; and (b) the
revenues from the reformed intercarrier compensation rates in that
year, based on estimated MOUs multiplied by the associated default
rate for that year.
- Rate-of-return incumbent LECs' Baseline for recovery will
be based on their 2011 interstate switched access revenue
requirement, plus FY2011 intrastate terminating switched access
revenues and FY2011 net reciprocal compensation revenue. ¶
851.
- Rate-of-Return Eligible Recovery will be the difference
between: (a) the Rate-of-Return Baseline, subject to five percent
annual reductions; and (b) the revenues from the reformed
intercarrier compensation rates in that year, based on actual MOUs
multiplied by the associated default rate for that year.
- Rate-of-Return Eligible Recovery will be the difference
between: (a) the Rate-of-Return Baseline, subject to five percent
annual reductions; and (b) the revenues from the reformed
intercarrier compensation rates in that year, based on actual MOUs
multiplied by the associated default rate for that year.
- Incumbent LECs are permitted to recover a limited portion of
their Eligible Recovery from their end users through a monthly
fixed charge called an ARC. In order to ensure that any ARC
increase on consumers does not impact affordability of rates,
including by limiting the annual increase in consumer ARCs to
$0.50. ¶ 852.
- Incumbent LECs may not charge an ARC on any Lifeline
customers.
- This charge is calculated independently from, and has no
bearing on, existing SLCs, although for administrative and billing
efficiencies carriers are permitted to combine the charges as a
single line item on a bill.
- To protect consumers the FCC adopted a Residential Rate Ceiling
that prohibits imposing an ARC on any consumer paying an inclusive
local monthly phone rate of $30 or more.
- LECs may not charge an a multi-line business ARC where the SLC
plus ARC would exceed $12.20 per line.
- To recover Eligible Recovery, price cap incumbent LECs are
permitted to implement monthly end user ARCs with five annual
increases of no more than $0.50 for residential/single-line
business consumers, for a total monthly ARC of no more than $2.50
in the fifth year; and $1.00 (per month) per line for multi-line
business customers, for a total of $5.00 per line in the fifth
year, provided that:
- any such residential increases would not result in regulated
residential end-user rates that exceed the $30 Residential Rate
Ceiling; and
- any multi-line business customer's total SLC plus ARC does
not exceed $12.20.
- any such residential increases would not result in regulated
residential end-user rates that exceed the $30 Residential Rate
Ceiling; and
- To recover Eligible Recovery, rate-of-return incumbent LECs are
permitted to implement monthly end user ARCs with six annual
increases of no more than $0.50 (per month) for
residential/single-line business consumers, for a total ARC of no
more than $3.00 in the sixth year; and $1.00 (per month) per line
for multi-line business customers for a total of $6.00 per line in
the sixth year, provided that:
- such increases would not result in regulated residential
end-user rates that exceed the $30 Residential Rate Ceiling;
and
- any multi-line business customer's total SLC plus ARC does
not exceed $12.20.
- such increases would not result in regulated residential
end-user rates that exceed the $30 Residential Rate Ceiling;
and
- Competitive LECs, which are not subject to the Commission's
end-user rate regulations today, may recover reduced intercarrier
revenues through end-user charges.
- Incumbent LECs may not charge an ARC on any Lifeline
customers.
- Recovery from the CAF for incumbent LECs will be provided to
the extent their Eligible Recovery exceeds their permitted ARCs.
¶ 853.
- For price cap carriers that elect to receive CAF support, such
support is transitional, phasing out over three years beginning in
2017.
- For rate-of-return carriers, ICC-replacement CAF support will
phase down as Eligible Recovery decreases over time, but will not
be subject to other reductions.
- CAF recovery will require both price cap and rate-of-return
carriers to comply with the broadband obligations discussed
above.
- For price cap carriers that elect to receive CAF support, such
support is transitional, phasing out over three years beginning in
2017.
- Competitive LECs, which have greater freedom in setting rates
and determining which customers they wish to serve, will not be
eligible for CAF support to replace reductions in ICC revenues.
¶ 853.
- A carrier can petition for a Total Cost and Earning Review to
request additional CAF ICC support and/or waiver of CAF ICC support
broadband obligations. In analyzing such petitions, the FCC will
consider the totality of the circumstances, to the extent permitted
by law. ¶ 925.
Intercarrier Compensation for VoIP Traffic
- The Order adopts a prospective intercarrier compensation
framework that brings all VoIP-PSTN traffic within the section
251(b)(5) framework. ¶¶ 943-44.
- Default charges for "toll" VoIP-PSTN traffic will be
equal to interstate access rates applicable to non-VoIP traffic,
both in terms of the rate level and rate structure;
- Default charges for other VoIP-PSTN traffic will be the
otherwise-applicable reciprocal compensation rates; and
- LECs are permitted to tariff these default charges for toll
VoIP-PSTN traffic in relevant federal and state tariffs in the
absence of an agreement for different intercarrier
compensation.
- Default charges for "toll" VoIP-PSTN traffic will be
equal to interstate access rates applicable to non-VoIP traffic,
both in terms of the rate level and rate structure;
- The determination applies only prospectively, and is subject to
the reductions in rates required in the Order. ¶ 945.
- LECs are permitted to tariff reciprocal compensation charges
for toll VoIP-PSTN traffic equal to the level of interstate access
rates. ¶ 961.
- LECs are permitted to charge the relevant intercarrier
compensation for functions performed by it and/or by its retail
VoIP partner, regardless of whether the functions performed or the
technology used correspond precisely to those used under a
traditional TDM architecture. ¶ 970.
- A carrier that otherwise has a section 251(c)(2)
interconnection arrangement with an incumbent LEC is free to
deliver toll VoIP-PSTN traffic through that arrangement, consistent
with the provisions of its interconnection agreement. ¶
972.
- A carriers' blocking of VoIP or vice versa calls is a
violation of the Communications Act and, therefore, is prohibited
just as with the blocking of other traffic. ¶¶
973-974.
Intercarrier Compensation for Wireless Traffic
- The scope of compensation obligations under section 20.11 which
governs competitive LEC-CMRS compensation arrangements are
coextensive with the scope of the reciprocal compensation
requirements under section 251 of the Act. ¶ 988.
- Section 20.11 applies only to LEC-CMRS traffic that, since the
Local Competition First Report and Order, has been subject
to the reciprocal compensation framework under section 251(b)(5) of
the Act.
- Section 20.11 does not apply to access traffic that, prior to
this Order, was subject to section 251(g).
- The terms "mutual compensation" in section 20.11 and
"reciprocal compensation" in section 251(b)(5) and Part
51 are synonymous when applied to non-access LEC-CMRS
traffic.
- Section 20.11 applies only to LEC-CMRS traffic that, since the
Local Competition First Report and Order, has been subject
to the reciprocal compensation framework under section 251(b)(5) of
the Act.
- Bill-and-keep should be the default applicable to LEC-CMRS
reciprocal compensation arrangements under both section 20.11 or
Part 51 and should apply immediately. ¶ 994.
- For non-access traffic exchanged between a rural,
rate-of-return LEC and a CMRS carrier, the rural, rate-of-return
LEC will be responsible for transport to the CMRS provider's
chosen interconnection point when it is located within the
LEC's service area. ¶ 999.
- When the CMRS provider's chosen interconnection point is
located outside the LEC's service area, the LEC's transport
and provisioning obligation stops at its meet point and the CMRS
provider is responsible for the remaining transport to its
interconnection point.
- When the CMRS provider's chosen interconnection point is
located outside the LEC's service area, the LEC's transport
and provisioning obligation stops at its meet point and the CMRS
provider is responsible for the remaining transport to its
interconnection point.
- The scope of compensation obligations under section 20.11 which
govern competitive LEC-CMRS compensation arrangements are
coextensive with the scope of the reciprocal compensation
requirements under section 251 of the Act. ¶ 988.
- The intraMTA rule means that all traffic exchanged between a
LEC and a CMRS provider that originates and terminates within the
same MTA, as determined at the time the call is initiated, is
subject to reciprocal compensation regardless of whether or not the
call is, prior to termination, routed to a point located outside
that MTA or outside the local calling area of the LEC. ¶
1007.
Intercarrier Compensation – FNPRM
- Transitioning Rate Elements to Bill-and-Keep
- The Order begins transition to Bill-and-Keep for certain
terminating access rates, but not all rate elements. The FCC seeks
comment on the proper transition and recovery mechanism for the
remaining rate elements such as origination, transport and
termination, and transit. ¶ 1297.
- For origination rates, the FCC seeks comment on whether an
additional multi-year transition is needed and how to implement a
transition. ¶¶ 1299, 1302.
- For transport and termination rates, the FCC seeks comment on
how to transition for tandem switching and transport charges as
well as how the transition of these charges will be affected by
transitioning to IP networks. ¶¶ 1306, 1310.
- With regard to transit, the Commission has not addressed
whether transit services must be provided pursuant to section 251
of the Act. The FCC seeks comment on whether transit rates should
be regulated to ensure reasonable rates. ¶ 1312.
- For origination rates, the FCC seeks comment on whether an
additional multi-year transition is needed and how to implement a
transition. ¶¶ 1299, 1302.
- The Order begins transition to Bill-and-Keep for certain
terminating access rates, but not all rate elements. The FCC seeks
comment on the proper transition and recovery mechanism for the
remaining rate elements such as origination, transport and
termination, and transit. ¶ 1297.
- Bill-and-Keep Implementation
- The FCC seeks comment on interconnection issues that must be
addressed to implement the bill-and-keep regime established in the
Order. ¶ 1315.
- Currently, ILECs must allow requesting telecommunications
carriers to interconnect at any technically feasible point. Does
the Commission need to prescribe points of interconnection under
bill-and-keep? ¶ 1316.
- The Commission believes that tariffs should continue to be
relied upon until carriers negotiate alternative agreements. Should
the FCC forbear from tariffing requirements under section 203 of
the Act and Part 61 of the Commission Rules to enable negotiation
of alternative arrangements pursuant to the Order? ¶
1322.
- Some commenters have expressed concern that a bill-and-keep
approach promotes arbitrage such as traffic dumping on terminating
carriers' networks. The FCC seeks more detail on arbitrage
concerns, the negative effects of dumping, and what additional
measures may prevent such arbitrage. ¶ 1325.
- Currently, ILECs must allow requesting telecommunications
carriers to interconnect at any technically feasible point. Does
the Commission need to prescribe points of interconnection under
bill-and-keep? ¶ 1316.
- The FCC seeks comment on interconnection issues that must be
addressed to implement the bill-and-keep regime established in the
Order. ¶ 1315.
- Reform of End User Charges and CAF ICC Support
- The Order adopts a transitional recovery mechanism for ILECs.
The FCC seeks comment on the long-term elimination of that
transitional recovery mechanism as well as pre-existing rules on
subscriber line charges, specifically ARC phase-out, CAF ICC
support phase-out, treatment of demand in determining eligible
recover for rate-of-return carriers, the magnitude and long-term
role of SLCs, and advertising SLCs. ¶¶ 1326-1334.
- The Order adopts a transitional recovery mechanism for ILECs.
The FCC seeks comment on the long-term elimination of that
transitional recovery mechanism as well as pre-existing rules on
subscriber line charges, specifically ARC phase-out, CAF ICC
support phase-out, treatment of demand in determining eligible
recover for rate-of-return carriers, the magnitude and long-term
role of SLCs, and advertising SLCs. ¶¶ 1326-1334.
INTERCONNECTION
The FCC clarified that the T-Mobile Order did not impose Section 251(c) obligations on CMRS carriers, but declined to extend the interconnection requirements established in the T-Mobile Order to the relationship between CMRS carriers and competitive LECs. The Commission also made clear that it expected all carriers to negotiate in good faith in response to request for IP-to-IP interconnection for the exchange of VoIP traffic until it completes its rulemaking proceeding on the topic.
Duty to Interconnect
- Sections 201 and 332 of the Act provide a basis for rules
allowing an incumbent LEC to request interconnection, including
associated compensation, from a CMRS provider and invoke the
negotiation and arbitration procedures set forth in section 252 of
the Act. ¶ 834.
- Ancillary authority also supports the T-Mobile Order
requirement that CMRS providers comply with the negotiation and
arbitration procedures set forth in section 252 of the Act because
both incumbent LECs and CMRS providers are telecommunications
carriers, over which the FCC has clear jurisdiction. ¶
837.
- Ancillary authority also supports the T-Mobile Order
requirement that CMRS providers comply with the negotiation and
arbitration procedures set forth in section 252 of the Act because
both incumbent LECs and CMRS providers are telecommunications
carriers, over which the FCC has clear jurisdiction. ¶
837.
- The FCC clarifies that the T-Mobile Order did
not apply Section 251(c) to CMRS carriers. ¶
840.
- The Commission declines to extend the interconnection
requirements in the T-Mobile Order to govern the
relationship between CMRS carriers and competitive LECs. ¶
845-46.
- While the FNPRM is pending, all carriers are required to
negotiate in good faith in response to requests for IP-to-IP
interconnection for the exchange of voice traffic. ¶
1011.
Interconnection – FNPRM
- IP-to-IP Interconnection Issues
- The Order creates requirements to negotiate IP-to-IP
interconnection in good faith. The Commission seeks comment on
implementing the good faith requirement and what sections of the
Act best provide support for the requirement. ¶ 1335.
- The Order creates requirements to negotiate IP-to-IP
interconnection in good faith. The Commission seeks comment on
implementing the good faith requirement and what sections of the
Act best provide support for the requirement. ¶ 1335.
- Scope of Traffic Exchange Covered By an IP-to-IP
Interconnection Policy Framework
- The Order encompasses only IP voice traffic. The FCC seeks
comment on the scope of IP traffic that should be covered by an
IP-to-IP interconnection framework. ¶ 1344.
- Should only voice be covered? What would be the impact on
non-voice IP interconnection? Should only managed or
facilities-based VoIP services be covered? How would "over the
top" VoIP providers be affected? ¶ 1346.
- The Order encompasses only IP voice traffic. The FCC seeks
comment on the scope of IP traffic that should be covered by an
IP-to-IP interconnection framework. ¶ 1344.
- Good Faith Negotiations for IP-to-IP Interconnection
- The FCC seeks comment on the scope and nature of good faith
negotiations requirements adopted by the Order, such as the types
of carriers covered and whether the Commission needs to address
ranges of reasonable IP-to-IP interconnection rates. ¶
1348.
- The Commission seeks comment on statutory authority to require
good faith negotiations, such as sections 251(a)(1), 251(c)(2), 201
or 256 of the Act, 706 of the 1996 Act, or the Commission's
ancillary authority. What implications do such sources of authority
have on the scope and enforcement of good faith negotiation
requirements? ¶¶ 1351-1358, 1380-1398.
- The FCC seeks comment on the scope and nature of good faith
negotiations requirements adopted by the Order, such as the types
of carriers covered and whether the Commission needs to address
ranges of reasonable IP-to-IP interconnection rates. ¶
1348.
- IP-to-IP Interconnection Policy Frameworks
- The FCC seeks comment on the appropriate role of the Commission
in IP-to-IP interconnection.
- What measures should the FCC take to encourage efficient
IP-to-IP interconnection, such as costs of IP-to-TDM conversion?
¶ 1360.
- Should the FCC consider specific mechanisms to require IP-to-IP
interconnection, such as the Commission's role being subject to
certain baseline terms and conditions, POI location involvement, or
providing only a principle with case-by-case enforcement.
¶¶ 1365-1374.
- Should the Commission not regulate commercial agreements? If
so, what incentives for IP-to-IP interconnection would be present?
¶ 1375.
- Should the FCC consider specific mechanisms to require IP-to-IP
interconnection, such as the Commission's role being subject to
certain baseline terms and conditions, POI location involvement, or
providing only a principle with case-by-case enforcement.
¶¶ 1365-1374.
- The FCC seeks comment on the appropriate role of the Commission
in IP-to-IP interconnection.
- Further Call Signaling Rates for VoIP
- The FCC recognizes that the scope of ICC obligations for VoIP
providers is broader than the definition of interconnected VoIP in
the rules. Recognizing potential technical difficulties and
arbitrage opportunities, the FCC seeks comment on the need for
signaling rules for one-way VoIP service providers. ¶
1400.
- The FCC recognizes that the scope of ICC obligations for VoIP
providers is broader than the definition of interconnected VoIP in
the rules. Recognizing potential technical difficulties and
arbitrage opportunities, the FCC seeks comment on the need for
signaling rules for one-way VoIP service providers. ¶
1400.
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