FCC EYES COMPENSATION REFORM FOR TELECOM CARRIERS
As FCC readies long-anticipated inquiry into unifying carrier compensation methods, telecom industry appears less than united on how -- or even whether -- it should be done. FCC official said at news briefing Mon. that if Commission approved Notice of Inquiry proposed by Common Carrier Bureau, it would open proceeding that probably would take “several years.” Some industry representatives have urged agency to begin proceeding, saying it doesn’t make sense economically to have so many disparate intercarrier compensation methods. But others question value of rationalizing those different plans such as access charges, reciprocal compensation and various forms of wireless interconnection charges.
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ILECs appear to be biggest fans of unifying intercarrier compensation, particularly idea of moving primarily to bill & keep process. However, at conference in Dec. sponsored by Columbia U., other industry representatives and academics questioned whether unification was worth cost. Kenneth Carter, deputy dir. of Columbia Institute for Tele-Information (CITI) told FCC in ex parte letter after conference that some participants expressed concern that “uncertainty and major political angst associated with creating a new regime may act as a disincentive to investment and innovation.”
Much of discussion so far has centered on 2 working papers issued in mid-Dec. by FCC’s Office of Plans & Policy that focus on bill & keep as possible unified compensation method. That in turn has raised concerns about fact that bill & keep probably would shift more interconnection costs to end users, raising possible political problems. Other potential conflicts: (1) State regulators would have to come on board or conflicts would continue. (2) Some small rural telcos rely heavily on access charges and charge high rates. (3) Wireless compensation promises to be hot issue.
FCC official said Commission would look at 2 possible courses of action: (1) Reforming, but retaining, current methods. (2) Replacing current regimes with one process. While there’s “lot of buzz about bill & keep,” that’s not only compensation system agency would investigate through inquiry, she said.
Current situation doesn’t make sense, ILEC representative said. There now are 3 different rates to terminate voice call, he said: Reciprocal compensation for local calls, access charges for long distance terminations, intrastate access charges for terminating in-state long distance calls. “Over time, there’s a certain rationale that says these things have to come together,” he said. “The opportunity for arbitrage is just too great.” With IP telephony on horizon, it makes sense to move from those complex compensation schemes as quickly as possible, ILEC representative said. With packet networks, it’s hard to tell what’s local and what’s long distance, he said. At CITI conference, participants noted that Internet interconnection -- peering -- was yet another disparate payment system.
FCC also is to take up items Thurs. that address interoperability standards for public safety operators to communicate in 700 MHz band. Notice of proposed rulemaking (NPRM) and report and order are expected on operational and technical standards for 24 MHz set aside for public safety operations. About 10% of spectrum in 764-776/794-806 MHz is dedicated to interoperability for public safety users, with rest regarded as general use spectrum. Agency previously reallocated that 24 MHz from Ch. 60-69 broadcasters to public safety, and frequency must be vacated by analog broadcasters in advance of 2006 DTV deadline. Items address recommendations released in Feb. by Public Safety National Coordination Committee (NCC) on operational and technical parameters for public safety use in band. Allocation of 24 MHz marks largest for public safety ever by FCC. Need for greater interoperability between networks of disparate emergency services received increased attention in wake of problems encountered during disasters such as Oklahoma City bombing. NCC report examined issues such as differences in spectrum allocations for emergency agencies scattered in different bands and lack of network integration.
NCC recommendations included employing (1) so-called Project 25 Phase I standard, which uses 12.5 kHz frequency division multiple access (FDMA) and (2) 32 interoperability channels, including 2 nationwide calling channels and 30 tactical channels, FCC official said Mon. NCC report stressed need to focus on transition plan to reach 6.25 kHz FDMA-based channels from 12.5 kHz FDMA standard, official said. In NPRM, Commission will be building record on migration path issue. Item marks agency’s latest step in implementing NCC recommendations. In Aug., FCC issued NPRM seeking comments on NCC report. Scheduled FCC action Thurs. will make decisions based on record created from last NPRM and will advance several areas beyond it, FCC official said.
Migration path standards have been subject of recent flurry of filings at FCC from equipment manufacturers and public safety entities. N. American Tetra Forum (NATF) said in letter to Commission last week it agreed with recommendation for using Project 25 Phase I standard for interoperability channels with one voice channel per 12.5 kHz. But NATF said that should be interim solution because technology now available didn’t meet Commission’s spectrum efficiency goals of using one voice channel per 6.25 kHz. NATF also said it was backing Tetra as possible solution for general use channels in 700 MHz band. Motorola also told FCC last week, in view it said was shared “by nearly all public safety user groups,” that technology using Project 25 Phase 1 standard should be deployed immediately for both interoperability and general use channels. Motorola countered arguments from companies such as Nokia that had asked that 6.25 kHz voice channel equipment be deployed for general use channels at start of licensing.