A proposal by Core Communications to reform intercarrier compensa...

would dramatically increase demands on the universal service fund. Core filed the petition April 27 asking the FCC to refrain from enforcing Sec. 251(g) of the Telecom Act -- in essence replacing access charges with reciprocal compensation payments. Verizon accused Core of trying to “promote its own short-term interest in regulatory arbitrage at the expense of rational, pro-competitive regulation.” USTelecom said intercarrier compensation reform is “urgently” needed but the Core plan isn’t the way to do it. “These issues are complex, inter-related and of vital importance to carriers and customers alike,” said Embarq, a new company formed from Sprint Nextel’s former local exchange operations. Instead of resolving the issues in the ongoing proceeding, “Core proposes an end-around to the process via… a forbearance petition [with] only cursory analysis and assumptions,” Embarq said. The Western Telecom Alliance of rural telephone companies in western states questioned Core’s “flawed reasoning that a flash-cut elimination of access charges constitutes a feasible approach to intercarrier compensation reform.” The alliance took offense at Core’s “baseless factual assumptions” that opposition from rural telephone companies made intercarrier compensation reform difficult. It urged the FCC to quickly deny the petition “so that others will be discouraged from misusing forbearance petitions to attempt to circumvent the industry negotiations and rulemakings necessary to consider and resolve critical and complex matters like intercarrier compensation.” Some of the phone companies were less harsh on a 2nd part of the Core petition seeking forbearance from provisions in Sec. 254(g) that require rate integration and averaging. Rate integration requires carriers to offer the same long distance rates in all states while rate averaging requires similar rates in urban and rural areas. AT&T said it supported the 2nd part of the petition because “rate integration and rate averaging are tools that no longer serve any legitimate purpose.” Qwest said it supported the thinking behind the rate integration part, but forbearance might “sweep too broadly and include rules that remain publicly beneficial.” Instead, the FCC should begin a proceeding to reform rate integration and averaging, completing it within the 12-month clock that the forbearance petition set in motion. The FCC must act on forbearance petitions in 12 months unless it gives itself 3 months more. The petition is automatically granted if the deadline is missed. The comments were filed June 2.