Party-Line VoIP Symmetry Order Aids IP Transition, Wheeler Says
An FCC order clarifying intercarrier compensation rules for calls originating with VoIP will aid the IP transition by ensuring the transition “is not impeded by outdated technological distinctions,” Chairman Tom Wheeler said in a Wednesday statement. The order, which passed on a party-line vote, settles as expected (see 1410280032) disputes arising from the USF/intercarrier compensation (ICC) order by clarifying retroactively that carriers who partner with VoIP providers are entitled to the same compensation as others when they exchange voice traffic.
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AT&T and Verizon had refused to pay “for certain access elements when they partner with over-the-top VoIP providers,” the order said. The companies had argued that competitive LECs and VoIP providers don't provide either the end-office switching, or the functional equivalent, to be due compensation, under the 2011 USF/ICC transformation order’s voice symmetry rule, the order said. Commissioners Ajit Pai and Mike O’Rielly dissented from Wednesday's order.
The order disagreed with the companies' interpretation of the rule and said it's “technologically neutral.” The rule “does not require, and has never required, an entity to use a specific technology or its own facilities in order for the service it provides to be considered the functional equivalent of end office switching,” the order said.
The order “precludes carriers from advancing self-serving interpretations of this rule in an effort to skew the competitive landscape, today and into the future,” Wheeler’s statement said. The transformation order was intended to “abandon outdated approaches to intercarrier compensation, eliminate competitive distortions, and to encourage the transition to IP-based networks and services,” he said: Technology transitions “will be speeded by technology-neutral rules that promote, preserve, and protect the competitive choices that consumers expect.” The decision will maintain those choices through “symmetrical treatment of like services and additional regulatory certainty for all parties,” Wheeler said.
Pai said the order “alters our rules to mean something they’ve never meant before.” The agency can't create “de facto” a new regulation “under the guise of interpreting a regulation,” and without first seeking comment, Pai said.
O’Rielly said in a statement that the order “would unfairly penalize certain carriers for reasonably relying on what appeared to be well-settled: that carriers do not owe end office switching charges to other providers that do not actually perform the functional equivalent of end office switching.” Despite the agency’s assertion the order would aid the transition, letting ILECs and VoIP providers “pocket” the charges “does nothing to guarantee that they will use it to deploy IP networks. But it does promote artificial competition, marketplace distortions, and arbitrage,” O’Rielly said.
The order is part of a “disturbing trend,” in which the commission “tries to bring new technologies, services or applications within the scope of existing statutory provisions and rules by ignoring or minimizing inconvenient history and precedent,” O’Rielly said. He said he worried about the “unintended consequences and possible long-term burdens that could flow from such flawed decisions.”
An AT&T spokesman said the company is reviewing the order and pointed to a Nov. 20 blog post by Vice President-Federal Regulatory Hank Hultquist. That executive pointed to what he said was the commission’s changing perspectives on the issue, and in the context of the net neutrality debate, said it was “a cautionary tale about the absence of regulatory certainty in the world of Title II regulation.” The order "embraces the fact that consumers benefit from a fair regulatory landscape which encourages competition by firmly rejecting the calls to reward yesterday’s network technologies with discriminatory benefits,” Bandwidth President John Murdock said in a statement to us. Verizon didn't comment. Level 3, which like Bandwidth lobbied the agency for the clarification, also didn't comment.
The order said conflicts over the VoIP symmetry rule “are hindering IP-to-IP interconnection negotiations.” The order said it's consistent with the VoIP symmetry rule’s goal to provide similar intercarrier compensation rights for “competitive LECs partnering with VoIP providers” as for others, “and specifically where new and different technologies are used.” The order said it supports the goals of last year’s IP transition order by embracing “'modernized communications networks’ that can “dramatically reduce network costs” while ensuring core commission goals remain, including “‘ubiquitous and affordable access’ and competition.” The clarification also will “benefit consumers by broadening the number of innovative IP-based service offerings,” the order said, and prevent intercarrier compensation disputes that “divert critical carrier resources.”