FORSEE CALLS FOR FCC CLARITY ON VoIP
Sprint Chmn. Gary Forsee called on the FCC to bring “much-needed clarity by promptly ruling that phone-to-phone VoIP should pay access charges.” Speaking at a Sprint investors meeting Wed. in N.Y., he said his company would take a high profile in addressing VoIP issues this year, pushing regulators to eliminate regulatory uncertainty: “Our perspective is to take prudent positions on initiatives such as UNE-P and VoIP to minimize the effect of regulatory mixed messages.” He expressed concern that “regulatory uncertainty” could interfere with the industry’s moving forward: “What this industry needs from regulation is clear, rational rules, especially surrounding VoIP and intercarrier compensation. Right now it’s a mess.”
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
In its recent filings with the FCC, Sprint had indicated: (1) It didn’t support pending petitions of AT&T and Vonage that suggested all telecom services delivered over IP should be exempt from access charges. “We need to quickly get to a system where the compensation a carrier pays for interconnection to another carrier’s network is the same, regardless of whether the call is local or toll, state or interstate, information or communication,” Forsee told investors. Sprint had argued that synchronous voice services that used standard telephone numbers and were offered to the public for a fee should be regulated as telecom services and thus subject to Universal Service Fund contribution, access charges if the calls originated or terminated on the public switched network, 911 and CALEA obligations. It said the level of regulation shouldn’t depend on technology. (2) Intercarrier compensation should be rationalized so a uniform system applied to all traffic. (3) USF funding method should be overhauled. Sprint has indicated that with the current rules providing competitive advantages to companies using VoIP, it would use VoIP on a limited basis and would consider expanding its use if the rules didn’t change.
At the meeting, Sprint Exec. Vp-CFO Bob Dellinger outlined the company’s business outlook for 2004, saying he expected to see wireless business growth offset weaker sales in its traditional long distance business. Sprint said it expected PCS Group revenue growth in the high-single digits in 2004, driven by customer growth and stable average revenue per user. Data services will grow and wholesale services will grow strongly, the company said. It said it expected PCS Group’s adjusted operating income to rise to $1.2-$1.3 billion this year and an adjusted 13-18 cents loss per share, but in 2005 positive earnings of 20-30 cents a share. PCS Group said its capital spending was expected to rise to $2.4 billion, split evenly between improving network capacity and coverage and providing new capabilities. It said it expected the same spending in 2005.
However, Sprint predicted its FON Group revenue would decline at a low to mid single-digit rate this year. In its local telecom division, it said it expected revenue growth associated with bundled services and broadband sales to be offset by a “modest” decline in access lines, while its Global Markets Div. anticipated continued growth in data revenue offset by declines in voice-related revenue from intense competition. The FON Group also expects declines in consumer long distance sales to be partly offset by growing contributions from sales of Sprint Compete Sense, its local service initiative. Sprint said FON’s capital expenditures were expected to be $1.6 billion in 2004, consistent with 2003 levels.
Also, as expected, Sprint announced its 5-year, multibillion dollar customer-service agreement with IBM, which is expected to enable it to improve its customers’ service experience and reduce customer service costs by $550 million the next 3 years.