An AT&T petition seeking exemption of phone-to-phone IP telephony...

and aide Jessica Rosenworcel preceding the filing, the National Exchange Carrier Assn. (NECA), joined by Alltel, Independent Telephone & Telecom Alliance (ITTA), NTCA, OPASTCO and USTA urged the Commission to act quickly and dismiss the AT&T petition: “Continued FCC inaction only invites more ‘free riders’ and exposes rural consumers to unnecessary risk.” They warned the Commission that rural telephone consumers were particularly at risk because: (1) Access charges accounted for more than $2 billion in small company revenue. (2) Access revenue represented 70% of small telco revenue. (3) An access charge exemption of long distance companies’ phone-to-phone IP telephony services “could threaten the financial viability of small rural LECs and could affect consumers and impair customer service efforts by forcing rural LECs to delay network upgrades.” (4) Such an exemption could release long distance carriers from contributing to the Universal Service Fund (USF), which would “greatly threaten the viability of the fund and the provision of universal telephone service to rural consumers.” The associations also argued that AT&T’s use of IP technology to carry a call did “not equal ‘net protocol’ conversion. Calls originate as TDM and end as TDM -- nothing new here.” It also didn’t reduce LECs’ costs of originating or terminating calls, they said. The associations warned that AT&T’s request for “preferential treatment that favors a specific technology” was “an attempt at regulatory arbitrage.” They urged the Commission to treat phone-to- phone IP calls as traditional long distance when addressing the application of interstate access charges. “Reciprocal compensation payments are no substitute for access charges,” they said, and those arguing that continued application of access charges to AT&T would impair Internet growth “offer no evidence to support their claims.” If the AT&T petition is granted, the associations said, all carriers that had to pay access charges would use IP telephony, “gutting the access charge system and leaving SLCs and USF to make up the difference.” They urged the Commission to dismiss the petition “promptly on procedural grounds… Since AT&T is not claiming that it is an ISP, the relief it requests cannot be granted via declaratory ruling.” Meanwhile, AT&T continued to push the FCC to exempt the company from paying access charges when providing its phone-to-phone VoIP services. In ex parte meetings and in telephone conversations with FCC top staffers last week, AT&T said issues related to universal service and access charge contribution affected by the intersection of IP technology with the Public Switched Telephone Network (PSTN) would be “better addressed holistically in an intercarrier compensation reform proceeding that eliminated the access charge regime entirely rather than begin the process of importing the competition- distorting access charge regime into this new technology.”