ICF Plan Gets Mixed Reviews from Wireless Sector
Wireless carriers disagree sharply over the possible benefits of the intercarrier compensation proposal filed this week by the Intercarrier Compensation Forum (ICF). The 2 independent wireless carriers that had participated in the talks, Western Wireless and T-Mobile, dropped out in May when negotiations hit a major bump in the road. But 2 of the remaining 9 participants -- Sprint and SBC -- have substantial wireless interests. Officials with both companies told us Thurs. they took those interests into consideration in supporting the ICF proposal.
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“SBC’s participation in ICF took into account all of its corporate interests,” a spokesman said. SBC is, along with BellSouth, the parent of Cingular. BellSouth and Verizon left the ICF in May.
Sprint’s support may be particularly significant since 2nd quarter the company had more wireless than IXC revenue. “We think there are considerable benefits to the wireless industry in the ICF plan,” a spokesman said. “This plan creates a more level playing field for all telecom technologies and, more specifically, it takes away many of the inequities that wireless carriers face under the current access charge regime.”
Gary Epstein, the group’s facilitator, told us Thurs. negotiators tried hard to offer benefits for all segments, including those that had left the table. “The plan was the product of hard negotiations with puts and takes, pluses and minuses for all concerned,” he said. “There were significant benefits and concessions for all individual segments including the wireless carriers. Even when the independent wireless carriers decided not to participate we didn’t change the plan to take away the benefits.”
In the days since ICF proposal details were released (CD Aug 17 p1), Western Wireless has been particularly outspoken. “This proposal does not represent a compromise, but a completely one-sided deal that benefits rural local exchange carriers at the expense of wireless,” said Michele Farquhar, outside counsel to Western Wireless. “At a time when more rural consumers are switching to wireless, this proposal seeks to force wireless carriers to pay into -- but not benefit from -- huge new funds that will keep RLECs whole.”
A T-Mobile spokeswoman said the carrier had no comment beyond its May 19 letter resigning from the ICF. The letter acknowledged T-Mobile saw possible benefits: “Nevertheless, we conclude on balance that a number of provisions are significantly disadvantageous to wireless carriers and subscribers and prevent our support of the plan.”
But other carrier sources said Thurs. parts of the plan would provide wireless carriers significant benefits. One source identified at least 3 aspects attractive for his company. The most significant is that the plan addresses a major area of conflict -- on long distance calls between major trading areas (MTAs) wireless carriers must pay access charges to terminate with a LEC, but they don’t receive access charges when a call terminates on their system. The ICF plan “eliminates that discrepancy. That’s a significant benefit,” one source said.
A 2nd major concession to wireless carriers is elimination of similar discrimination on intra-MTA calls. On an issue that has been the subject of battles in many states, wireless carriers concede they should have to pay cost-based reciprocal compensation but not access charges, which are often much higher. Many rural LECs in particular have assessed them the latter rates. Under FCC rules, calls handled by wireless carriers are considered local calls not subject to charges.
Again, wireless carriers say they often have to fork over money to LECs, but don’t receive money back. “It’s a state-by-state fight that’s going on on a daily basis with no end in sight,” one source said. “This plan eliminates that whole issue.”
A 3rd potential benefit for wireless carriers is clarity on who pays for interconnection facilities between ILECs and wireless carriers. Under the current regime most charges are borne by wireless carriers. Under the ICF plan wireless carriers would split the costs with ILECs, paying 50% of the interstate dedicated switch transport rate, equivalent to the cost of a DS1 line.
Sources conceded Thurs. that, like other aspects of the ICF plan, the parts addressing the financial relationship between ILECs and wireless carriers are complicated. One source said that even with the potential benefits some carriers couldn’t buy into the plan because of provisions designed to appeal to rural carriers. One source said her company found the access recovery fund for rural ILECs especially objectionable because it isn’t capped, doesn’t require a showing of need and wouldn’t sunset.