Wireless Carriers Want Questions Answered on ICF Plan

One wireless carrier source said as the “growth engine” for the telecom industry the carriers want to make certain they are part of the debate. “The debate so far has been very wireline,” the source said. “There’s a wireless point of view that’s very important… A lot of pressure is being placed on wireless” to shoulder the costs of intercarrier compensation. The source said FCC staff hoped to get out a further notice on the issue before year-end but Jan. was more likely, based on the latest information from the FCC.

“It is saying that as they're putting together this intercarrier compensation proposal that’s going to deal with the ICF plan it is important that they really ask the questions in a way that recognizes some of the deficiencies of that plan,” said a 2nd carrier source. “That’s what we're laying in the table and hoping that they ask.”

The ex parte filing by the 3 independent wireless carriers depicts 3 potential inconsistencies in the ICF proposal. Under the ICF plan, the carriers observe, the cost of transport for a call between subscribers of 2 nonrural ILECs is imposed on the originating ILEC. But when a call is made from a covered rural telephone company (CRTC) subscriber to a CMRS subscriber the transport cost is borne exclusively by the CMRS provider.

“How is this difference in treatment technologically and competitively neutral?” the carriers ask. “Is this shift in burden consistent with a policy of bill-and-keep? Does it allow incumbent carriers to exploit their monopoly control by imposing their costs on other carriers?”

The carriers also point to inconsistencies in an ICF conclusion that granting CRTCs a terminating rate of $0.0095 per min. is a “very important additional transport revenue stream for CRTCs that need such revenue diversity.” The carriers wonder why the FCC should allow this one exception to a bill and keep system. “How does guaranteeing a continued intercarrier compensation revenue stream exclusively for incumbent rural LECs benefit consumers, facilitate competition or promote efficiency?” the letter asks. “If CRTCs implement the types of efficiencies that have become more available to smaller carriers, such as installing soft switches and VoIP technology, what policy is served by continuing to guarantee them revenue streams based on outmoded technologies?”

The carriers ask if the proposed Transitional Network Recovery Mechanism -- which guarantees rate-of-return recovery to rural LECs but isn’t available to CMRS providers -- is “consistent with technological neutrality and competition?” The carriers also question the logic of a proposal to create new USF programs to guarantee that ILECs don’t lose revenue under the revised regime. “What steps does the ICF propose that will generate greater ILEC efficiencies and curb the growth of USF support for ILECs?” the carriers want to know. “What policy objectives are served by designing an [intercarrier compensation] system to provide revenue guarantees for ILECs but not for any other type of telecommunications carrier?” CTIA previously criticized most reform proposals as good for the companies proposing them but bad for consumers (CD Dec 1 p1).

The National Assn. of State Consumer Advocates also made a recent filing weighing in on intercarrier compensation and laying out its concerns in more detail than it has in the past. NASUCA argued that the FCC should address disparate rates over 5 years, including publishing an FCC target compensation rate annually. NASUCA also argues the policy adopted by the FCC doesn’t have to be a definitive solution and it should respect state jurisdiction and maintain current USF mechanisms.