NARUC Forum Intercarrier Compensation Plan Faces Uphill Fight
A NARUC forum’s intercarrier compensation (ICC) reform proposal is drawing opposition from NASUCA, wireless carriers, CLECs and VoIP providers. NARUC said it wants parties to study the proposal and comment at month’s end, but sources said the latest ICC reform proposal already faces some of the same opposition fatal to earlier bids at compromise.
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A rump group within the forum, representing 11 groups and companies, developed the proposal, which went into circulation last week (CD March 3 p1). The forum was chaired by Ore. Public Utility Comr. Ray Baum. Most of the 11, which include AT&T, BellSouth, Qwest, CenturyTel, Alltel, the Rural Alliance, Cox Cable and NASUCA, are expected to endorse the proposal. But among others Billy Jack Gregg, NASUCA representative in the discussions, fears the subscriber line charge (SLC) is too high, sources said. Gregg couldn’t be reached for comment Tues.
“We're going to have misgivings. It includes huge access charges,” said a VoIP industry source. “It still allows these companies to charge usurious rents.” A 2nd VoIP industry source said the one advantage is that while rates are still high from the sector’s standpoint, VoIP operators at least would face fewer access charges.
A CLEC source termed the latest ICC proposal largely a pact between the Bells and rural carriers, with no CLECs in on it. Wireless carriers, some of whom believe they'd do better with a bill-and-keep regime, are expected to oppose the plan. Several sources said the latest plan seems likely to meet the same demise as 2004’s Intercarrier Compensation Forum plan.
“I'm getting very good feedback from the rural carriers,” said a rural carrier source. “With anything this large and complicated, there are still a few areas where there are some questions. We're working our way through those.” The source added: “Baum asked for all who were participants to the negotiations to get back within 30 days on whether they can support it. The rural LEC community is very actively socializing this within our membership.”
A regulatory attorney questioned whether the FCC would move quickly on a potentially explosive political issue, especially if some subscribers face rate hikes. “I'm not hearing the Commission is really tackling this, though they're making noises,” the source said: “My sense is they would like the carriers to resolve it but they won’t.”
Stifel Nicholaus analyst David Kaut said the plan has one major goal: “To drive down intrastate access charges at least to the levels of interstate access charges.” But Kaut said it remains unclear how much support the plan will get: “While there appears to be substantial backing among the negotiators, it remains unclear whether the industry initiative will receive a critical mass of support… Even the group’s own companies (including senior executives) supposedly still have to digest the details, as do other parties, leaving much uncertainty about whether there will be sufficient industry momentum to spur Commission action, given regulatory inertia and complexities.”
Under the plan small carriers would collect higher access charges than large competitors, but access charges, especially for the Bells, would fall across the board. The SLC collected would rise for all carriers to compensate for lower charges, with smaller carriers collecting the highest per customer.