Cable VoIP Gets Interconnection Rights with FCC Order
Cable operators got some clarity on VoIP interconnection rules from an FCC order saying incumbent LECs must give them interconnection rights and exchange traffic with cable systems. The Wireline Bureau order approved a Time Warner Cable (TWC) request seeking interconnection rights for certain types of phone calls. The order came after cable operators had argued before the Commission for such rights, and exactly a year after TWC complained to the agency about a S.C. PSC denial of a certificate it said it needed for interconnection agreements to sell VoIP (CD March 6 p12).
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!
FCC Chmn. Martin said the bureau’s decision will spur broadband competition, and compared it to the video franchising order. “We recently acted to increase competition and give consumers more choice among providers of TV programming,” said Martin in separate comments Thurs.: “Similarly, today, we help ensure that there is meaningful competition in local telephone service… By increasing competition in the telephone sector, this action encourages the deployment of broadband facilities.”
The Telecom Act doesn’t differentiate between retail and wholesale providers of some VoIP services, said the order. “State commission decisions denying wholesale telecommunications service providers the right to interconnect with incumbent LECs” are inconsistent with the Act, it said, “and Commission precedent and would frustrate the deployment of competition and broadband deployment.”
Cable cheered the order, while NTCA said its members will consider challenging it. The action “limits the ability of both competitors and states to inhibit the deployment of cable’s VoIP services,” NCTA Pres. Kyle McSlarrow said in a prepared remarks: “This order sends a strong statement.” TWC said the order lets it sell VoIP in areas where state regulators restricted interconnection rights. The S.C. PSC “and its staff are reviewing the decision, and do not have any comment,” said a spokesman.
The order gives cable operators the right to connect VoIP calls from their networks to LECs so they can access the public switched telephone network, said Medley Global Advisors analyst Jessica Zufolo: “It clarifies the interconnection playbook for cable VoIP.” That’s a significant victory for the industry, and may hurt rural LECs that faced less competition because of the lack of interconnection rights in some states, she added: “It puts them in a tighter situation because of their revenues,” which are under pressure from cable VoIP.
The bureau’s order is piecemeal regulation and gives VoIP providers a clear competitive advantage, NTCA Vp-Legal & Industry Div. Daniel Mitchell told us: “You have VoIP providers that are terminating their traffic on ILEC networks, imposing costs on those networks, and they're not paying for those costs. That is not leveling the playing field. That gives them a competitive advantage.” NTCA will meet with rural ILECs affected by the order and they likely will ask the full Commission to review the decision, he added.
The order is premature because there are 3 pending rulemakings with a bearing on it, said Mitchell. Action on intercarrier compensation, IP enabled services classification and USF should be completed before or with such an order, he said. USTelecom also asked the FCC to address intercarrier compensation. “This order increases the urgency for the Commission to clarify that VoIP carriers must pay the appropriate access charges when they exchange traffic with the public switched network,” said a spokeswoman. NTCA’s Mitchell argued the FCC order isn’t fair, saying: “You've created an inequitable playing field going forward that’s in favor of the Time Warners of the world that are providing VoIP service.” Telcos were the ones blocking competition, a cable official said: “States and competitors had tried to block cable from interconnecting, which obviously is required to make the service work.”