NTCA Sees Hidden Danger in Martin Intercarrier Comp Order

The “hidden” rule exempts all interconnected VoIP traffic from paying access charges, Mitchell said, citing unnamed FCC officials. If the FCC adopts the order, AT&T and Verizon are likely to “flash cut” all their switched voice lines to IP, thereby avoiding access charges, he said. AT&T and Verizon could change switched lines to VoIP in “a day,” Mitchell said, calling the process a “simple reclassification.” NTCA has already been on the eighth floor conveying the issue to commissioner aides, he said. An FCC spokesman declined to comment.

AT&T can’t just “flip a switch” and convert all its switched lines to VoIP, countered Hank Hultquist, AT&T vice president, in an interview Thursday. And AT&T isn’t aware of anything in the draft that exempts interconnected VoIP from paying access charges, he said. Regardless, Mitchell’s logic is backwards, he said. AT&T would be more encouraged to move customers to VoIP if the FCC failed to adopt a comprehensive revamp, he said. AT&T has never advocated a blanket exemption for interconnected VoIP, but has asked the FCC to clarify VoIP’s treatment, he said. Without clarity, AT&T will probably “take actions to level the playing field.” These actions may include moving customers to VoIP and routing traffic in ways that reduce costs, he said. Verizon declined to comment.

NTCA is one of several groups calling on the FCC to seek comment on its overhaul proposal. The National Association of Regulatory Utility Commissioners, the Independent Telephone & Telecommunications Alliance and multiple competitive local exchange carriers have also urged industry input on the plan, which industry officials say only the eighth floor has seen.

The FCC should adopt comprehensive reform now, AT&T said in a Thursday letter to the FCC. The carrier said the order under consideration “will provide enormous benefits, not only to the industry, but to consumers.” The draft won’t “resolve every issue,” it said, but “by all accounts it takes the critical initial steps that must be taken to fix what virtually everyone concedes is an irrational and unsustainable set of rules, and it provides a solid cornerstone upon which the Commission, the industry, and state regulators can build.”

“This is not the time for short-sighted parochial concerns,” AT&T said. AT&T “stands to lose significant revenue as a result of this order,” including “most of its [competitive eligible telecom carrier] support and substantial access revenues,” the carrier said. Longterm, however, the order will ease the transition to IP technology, it said.

Though AT&T largely supports the draft, the carrier urged a shorter transition. The order as proposed establishes a ten-year transition, but AT&T would like to cut it to five, it said. “A ten-year transition is far too long given the accelerating erosion of the [plain old telephone service] business model, of which intercarrier compensation is an integral component,” it said.

AT&T’s support for Martin’s draft raised eyebrows at CompTel, said Matt Salmon, CompTel president, in an interview. “Apparently, [AT&T is] engaged and privy to information that nobody else is,” Salmon said. “I find it incredulous that one entity can be so confident to come out and endorse a proposal when everyone is scratching their heads, wondering what’s in it,” he said. CompTel has been quiet on the draft because it hasn’t seen it, he said: “We're flying blind.”

AT&T hasn’t seen the order, either, Hultquist said. But AT&T believes it’s “critically important” to act now, he said. If the FCC delays, it could be two years before they have another chance, he said.