Carriers Say FCC Guidance on Switched-IP Traffic Would Prevent Disputes, Promote Broadband

“In the absence of Commission guidance on VoIP and other related intercarrier compensation issues, industry disputes are multiplying out of control, fair competition is being undermined, the efficient growth of IP-based services is being distorted, the deployment of broadband networks is being impeded, and universal service is being threatened,” AT&T said. The UTex dispute was raised before in the context of a forbearance petition by FeatureGroup IP, a UTex alias. The FCC denied that petition earlier this year, avoiding a ruling on the switched-IP issue.

USTelecom and the National Exchange Carrier Association joined AT&T’s call for an overhaul, though they didn’t weigh in on the merits of the AT&T-UTex dispute specifically. “These disputes have important real world consequences, including the crowding out of fair competition by arbitrage and the distortion of the efficient growth of IP-based services,” USTelecom said. “They are an unnecessary waste of judicial resources, a deterrent to investment, a roadblock to innovation, and a threat to universal service. These consequences can only be fully rectified by Commission action on inter-carrier compensation reform, preferably through a comprehensive approach.”

FCC indecision on switched-IP traffic has hurt rural phone companies, said NECA. “NECA tariff participants are experiencing rapid growth in the number of access minutes sent by interconnected VoIP providers and other carriers, who refuse to pay tariffed charges based on claims ’the FCC hasn’t decided whether access charges apply,'” it said. “Since access revenues are crucial to deployment of advanced services and broadband networks, uncertainty in this area substantially undermines prospects for achieving the Commission’s national broadband deployment goals.”

An FCC arbitration proceeding isn’t the place to make policy on the switched-IP access charge issue, USTelecom said. “The arbitration process is, by its nature, very specific to the situation and set of facts presented in each particular dispute,” it said. “It is not the appropriate process for making piece-meal policy decisions impacting a wide set of issues and providers.”

Since an intercarrier compensation revamp may still be a way off, the FCC should in the meantime confirm “that cases involving compensation for traffic should be decided under existing intercarrier compensation rules,” NECA said. “Such an order would confirm … existing rules remain in effect notwithstanding the pendency of various FCC proceedings, and are to be followed by state regulators and courts in resolving such disputes. This would not in any way prejudice ongoing rulemaking proceedings, but would at least be helpful to courts and state regulators in addressing these issues pending overall ICC reform.”

An FCC decision to arbitrate the AT&T-UTex dispute would require preemption of the Texas Public Utilities Commission. To preempt, the FCC must show the PUC failed to act. But in comments, the Texas PUC said it never refused to arbitrate, nor failed to act in a reasonable amount of time. “Contrary to UTEX’s allegations, the [Texas PUC] is attempting to carry out its responsibility to arbitrate a new UTEX interconnection agreement, and UTEX has not been deprived of a forum for its arbitration request.” However, the matter will be held up until the FCC “establishes the standards for the regulatory classification and treatment of VoIP, including, particularly, the assessment of access charges.”

Applying FCC rules “literally,” the FCC could conclude preemption is required, because the PUC didn’t “literally ‘complete’ the arbitration within the statutory time limit,” said AT&T. But since Texas is ready to act but waiting for FCC guidance, the PUC needn’t be preempted, the carrier said. “If there was ever good cause for not strictly enforcing a Commission rule, there is good cause here.”