FCC Postpones Bill-and-Keep For Local Wireless/Wireline Exchanges
The FCC agreed to put off imposing rules that would subject local wireless-wireline exchanges to bill-and-keep rates, the commission said in a reconsideration order issued Friday. The commission had been expected to issue a reconsideration notice sua sponte, on its own (CD Dec 23 p3). Under the reconsideration, local wireless-to-wireline exchanges won’t be subject to bill-and-keep until July 1. Bill-and-keep would have taken effect Thursday under the original order (CD Oct 28 p1).
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!
The delay had been sought by incumbents in two weeks of intense lobbying. Incumbents had complained that the immediate bill-and-keep rules would have deprived them of revenues without giving them any replacement cash until July 1. Now, incumbents may still lose revenue in the move to bill-and-keep, but they'll gain access recovery revenue at the same time the bill-and-keep rules take effect, Friday’s reconsideration said (http://xrl.us/bmmrhe).
The commission can still expect petitions to reconsider its USF order, telecom officials told us. CTIA opposed a delay of the bill-and-keep rules and has organized a meeting of some of its biggest members to discuss the conflict, a wireless official told us Friday. Invited were executives from Sprint, Verizon, AT&T and T-Mobile, the official said. CTIA officials were unavailable for immediate comment.
Lobbyists on both sides of the issue had been active for the last several days, the record at docket 10-90 showed. Wireless carriers uniformly argued that local exchanges should be subject to bill-and-keep rules immediately -- as the October order requires -- while incumbents and CLECs had argued for delaying or reversing those rules.
Among those rushing into the breach last week was U.S. Cellular, which told the FCC in a letter that a review of its own local exchange agreements demonstrates that the FCC’s assumptions in its universal service order “were entirely accurate as they relate to U.S. Cellular’s” experience. Since “the Commission is poised to act sua sponte, without providing the public notice required by Section 1.429 of the rules, U.S. Cellular has researched hundreds of interconnection agreements to provide the Commission with some useful data,” the company said in its letter. It said “most of the subject traffic is already rated at $0.0007 or below,” while “72.6% of all intra-MTA traffic billed between U.S. Cellular and ILECs is rated at $0.0007,” the company said. The company “has nearly 250 existing bill-and-keep agreements with rural ILECs,” U.S. Cellular said. “Second, substantially all of the billed traffic exchanged with CenturyLink, Frontier, AT&T, Verizon and FairPoint is rated at $0.0007. Windstream charges slightly higher rates.”
But California-based U.S. TelePacific Communications said the proposed bill-and-keep rules would have an immediate and detrimental impact on its revenue. TelePacific has long-standing agreements with wireless carriers for rates above $0.0007, its ex parte notice said (http://xrl.us/bmmqt3). “Contrary to the Commission’s assumption, TelePacific had a basis for reliance on the mutual compensation provisions of the [1996 Telecom] Act and Commission rules to receive compensation for the exchange of intraMTA traffic with CMRS carriers,” the company said.
TelePacific listed several rate ranges in its ex parte notice, but the figures were redacted before the notice was released. “TelePacific supports a uniform, cost-based rate for the exchange of all traffic,” the company said. “Granting a preferential rate to one form of traffic, such as LEC-CMRS intraMTA traffic, perpetuates the arbitrage the Order is designed to end. The Commission should subject the exchange of all LEC-CMRS intraMTA traffic to the same multi-year transition as other forms of terminating compensation.”