Big Telcos, Some Others Ask FCC to Complete Shift to Bill-and-Keep; Rural Telcos Wary

"Carriers have shifted their arbitrage activities to the elements of the historic system that have yet to switch to bill-and-keep, including not just terminating tandem and transport charges, but also originating access charges," commented AT&T. "These arbitrage schemes involve billions of minutes and massive access charges." It urged a default "network edge" to determine carrier responsibilities and a decision on potential "residual regulation" governing arrangements with intermediate carriers.

The FCC should rapidly transition "all originating access rates and transport rates to bill and keep," and "adopt targeted measures to address transport arbitrage," said Verizon. Sprint endorsed "the complete and expeditious implementation" of bill-and-keep, replacing "all remaining access rate elements, and remains concerned that [LECs] will be reluctant (or even refuse) to enter into far more efficient IP interconnection arrangements" as long as they can collect access charges. The Voice on the Net Coalition also backed moving to bill-and-keep.

Many ILECs exchange much voice traffic in "highly inefficient TDM-based arrangements," forcing cable companies to "spend millions of dollars every year converting IP-based voice traffic," said NCTA. It urged "incentives for completing the transition to an all IP-environment," and meanwhile, sought "reform" of transit and tandem-switched transport services "with an eye toward ending anticompetitive practices and encouraging the phase out of legacy network arrangements." T-Mobile said the agency should create such incentives, scrap rules slowing the IP transition, and convene a federal-state board to work with industry to consolidate interconnection points.

CenturyLink criticized an "asymmetry" in which "terminating access tandem switching and transport in only certain price cap ILEC and CLEC tandem/end office combinations are subject to bill and keep" while others "providing equivalent functionality" remain compensable. "Correct this asymmetry by adopting rules permitting all tandem owners to be compensated equally for the use of their networks -- thereby establishing the end office as the proper default network edge for all providers," recommended CenturyLink. It said bill-and-keep "should not be mandated for any tandem switching and transport services whether those services are provided in connection with traffic bound for the tandem providers’ own (or affiliated) end users or to a third party." ITTA said carriers should be required to "make one or more network edge point(s) available such that carriers that interconnect at that point will pay nothing to the terminating carrier for terminating the traffic. The network edge for wireline LECs should be the called party’s end office." It opposed transit rate regulation.

NTCA and WTA sought caution and action only after high-cost USF "budget shortfalls" are addressed. Any subsequent "reforms" should create certainty about "network 'edge' transport obligations, while protecting rural consumers," and should ensure rural telcos aren't forced to incur major new costs to transport traffic for others, the RLEC groups said. "Facilitate IP-to-IP interconnection by providing stable and clear 'rules of the road' governing all underlying network technologies" and "provide RLECs with reasonable opportunities to recover authorized revenue requirements" through intercarrier charges "and/or other support mechanisms." Nebraska RLECs said no carrier should be able to use another's network "free of charge," disputed the need for further "network edge" regulation and proposed five "non-access intercarrier compensation principles."

Carriers offering tandem, transport and transit services said bill-and-keep should apply only to "switched access services provided by carriers serving end-users within their own networks." The FCC should create direct interconnection duties where a requesting carrier's traffic volumes meet certain standards, said Peerless Networks and others. They said the four large wireless carriers refuse direct interconnection for interMTA (major trading area) traffic terminating on their networks "and/or" assess "excessive" terminating fees. HD Tandem sought an IP-based transition with "regulatory glide paths," not "flash cuts." General Communication asked for Alaska-specific network-edge rules. South Dakota Network said "centralized equal access" tandem and transit services should be addressed separately, with revenue preserved.