WASHINGTON-In an attempt to educate Capitol Hill staff about the importance of cost recovery, the Foundation for Rural Service released a paper saying that Voice over Internet Protocol could not be possible without the underlying telecommunications network provided by small rural wireline carriers.
The Foundation for Rural Service is the non-profit wing of the National Telecommunications Cooperative Association. FRS/NTCA last spring began an educational series to help preserve universal service as Congress begins debate on the rewrite of the Telecommunications Act of 1996.
“Strictly speaking, the customer often pays less for VoIP service than for traditional telephone service. This does not mean it is significantly less expensive for the service provider to deliver. It does, after all, require infrastructure and the customer to have a broadband connection, which can be costly. The reality is that VoIP service is less expensive because it plays by a different set of regulatory rules,” according to “Demystifying VoIP: Rural America’s Connection to the IP-Enabled National Telecommunications Network.” “Despite its heavy reliance on the existing communications network infrastructure and the fact that the cost of originating, transporting and terminating VoIP traffic imposes a similar cost on an incumbent local exchange carrier as a regular circuit-switched voice call, VoIP providers do not pay for their use of this network.”
Rural LECs have long championed not only universal service but continued assessment of access charges-both of which they term as cost recovery. The paper again makes this argument.
“ILECs have invested billions of dollars to create a robust network infrastructure that allows VoIP providers to exist and reach their customers. Without proper cost recovery, those that own the infrastructure cannot afford to maintain and upgrade their networks. The result could be a degradation or elimination of the very network that VoIP providers and other communications providers rely upon to provide service,” said FRS.
The amount of cost recovery that is owed to RLECs has been debated for a long time with the wireless industry generally arguing that it owes less than the RLECs believe. Additionally, RLECs do not believe that wireless carriers should receive the same amount of universal-service support because RLECs believe it costs the wireless industry less to serve the same customers.
