WASHINGTON-As various industry segments try to develop a new compensation regime for carrying calls, state regulators Wednesday released goals and principles of any new intercarrier compensation scheme.
“Because it was assembled piecemeal over time, the current intercarrier compensation system has inconsistencies that can result in discriminatory practices, ‘gaming’ of the current system, and other unintended outcomes. To assist the effort to reach a balanced solution, a group of commissioners and staff from the National Association of Regulatory Utility Commissioners drafted a set of guiding principles against which the various anticipated proposals can be evaluated. These principles address the design and functioning of, and the prerequisites to, a new intercarrier compensation plan. They do not address the amount or appropriateness of costs recovered by particular carriers through intercarrier compensation,” said NARUC.
The intercarrier compensation forum is leading the charge to reform intercarrier compensation. It has been meeting for months to try to come up with a plan that it can present to the Federal Communications Commission to solve a problem that has gotten trickier with the advent of new technologies including wireless.
Under the current system, adopted in the wake of the Telecommunications Act of 1996, carriers pay each other to carry traffic using a scheme known as reciprocal compensation. The incumbent local exchange carriers, particularly the regional Bell operating companies, have complained that with the Internet, some competitive carriers are gaming the system because more traffic goes out than comes in, so the Bells have to pay. The Bells began arguing for a new scheme of “bill-n-keep,” where carriers decide the best method to transport calls, they buy this transport, and then they bill their customers what they think the market will bear. Wireless carriers have made the same argument because more calls go out from wireless than come in so wireless carriers end up paying others to carry traffic.
A panel at the NARUC convention in March extolled the pros and cons of bill-and-keep. Competitors and small rural exchange carriers do not like it. One of the competitors’ biggest complaints is that they are not involved in the intercarrier compensation forum because they would not agree to bill-and-keep.
According to NARUC’s principles, bill-and-keep should be voluntary and limited. “In limited circumstances, carriers may voluntarily enter into a bill-and-keep arrangement,” it said.
