WASHINGTON-Cingular Wireless L.L.C. came out as the only major wireless carriers largely in favor of the so-called Missoula Plan, which calls for reforming the way and amounts telecommunications carriers pay each other to carry traffic, known as intercarrier compensation.
“For wireless carriers, the Missoula Plan provides much-needed stability. The plan transitions to unified rates for the majority of minutes over a three-year period-reducing the amount of access charges. The plan also establishes an interconnection framework that mitigates disputes, allowing wireless carriers to focus on their customers; balances the financial burden for the transport of different types of traffic, including wireless traffic; and fixes inequities in the rules for what wireless carriers may charge for the termination of traffic,” said Brian Fontes, vice president of federal affairs for Cingular.
The Missoula Plan got its name because negotiations began two years ago in that Montana town.
Wireless trade association CTIA believes the Missoula Plan retains all that is bad with the current intercarrier-compensation regime. CTIA wants a bill-and-keep system. Rural local exchange carriers say that if bill-and-keep is adopted, they would lose a significant revenue source necessary to keep their networks functioning.
Cingular’s parent company, AT&T Inc., also threw its support behind the initiative.
“There are people out there who argue for bill-and-keep. It is easy to argue for something that benefits only one side. It is more difficult to work together to find a solution that bridges the gulf,” said Joel Lubin, vice president of regulatory planning & policy for AT&T.
The Missoula Plan is meant to transition from a narrowband to a broadband world, said Lubin, noting it does not do this in a flash cut, but rather is measured and balanced.
The plan identifies pricing, rights and responsibilities for “virtually every combination of traffic if one end of the traffic is touching the public-switched telephone network,” said Lubin.
Verizon Communications Inc. did not participate in the Missoula Plan negotiations and did not sign a statement opposing the plan. In the past, the parent of the nation’s second-largest wireless carrier has said it wants a bill-and-keep regime imposed.
The Missoula Plan creates three tracks based on carrier size. Track I includes all wireless carriers, large wireline carriers and competitive local exchange carriers; track II is for mid-size rural wireline carriers; and track III is for rural rate-of-return local exchange carriers. For track I carriers, the subscriber line charge would increase in four steps to a cap of $10. The increase for tracks II and III would be less with the SLC charge capped at $8.75. The SLC contributes to universal-service funding.
RLECs are further protected by a provision in the plan that would kick in if the reduction of intercarrier compensation was greater than the increase in the cap.
End users receiving Lifeline support would not be required to pay any SLC increases.
“All of the money is in the system, it is being recovered differently. All of this money will be recovered,” said Lubin.
The Missoula Plan also proposes to solve the phantom-traffic problem by defining certain rights and responsibilities and the exceptions to those rules. Phantom traffic is network activity that cannot be billed-either no one claims the traffic or the originator cannot be identified. The situation can eat into carriers’ bottom lines since network time and resources are being used, but no one is being compensated.
Intercarrier compensation-sometimes referred to as access charges-is one of three RLEC revenue streams. RLECs also obtain money from end users and the universal-service fund.
Kevin Martin, chairman of the Federal Communications Commission, prefers a number-based system to reform the USF, where carriers would be assessed USF contributions based on the amount of telephone numbers they are allocated.
Missoula Plan supporters included a bar graph indicating that if a numbers-based USF contribution scheme is adopted along with the plan, low-volume wireless consumers will see their bills increase by 10 cents, while high and medium-volume customers would see a decrease.
