Today, WTA, NECA, NTCA and OPASTCO filed comments in response to the FCC’s Further Notice of Proposed Rulemaking regarding intercarrier compensation reform.
The associations urged the FCC to carefully evaluate end-user impacts and cost-recovery implications of ICC reform for rural America. It is critical that the Commission take specific account of both universal service considerations for rural consumers and the true extent of the costs of providing network access in high-cost rural areas before making further reforms to the ICC rules. In particular, the FCC must ensure a well-defined, sufficient and predictable transition for rural carrier cost recovery before moving originating access or remaining transport and termination rate elements toward a bill-and-keep regime, in which tariffed ICC rates can no longer be charged.
The associations noted that ICC has been an essential component for promoting universal service in high-cost areas by helping to keep end-user rates low and enabling network investment and maintenance. If ICC revenues are substantially reduced or driven to zero by regulatory fiat and done so without meaningful alternative cost recovery beyond higher rates for consumers in high-cost areas, rural rate-of-return regulated local exchange carriers (RLECs) will not be able to sustain their previous progress in deploying high-quality advanced networks. Consumers in these high-cost areas could see their broadband and voice service availability, quality and affordability deteriorate significantly. The FCC must therefore calibrate ICC reform in a manner that ensures sufficiency, predictability, and specificity of support mechanisms, rather than simply squeezing USF and ICC support revenues into tightly constrained and artificially designed budgets.
In their joint comments, the associations also urged the FCC to:
-Avoid compelling any migration to bill-and-keep for additional switched service rate elements until it has time to evaluate the reforms already made and address significant complexities related to additional reforms.
-Cap current transit service rates, and then proceed to regulate the prices for such services consistent with functionally equivalent transport and tandem switching services.
-Ensure well-defined interconnection obligations, consistent with the statutory framework, to minimize further intercarrier disputes and preclude the imposition of arbitrary and uncontrollable expenses on rural consumers.
-Permit the continued use of tariffs as a means of establishing the rates, terms and conditions of network interconnection and traffic exchange.
-Recognize it is premature to consider phase-outs or accelerated reductions in end-user access recovery charges and Connect America Fund ICC support.
-Strengthen call signaling rules to address continuing concerns about phantom traffic.
“Whether through intercarrier compensation or some alternate method, RLECs need to be able to continue recovering costs to sustain the previous progress they have made in deploying high-quality advanced networks to their customers,” said Jeff Dupree, NECA vice president of government relations. “We look forward to working with the FCC to calibrate ICC reform in a manner that ensures sufficiency, predictability, and specificity in support mechanisms.”
”The intercarrier compensation system has been an essential component of universal service for decades,” said NTCA Senior Vice President of Policy Michael Romano. “Thoughtful, measured ICC reform is required to sustain the core statutory mission of universal service, establish a level playing field between smaller and larger carriers, and avoid foisting even greater costs on rural consumers and businesses.”
“Intercarrier compensation is a significant source of network cost recovery for RLECs, and the revenues it provides enable these carriers to provide broadband services to their customers as well as maintain affordable rates,” OPASTCO Vice President of Regulatory Policy and Business Development Stuart Polikoff stated. “It is essential that the FCC make the effects on rural consumers a primary consideration as they proceed with ICC reform, and that they carefully coordinate those reforms with ongoing High-Cost USF reform. If rural carriers are left without sufficient and predictable sources of network cost recovery, then rural consumers will be left behind in the broadband revolution.”
“Proceeding down the path of rate reduction without first waiting to see what the effects of USF reform will have on small, rural companies and their customers is unwise,” said WTA Executive Vice President Kelly Worthington. “The FCC shouldn’t take rates down without providing a truly sufficient cost recovery mechanism to cover the difference. As proposed in the Order, the math just doesn’t add up and rural consumers are going to be negatively affected.”