ntca+universal serice capAT&T’s proposal to shut down much of its traditional telecom infrastructure was bound to shake up the telecom industry – and evidence of that shakeup came last week in the form of an FCC filing from the National Telecommunications Cooperative Association. In a petition for rulemaking, the NTCA urged the FCC to consider confirming that VoIP and other telecommunications traffic is subject to inter-carrier compensation, regardless of the technology used to achieve that interconnection. Although the NTCA petition does not specifically mention AT&T’s filing, its timing suggests that it was triggered by AT&T’s request that carriers not be required to interconnect with one another in TDM format in the TDM-to-IP transition trials that AT&T has proposed.

The NTCA’s recommendation about inter-carrier compensation was one element of a broader request that the NTCA made to the FCC, asking the commission to examine means of promoting and sustaining an ongoing TDM-to-IP transition through “targeted” regulatory relief and the establishment of “tailored near-term economic incentives.”

Interconnection issues
In an email to Telecompetitor, an NTCA spokesperson noted that the FCC last year said that VoIP and other telecommunications traffic is subject to inter-carrier compensation requirements of the Telecommunications Act, using that rationale as authority to change inter-carrier compensation rates.  “It must follow that interconnection for the exchange of such traffic is also subject to the Act, regardless of the technology used to achieve that interconnection,” the NTCA spokesperson said.

In its 20-page filing, the NTCA argues that uncertainty about IP connection for the exchange of traffic hinders the deployment of IP-enabled networks. “In fact, it would seem to create perverse technology choice incentives by encouraging retention of TDM-based networks (at least at the points where they interconnect with other networks) simply for the purpose of ensuring a clearer set of ‘ground rules’ around interconnection and inter-carrier compensation,” the NTCA says.

Small rural telcos rely heavily on inter-carrier compensation to help cover the cost of delivering telecom services, which are higher in rural areas. The FCC plans to phase out the inter-carrier compensation system but that will be a multi-year process. In its filing, the NTCA does not oppose AT&T’s request to be able to connect with other carriers only in IP format – at least not if that traffic continues to be subject to inter-carrier compensation.

The NTCA filing also encourages the FCC to provide carriers with an incentive to offer IP interconnection by allowing them to adjust interconnection rates to allow them to recover the costs of exchanging traffic in that manner.

“Such an ‘incentive-based’ approach would reward carriers that seize the opportunity to invest in IP-enabled interconnections across their network,” the NTCA said. “Such a structure would also have the benefit of more closely resembling the means by which carriers actually interconnect and compensate one another in the ‘Internet world.’”

Regulatory “refreshing”
In its filing the NTCA urges the FCC not to use service classifications or other methods to make sweeping changes to the current regulatory framework.

“This petition . . . recommends a more balanced approach of ‘smart regulation’ that examines what has worked (or not) in protecting consumers, promoting competition and ensuring universal service,” the NTCA filing says. “After this review, the commission can consider what from the framework should be kept, discarded or modified as the IP migration continues.”

The NTCA asks the FCC to take three specific steps including:

  1. Developing a list of existing regulations that may have limited or no applicability in the delivery of IP-enabled services.
  2. Seeking comment on which of the identified regulations might be eliminated, retained or retained with modifications.
  3. Setting a firm but reasonable deadline for completing this “refreshing” of the current regulatory framework.