Telecom's Neverending Story – Channel Futures

Telecom’s Neverending Story

Written by Khali
April 30, 2005

This is the story of three petitions before the FCC this spring. All were about IP networks. All had timed out. Two were filed by Bell companies; one by a long-distance provider. One was granted, one denied and the third withdrawn. Taken together, they start to paint a picture of the emerging regulatory environment for VoIP services, particularly network-sharing requirements.

In March, Level 3 Communications Inc. pulled a forbearance petition asking the regulatory agency to affirm that carriers are obligated to pay local exchange carriers rates based on reciprocal compensation, rather than higher-priced access fees, for terminating over the PSTN a call that originated over an IP network.

While the withdrawal was said to give the commission and its new chairman time to get settled before considering it, it is believed Level 3 did not have enough of the commissioners in its corner.

However, the issues are sure to be raised in the agency’s intercarrier compensation rulemaking begun in March as there was much disagreement on the point. SBC Communications Inc. argued in response to Level 3’s petition that access fees apply and said Level 3 was taking a piecemeal approach to reforming the rules governing intercarrier compensation.

The second case, decided by the FCC at the end of March, was in favor of a petition filed by BellSouth asking to be excused from the requirement of providing customers with so-called “naked DSL,” a DSL line without an accompanying voice line.

Some attorneys say the ruling could embolden BellSouth and other regional Bell phone companies to refuse to provide standalone high-speed Internet access to a customer buying phone service from a VoIP provider. (Of the Bells, Qwest Communications International Inc. alone offers naked DSL.) If it is permissible to deny consumers DSL if they do not also order analog voice service, what prevents a carrier from refusing to provide DSL service to a savvy consumer who wants standalone broadband only for VoIP?

This is the exact question FCC Commissioners Jonathan Adelstein and Michael Copps asked as part of a joint statement partly dissenting from the FCC ruling.

This minority voice inspires some hope for companies that share facilities as does the results of most recent case rejecting SBC’s petition for regulatory forbearance on IP platform services. SBC’s petition requested IP services be exempted from Title II common carrier requirements, including the provision of underlying network access to unaffiliated ISPs. The commission, in denying the request May 5, asserted the filing was too vague. The decision may only be staving off the inevitable, however. Chairman Kevin Martin said the issues deserved consideration.

Despite the FCC’s deregulatory leanings concerning VoIP, on the heels of the loss of UNE-P, it appears network-sharing strategies involving the Bells are operating on borrowed time.

Congress, on the other hand, is likely to take up some lawmaking in very short order that will, in part, offer guidelines for the FCC to change the rules governing intercarrier compensation and establishing circumstances in which telecom carriers and other entities can deliver Internet phone service and content over the local networks controlled by phone companies and cable operators.