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NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES
RESOLUTION
Authorizing NASUCA to Respond to the FCC’s Proposed
Unified Intercarrier Compensation Scheme
That Would Shift Additional Access Charges to Consumers
WHEREAS, on April 27, 2001, the Federal Communications Commission
released a Notice of Proposed Rulemaking (NPRM) concerning a proposed
Unified Intercarrier Compensation Regime (Regime);
WHEREAS, carriers that use other carriers’ facilities to
complete calls for their own customers have generally paid for the
costs of originating and terminating their traffic on the networks
of those other carriers;
WHEREAS, the NPRM proposed to increase the charges paid directly
by consumers and eliminate the charges that each carrier pays to
originate and terminate the call on other carriers’ facilities;
WHEREAS, the current regime includes access charges, which interexchange
carriers ("IXCs") and commercial mobile radio service
("CMRS") providers pay to local exchange carriers ("LECs")
to originate and terminate long distance calls, as well as reciprocal
compensation, which LECs pay other LECs for terminating local calls
on the other LECs’ networks;
WHEREAS, the predominant form of inter-carrier compensation requires
the calling party’s carrier, whether LEC, IXC or CMRS, to
compensate the called party’s carrier to terminate the call;
WHEREAS, the FCC has exempted Internet Service Providers from paying
originating and terminating access charges and is concerned that
consumers may use internet telephony and carriers will lose access
charge revenue as a result;
WHEREAS, because the FCC intends to exempt interconnecting networks
from paying terminating access charges, and in order to protect
the incumbent local exchange providers from revenue losses, terminating
access charges may be charged directly to consumers receiving calls
which originated on a network different from their own;
WHEREAS, the local carriers with the highest originating and terminating
access charges are generally rural carriers operating in high cost
areas;
WHEREAS, eliminating the requirement that other carriers pay originating
and terminating access charges to local carriers would generally
raise the rates of all consumers – particularly rural consumers;
WHEREAS, raising the rates for basic local service will impede
the ability of consumers to obtain the benefits of universal service;
WHEREAS, charging consumers for receiving telephone calls from
other carriers and placing telephone calls to customers of other
carriers will discourage consumers from switching to and taking
calls from another carrier;
WHEREAS, the Telecommunications Act of 1996 (Act) requires incumbent
local exchange carriers to negotiate with other local carriers to
establish reciprocal compensation arrangements and also requires
that the Universal Service Joint Board, FCC, and state commissions
preserve and advance universal service at just, reasonable, and
affordable rates;
WHEREAS, the NPRM has solicited comments as to whether the FCC
has the authority to establish this Regime for intrastate access
terminating charges;
WHEREAS, the NPRM now claims that this proposal to increase local
service rates will achieve greater "efficiency" and encourage
local competition but, in reality, this proposal will threaten universal
service, place more of a burden of supporting the network on those
who use the network least and inhibit the development of competition;
WHEREAS, such local rate increases are contrary to the goal of
the Act concerning universal service;
WHEREAS, because the Act requires that any reciprocal termination
charge for local traffic must be negotiated between interconnecting
carriers, allows the use of bill and keep as a means of avoiding
the payment of reciprocal termination charges, but does not allow
interconnecting carriers to resolve reciprocal compensation issues
by each carrier billing their local consumers for these charges,
the Regime violates the Act;
WHEREAS, the FCC does not possess the legal authority to raise
local rates concerning originating and terminating access charges
for reciprocal compensation and intrastate access;
WHEREAS, before shifting a carrier’s origination and termination
access revenues to a carrier’s consumers the FCC should also
consider the effect of eliminating the carrier’s origination
and termination access payments that the same carrier would no longer
be required to pay.
WHEREAS, the problems identified by the FCC with the existing interconnection
regime do not require such drastic changes to carriers’ interconnection
compensation;
THEREFORE BE IT RESOVLED that NASUCA is authorized to file comments
with the FCC in order to oppose the Regime proposed in the NPRM;
BE IT FURTHER RESOLVED that NASUCA should recommend that the consideration
of the Regime should be referred to the Universal Service Joint
Board; and
BE IT FURTHER RESOLVED that NASUCA should recommend that the FCC
should not consider shifting origination and termination charges
to consumers until the FCC determines whether those charges are
in excess of cost and whether the carriers receiving such revenues
would be recovering excessive returns on such charges; and
BE IT FURTHER RESOLVED that there is so little effective local
competition that it will be difficult for consumers to avoid such
shifting of access charges to local rates; and
BE IT FURTHER RESOLVED that forcing consumers to pay terminating
access charges, but exempting local carriers from paying for this
same functionality is bad economic policy, anti-competitive and
not reflective of how true competitive markets operate; and
BE IT FURTHER RESOLVED, that the Executive Committee of NASUCA
is authorized to take all steps consistent with this Resolution
in order to secure its implementation.
Approved by NASUCA: Submitted by:
Santa Fe, New Mexico NASUCA Telecommunications
Place
July 17, 2001
National Association of State Utility Consumer Advocates
8380 Colesville Road, Suite 101, Silver Spring, MD 20910
Phone: (301) 589-6313 Fax: 589-6380
e-mail: nasuca@nasuca.org |