Wednesday, October 22, 2008

FCC Doing Heavy Lifting

The FCC is holding a meeting on Nov. 4. On the agenda: Inter-Carrier Compensation, Alltel-VZ merger, Clearwire-Sprint merger, and a vote of White Spaces. Lots of heavy lifting on this agenda. Martin wants to give his pals at VZ one more gift before he goes.

The VZ-Alltel merger is big, but the topic that can really rock telecom is the Inter-carrier Comp issue, which has been a stagnant FCC docket for years.

If companies can show high costs, they will continue to benefit from the subsidy program. Martin also wants to eliminate wireless providers' right to claim government subsidies for offering service in hard-to-reach areas. Martin wants all companies, wireless included, to show they have incurred losses in providing rural service before they can collect the subsidy. Without those changes, Martin worries that the subsidy fund will collapse of its own weight and rates will go up anyhow. [CNN]

It depends want the Compromise looks like -- and it will be a large compromise. Democrats want one thing. Republicans another. Cellcos versus Wireline. Rural versus Urban. Inter-Carrier Comp even bleeds into the USF issue. How? Because rural carriers count on both Universal Service Fund subsidies AND rather high call termination charges to keep afloat.

Why now? The ISP inter-carrier comp rule has been in court for six years. Earlier this year, the DC Court ruled that the FCC had to get off the pot:

The court set the deadline for an order from the FCC at November 5, 2008, six months from the date of oral argument, stated it will not grant an extension and warned that if an appropriate order is not timely issued, it will vacate the interim inter-carrier compensation rules.

Consumer groups are against another largess for the monopolies at the expense of the ratepayers.

The head of the Federal Communications Commission wants a massive overhaul of the fees that phone companies pay each other when they connect calls. Supporters say the reforms will help fund improved broadband Internet access for rural America, but consumer advocates question how much the plan will raise people's phone bills. "This could be potentially a billion-dollar giveaway to phone monopolies, paid for out of consumers' pocketbooks," said Chris Murray, an attorney with Consumers Union. [AP]

Intercarrier comp is how the various phone companies pay each other for traffic. VoIP providers and cellular carriers, especially Sprint, would like a fairer shake. The old RBOCs would like the Rural LEC's to stop getting so much money. (see Free Conference services not getting paid by RBOCs).

The National Telecommunications Cooperative Association, which represents small phone carriers, told FCC officials earlier this month that a new rate of $0.0007 per minute puts many of their members' livelihoods at risk.

And then there is the White Spaces issue. When broadcasters make the DTV transition in 1Q09, there will be unused spectrum that the Wireless World would like to use for its own bandwidth needs. However, due to bleed over (interference) with cordless microphones and other broadcasting devices, the NAB is opposed. [see dailywireless]

All of this is at one meeting while America votes.

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