FCC Intercarrier Compensation and Universal Service Fund Reforms Create a Dramatic Increase in Tariff Activity According to CCMI

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The Federal Communications Commission’s Order to Reform Intercarrier Compensation Rates Sets the Stage for Several Years of Heightened Rate, Regulatory, and Legal Activity

CCMI’s Tariff Transmittal Alert is a convenient, free way to stay current with all of the latest tariff changes.
Carriers must closely examine their interconnection agreements and local exchange carrier tariff changes to ensure they are paying the correct rates.

On Dec. 29, 2011, the Federal Communications Commission’s long-awaited Order in FCC Docket 10-90 became effective. The Order, which is being implemented over a seven- to nine-year period, comes after several years of contentious debate among incumbent and competitive local exchange carriers, long haul and wireless service providers, internet service providers, cable service providers, and state and federal regulators. “Regardless of what could eventually transpire with regard to this Order, carriers and service providers are compelled to take significant action now to comply with the FCC’s new regulations,” according to George David, president of CCMI.

When fully implemented, the Order will eliminate an antiquated service-specific system of rates for communications traffic exchanged between carriers and replace it with a unified system administered by the FCC. The Order also immediately addresses two rate arbitrage faults – traffic pumping and phantom traffic – that have long-plagued the industry and impacted business and residential rates for communications services. Lastly, the Order refocuses the Universal Service Fund away from traditional telephony services and redirects the funds toward increasing the availability of broadband service nationally. The fund’s new name – the Connect America Fund – reflects this shift in emphasis.

“This Order finally eliminates the archaic patchwork set of rules that constitute the current intercarrier compensation system; however, the devil is in the details. Carriers must closely examine their interconnection agreements and local exchange carrier tariff changes to ensure they are paying the correct rates,” said Andy Regitsky, president of Regitsky and Associates, a company that monitors telecommunications regulatory changes. Moreover, Mr. Regitsky added, “Carriers should continue to follow this proceeding throughout 2012 and beyond, as the FCC is expected to order further changes to originating access and local transport rates.”    

Since intercarrier services are regulated at both the state and Federal level, the Order’s implementation will result in a significant rise in activity at all of the state regulatory Commissions along with a substantial increase in number and scale of tariff filings in each state. Mr. David reports, “CCMI has already seen a considerable increase in new tariff filings from carriers in just about every state as they begin to adjust their rates to comply with the initial phases of the FCC Order and to accommodate the Order’s new rules regarding VoIP traffic.”

Mr. David added, “This Order’s implementation spans almost the entire decade, and there are follow-on Orders which the Commission is expected to issue during 2012 that will introduce additional, significant industry-wide changes. As carriers and service providers respond to the FCC’s Order, CCMI will continue to assist them, as we have for more than 40 years, to track, manage, and address these critical changes with a comprehensive suite of online and database services, notably our TelView rate and tariff document service and our CABSdb Pro access rate database service.”

CCMI’s Tariff Transmittal Alert is a convenient, free way to stay current with all of the latest tariff changes. Learn more and sign up at http://www.ccmi.com/TelecomTools/TariffTransmittals.

About CCMI
CCMI is the industry’s leading provider of telecom rate and data information. We are dedicated to delivering highly specialized and strategically focused information in a timely fashion. For more information about CCMI products and services, visit http://www.ccmi.com/Products.

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Michele Campbell, Marketing Director
CCMI
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