The March 23, 2018 FCC Report and Order, Third Order on Reconsideration and Notice of Proposed Rulemaking [FCC 18-29] revealed important steps for federal universal service funding and established a comment round on May 25 and replies on June 25. With that timing set, the FCC now begins at its June 7 meeting with several of the next phases of intercarrier compensation reform.

Two draft notices were released for discussion and action at the June 7 Commission meeting.

The first docket (WC Docket No. 18-155) addresses the updating of the intercarrier compensation regime to eliminate access arbitrage. This Notice proposes to offer access-stimulating carriers two options for connecting to IXCs: 1) to bear financial responsibility for the delivery of terminating traffic to its end office or equivalent, including applicable intermediate access provider terminating charges typically assessed to IXCs; or 2) to accept direct connections from either the IXC or an intermediate access provider of the IXC’s choice, allowing the IXC to bypass intermediate access providers imposed by the access-stimulating LEC.

The second docket (WC Docket No. 18-156) is focused to curbing toll free (8YY) arbitrage and fraud. This Notice seeks comment on: 1) a proposal to shift, over a three-year transition period, all interstate and intrastate originating toll free end office and tandem switching and transport charges to bill-and-keep; 2) a proposal to address reported abuses of toll free database query charges by capping database query rates on a nationwide basis at the lowest rate currently charged by any price cap LEC and limit database charges to a single charge per call; and 3) on other issues related to reforming toll free access charges, including the effect that moving most originating access charges for toll free calls to bill-and-keep will have on consumers, toll free subscribers, and carriers, as well as the best way for carriers to recover legitimate lost revenues.

Advocacy has already started with the FCC to protect rural broadband carrier interests in these dockets. GVNW will support advocacy that encourages the FCC to be precise in a focus toward inefficient arbitrage by defining what should be considered to constitute such a practice and to create specific remedies to solve those concerns. We will encourage the FCC to stay focused to properly noticed items and resist the temptation to solve other issues (e.g., network edge issues and what the “end state” should be for intercarrier compensation) in the context of an arbitrage docket. While initiated by AT&T, CenturyLink has now taken the baton and is advocating for the elimination of the rural transport rules.

We will be fighting for solutions to real problems, and resisting those who propose solutions in search of a legitimate problem to solve. As we continue in 2018 with the WATC series, please contact Jeff Smith on 503.612.4409 if you have any questions.