'Intercarrier Compensation Reform' Means Higher RatesFCC's Martin to once again wade into decade old fight... ( old news - 12:01PM Wednesday Oct 15 2008) tags: legal · prices · competition · fcc · business · telco · consumersAccording to the Associated Press, the major phone carriers have convinced FCC boss Kevin Martin to once again attempt an overhaul of the fees that phone companies pay each other when they connect calls. The existing "intercarrier compensation" system largely favors smaller telcos, and baby bell lobbyists have been pushing the FCC to change this for some time -- though the solution will have many of you paying more. With bell-friendly Kevin Martin potentially on the way out, AT&T and Verizon are apparently giving it one more shot. Kevin Martin's revamped plan (which will largely duplicate a plan crafted by Verizon last September) would involve creating a uniform compensation fee system ($0.0007 per minute). The move would impact phone and VoIP companies of all stripes. However, when a proposal is designed by AT&T and Verizon and pitched by Kevin Martin, you can pretty solidly guess that consumers are going to get the short end of the stick -- while being told the exact opposite. Martin and AT&T's proposal involves raising the cap on the "subscriber line charge" paid on your monthly bills from $6.50 to $8.00 or $8.50 per month (telcos have been trying to hike this to $10 for years). The FCC Subscriber Line Charge, sometimes called the End User Common Line Charge, is, by the FCC's own definition "not a government charge or tax"; it goes right back to the bells, and is a handy way to raise rates via a below the line fee while keeping advertised rates the same. The AP explains why the bells want the hike: David Bergmann, an attorney with the Ohio Consumers' Counsel and chairman of the telecom committee for the National Association of State Utility Consumer Advocates, believes phone companies are pushing for intercarrier compensation reform for another reason, too. With so much traffic moving off traditional telecom lines and onto wireless and Internet networks, whose providers pay lower or no access fees, phone companies are watching their access fee revenue shrink. An increase in subscriber line charges paid by consumers would help offset this. The AP report claims that rural customers would likely see higher rates too, as rural phone companies try to make up for the lost revenue. Martin is claiming that he'll use money from the USF to offset this lost revenue, and wants to increase the fund by "requiring any device with a working telephone number to pay a flat Universal Service fee of $1." However, the USF for years has been a poorly regulated slush fund that eats money -- and desperately needs reform and oversight before expansion. Martin is hoping to discuss his Verizon's plan at a meeting in November.
Related:- Wednesday Evening Links
- Thursday Morning Links
- Thursday Evening Links
- Wednesday Evening Links
- Friday Evening Links
- Real Consumer Group Takes Aim At Fake Ones
- Comcast Can Officially Get Even More Gigantic
- What Network Neutrality Is REALLY About
|
 
S_engineer
join:2007-05-16
Chicago, IL | I sincerely hope.... thats theres some thought behind hiring his successor. "Potentially" on the way out...one could only hope!
--
The "Lifetime" channel is responsible for 83% of all divorces...Robert Ginty | |
| 
en102
Canadian, eh?
join:2001-01-26
Valencia, CA
 ·RoadRunner Cable
 ·DSL EXTREME
| Carriers want higher rates... They're going to charge themselves right out of the POTS business.
Lets see...
Low End:
Skype (no phone number) - requires Internet
$3/month unlimited Canada/US Calling
Vonage: $25/month unlimited Canada/US Calling - requires Internet
TWC: $30/month - $40/month unlimited Canada/US calling
AT&T VoIP: $30-$40/month unlimited Canada/US calling - requires Uverse
AT&T POTS: $45/month ~= $58/month (after fees) unlimited Canada/US Calling
At almost $20/month more than the most expensive VoIP products, people will not stay on POTS. My last bill
had +$10 of BS fees/bonds/taxes/unfees on it.
--
Canada = Hollywood North | |
|  | | |
S_engineer
join:2007-05-16
Chicago, IL
·Comcast
| said by en102  :AT&T POTS: $45/month ~= $58/month (after fees) unlimited Canada/US Calling My POTS in Chi-town is roughly $35 w/taxes. People will always use POTS for reliability reasons. One reason they're ready to throw POTS under the bus is because that POTS is the Bells biggest labor expense.
Don't think for one minute, if they got rid of POTS, that your VOIP fees wouldn't go through the roof. | |
| | | | 
KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | AH... but you see they will charge these fees to the VOIP operators to complete connections to their customers. :/ | |
| | AstroBoy
join:2008-08-08
Parkville, MD | Magic Jack: $20/year unlimited Canada/US Calling - requires Internet, computer and open USB port. | |
| | 
sivran
Long Live The Suite
Premium
join:2003-09-15
Arlington, TX
clubs:
·RoadRunner Cable
| Or, for people who don't need or want long distance:
AT&T Unlimited Local: $10 +$12 taxes/fees etc = $22/mo.
And in my area, that amounts to: 100% uptime that does not rely on your internet connection, nor use up precious upstream bandwidth.
It's a steal. At this kind of price and reliability, I'll never ditch my landline. People ditching their landlines for cells or voip are either lucky enough to have ISPs and cells as reliable as my landline, or are shortsighted.
--
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon profitable cause... | |
| | | ross
join:2000-08-16
·Digizip
| Re: Carriers want higher rates... said by sivran :Or, for people who don't need or want long distance: AT&T Unlimited Local: $10 +$12 taxes/fees etc = $22/mo. And in my area, that amounts to: 100% uptime that does not rely on your internet connection, nor use up precious upstream bandwidth. It's a steal. At this kind of price and reliability, I'll never ditch my landline. People ditching their landlines for cells or voip are either lucky enough to have ISPs and cells as reliable as my landline, or are shortsighted. Unless they, apparently unlike you, read the new AT&T Residential Service Agreement, and objected to the terms of service.
It's tough to be forced to choose between your civil rights and cheap, dependable POTS. Especially, if like me, you have to give up telephone numbers that you may have had for a long, long time. Fuck AT&T! | |
| Sammer
join:2005-12-22
Canonsburg, PA
1 edit | Get rid of the FCC Subscriber Line Charge "Martin and AT&T's proposal involves raising the cap on the "subscriber line charge" paid on your monthly bills from $6.50 to $8.00 or $8.50 per month (telcos have been trying to hike this to $10 for years). The FCC Subscriber Line Charge, sometimes called the End User Common Line Charge, is, by the FCC's own definition "not a government charge or tax"; it goes right back to the bells, and is a handy way to raise rates via a below the line fee while keeping advertised rates the same."
Whatever it is called the government shouldn't be supporting false advertising and the Line Charge should meet its long overdue and well deserved demise. | |
| | megarock
join:2001-06-28
Saint Louis, MO | Re: Get rid of the FCC Subscriber Line Charge Agreed on this one.
Seriously, I pay a monthly fee for a phone line and then another fee for having the subscription to a phone line. Kill off the EUCLC because all I am doing it paying for the same line twice. | |
| nitzan
Premium,VIP
join:2008-02-27
 ·ViaTalk
·Comcast
| This should pass. If this passes, what it means is higher rates for POTS customers and lower rates for VoIP customers.
I'm all for it- there is no reason why a domestic call should cost more than a cent a minute wholesale.
This will just speed up the migration from POTS to VoIP. 
--
Nitzan Kon, CEO
Future Nine Corporation | |
| | 
jimbo48
join:2000-11-17
Hayward, CA
·AT&T DSL Service
·EarthLink
| Re: This should pass. All well and good in theory; that is, UNLESS you can't get decent services to carry VOIP. VOIP requires connection to a reliable internet service,thus you pay for either a substandard DSL and then listen to your VOIP connection stutter because you can't use your DSL AND VOIP at the same time because the DSL line sucks hind tit! There are those fortunate locales where real competition is is in place where you can get something besides crappy DSL but then you have yet another set of hands rummaging through your wallet for even more share of the remaining dollars.
At least POTS line is there when you need it or use it, doesn't stutter or require a reboot of the router and/or ISP reconnect. The FCC needs a major enema to clear its Shit for brains management's head and realize that their edicts are just more screw jobs for the consumer. | |
| | | | | | | 
blorp
@cloud9.net
| Re: This should pass. said by neko :"Can you give me pay-as-you-go international calling to the UK at 0.009 cents per minute?" Guess what? The answer, after some bullsh*t & nonsense from the CSR's, is a resounding NO! Of course they said no. 0.009 cents is less than a penny. Why would (how could?) anyone sell any kind of voice service with PSTN termination for less than $0.01 a minute? | |
| | | | | nitzan
Premium,VIP
join:2008-02-27 | Re: This should pass. We do, and make a profit on it, too.  | |
| | 
joako
Premium
join:2000-09-07
/dev/null
 ·AT&T U-Verse
| said by nitzan :If this passes, what it means is higher rates for POTS customers and lower rates for VoIP customers. I'm all for it- there is no reason why a domestic call should cost more than a cent a minute wholesale. This will just speed up the migration from POTS to VoIP. Actually quite the opposite. The want to overhaul the "intercarrier compensation" system. All phone companies charge themselves fees to connect the calls between each other. Basically a peering arrangement between the telcos. If AT&T and Verizon get their way, Level3, Global Crossing, etc will pay more per minute to terminate calls. While most VoIP providers don't connect directly to the PSTN they do pay these larger carriers for that service, even the providers that do or the smaller CLECS... everyone is going to pay more.
--
09:F9:11:02:9D:74:E3:5B:D8:41:56:C5:63:56:88:C0 | |
| |
RealityOfVoip
@nefcom.net
| You are not comparing apples to apples when talking about POTS and VOIP. Just as apples and oranges have different prices - so do VOIP and POTS. For one POTS is run over copper (expensive metal - hence why it is being stolen lately), in addition POTS providers ILEC's or CLEC's are held to higher regulatory standards of service than VOIP providers - providing better service costs more!!! You get what you pay for so when the lower standard VOIP product experiences packet loss and your service declines - just keep in mind you wanted "cheaper"!! | |
| dcdeadbeat
join:2008-10-07
Washington, DC
·Covad Communications
| there is a lot of confusion about terms in this thread POTS refers to the old analog phone system and equipment.
What people really should be using is PSTN which means Public Switched Telephone Network. This is actual "phone network" we use. It can be a mix of analog (POTS) or digital (ISDN). When you have a phone number in the U.S., it is called a DID. This DID can be attached to the PSTN, a cell phone network, or a VOIP network.
When you call a phone number (a DID) you have at some point transfered over to the PSTN. Even if you have a VOIP provider like Vonage or Comcast Digital Voice you are using the PSTN to transfer to VOIP. IF you don't use an actual phone number (a DID) then you don't need to transport across the PSTN.
In other words, the problem is that these fees are associated with the PSTN and DIDs. Notice that your cell phone, Vonage, and even a wireless Internet card are all assigned a DID (phone number). That's when the fees get added.
To avoid the whole thing, don't get a phone number. With VOIP you can call directly to another person and never transport over the PSTN (the phone network). No PSTN, no fees (not even the ugly 911 fee).
The only Fees that you will pay is if you need a DID (phone number for your internet connection. For example, a DSL number usually has a phone number (DID). The same holds true for a just about any broadband connection.
We are never going to see those fees go away until we have a Telco free Internet and everyone is using VOIP. But because these fees are the only profit left in the industry, they are never going to go away. And neither is the PSTN. It is simply based upon proven technology and people are trained to dial an area code and phone number. | |
| megarock
join:2001-06-28
Saint Louis, MO
·Charter Pipeline
| Martin - another W. choice. Yet another W. Bush cronie that's done nothing good for the communications industry but alot of bad. Being the pro-corporate atmosphere of the current administration it's clear every arm of the government is going to do every thing it can to pet their corporate friends one last time before they are all outed in November.
In the past eight years the FCC has done nothing to encourage competition in the broadband and/or cable markets, the telco markets or the cellular markets. There are still no ala-carte programming offers, in most areas there are still only one or two choices in broadband and normally only the same three choices - cable or satellite.
It's time to stop kissing the rump of the baby bells who although were broken up quite a few years ago under the guidance of Martin and the W. administration are again a monopoly who are slowly pushing out all competition from the market.
Remember this during voting. | |
| | RayW
Premium
join:2001-09-01
Layton, UT
clubs:
·XMission
| Re: Martin - another W. choice. said by megarock :Yet another W. Bush cronie that's done nothing good for the communications industry but alot of bad. ...... Remember this during voting. Who is there to vote for then?
Some of the folks that Obama has in his campaign are scary, look at some of economic issues that they caused with Fannie Mae and Freddie Mac and so on.
McCain? He is no better. For example, remember a top notch tech company named Hewlett Packard, now a second rate computer merchandiser? And who ruined them?
All those folks have to be paid off, just like the Clintons did and GW and etc.
--
I am not lost, I find myself every time. | |
| voipdabbler
join:2006-04-27
Kalispell, MT
| They're hoping for one more gift. This is a matter of timing--this is the baby bells' last chance for largess from their sycophant, Martin. No matter who wins the election, I don't see Martin retaining his position. Whoever replaces him most likely won't have as much of an open-door policy for the baby bells. Somehow, I don't see anyone crying over their loss. | |
| fgoldstein
join:2003-01-21
Newton Highlands, MA
·RCN CABLE
| Reform is desperately needed! Once upon a time, "long distance" was a great luxury, a service very expensive to provide and thus used only by the rich and, as required, big business. So the consumer watchdogs of the day decided that local telephone service, the kind used by ordinary folks, should be subsidized by laying a bit of the cost of local service onto long distance calls. The Supreme Court accepted that logic in Smith vs. Illinois Bell. The year was 1930.
Between 1930 and 1981, the share of local line fixed costs allocated to interstate calls rose. The FCC in that year decided to moves towards a more cost-based rate structure, phased in from 1984 via "access rates". Initially, switched access rates -- fees paid by long distance carriers to local carriers -- were set to suck up about half of the typical retail cost of an interstate call, or about 15 cents/minute. Rural carriers got a LOT more per minute, sometimes over a dollar.
Since the Smith ruling put some of the cost of local service (nowadays set at 25%) into the interstate jurisdiction, the FCC started to align rates with costs (fixed costs with monthly rates, usage-sensitive costs with usage rates) by creating the Subscriber Line Charge, the FCC-jurisdiction fixed portion of your monthly bill. That has risen from $3.50 to over $6 in most cases nowadays. But since 1984, the per-minute switched access rate has fallen; in Bell areas it has been around 0.6 cents per side of the call. This is still way above cost though, and higher than equivalent charges for local calls, or for calls delivered elsewhere in the world (which often don't distinguish).
What the FCC needs to do is get rid of the whole idea of charging for legs of calls based on where the original call began, rather than where it's handed off for delivery. The Internet doesn't distinguish between LD packets and local ones. So the FCC is finally, after many years of hesitation, moving farther in that direction. To make up for the revenue, the ILECs, whose rates are generally covered by price caps (which are way too generous), are being allowed to raise their subscriber line charges, the part of the local rate that the FCC sets.
VoIP providers have been playing arbitrage games on this. With no firm rule in place, they don't pay the access charges that others pay. And the special low rate for ISP-bound calls has been ruled "unjustified" by the Courts. So it's long past time the FCC moved to a simpler unified intercarrier compensation scheme.
For once, Verizon is right on this point. Of course that's mainly because they, having bought MCI, are paying this out, not just collecting it! But it's still right. Basic local service should be competitive. The "terminating monopoly", the price a carrier pays to reach a given number, is not. I get my dial tone from Comcast and RCN, not Verizon, so competition now has some influence on the monthly rate. Arguing for alow SLC and higher per-minute rates is like arguing for a fixed tax on hard disk capacity. A rate per megabyte that seemed fair in 1990 surely would not now.
(But Verizon and AT&T are both wrong, wrong, wrong on wanting a per-number surcharge in place of the percentage-of-revenue universal service tax. Taxing DID numbers is nonsensical; numbers don't create cost. It would just force applications off of the network.) | |
| | nitzan
Premium,VIP
join:2008-02-27
·ViaTalk
·Comcast
| Re: Reform is desperately needed! Totally agreed. The current system is outdated and makes zero sense - there is no reason to charge a call based on where it came from - that just complicates things and artificially raises prices for everyone.
As far as per-DID USF charge I agree also- if this passes it will be devastating to many businesses that depend on cheap numbers to survive. Whoever thought about this should promptly resign.
--
Nitzan Kon, CEO
Future Nine Corporation | |
|
cant believe it
@gcstech.net
| Comp plan This again just shows you how corrupt the government is.
Martin will only do this to help his personal position and his next job. If he helps the bells, they will help him. This bill helps only the bells, and no one else. It will lower the rates that AT&T and Verizon pay to telephone companies. But do you think they will lower your toll rates? No, It puts more money in the Monopoly hands of AT&T and Verizon. Why should we put more money in the hands of giants that are already making tons of money. I just don’t get it. | |
| Ulmo
join:2005-09-22
San Jose, CA
·Comcast
·SONIC.NET
| Tax urban places? Stop shifting money. Tax rural places! Why should urban places that already pay high rates for all sorts of stuff subsidize rural places that already pay low rates for all sorts of stuff? Housing in rural places is dirt cheap compared to urban places. Urban places get something in return for higher housing costs: increased efficiencies of proximity, which directly means lower communications costs. That's the whole reason urban living is more expensive: proximity. That's for communications and commuting.
If USF is used to make rural places have cheaper communications costs, then the USF should be predicated upon an identical UHF* fee against rural homeowners and renters to offset urban housing costs, by directly paying landlords and banks that money on behand of renters and borrowers for housing. For a homeowner in rural areas that paid only $80,000 for their house, they can pay a UHF fee of approximately $1,000 per month, which would go to the pockets of renters (and homeowners) in the big cities.
Then, I'd gladly pay for part of their more expensive communications costs, which ought to be more expensive because they aren't paying for proximity.
* UHF=Universal Housing Fee | |
| | | |
|
|
Re: Carriers want higher rates...
