Battling Telephone Companies In Preliminary Agreement On Access Fees

Group hopes to establish a payment structure for the fees telephone companies charge each other

August 18, 2004

2 Min Read
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A group of telephone companies is making some progress with a preliminary plan for a payment structure for the fees telephone companies charge each other, which has been a contentious issue for years.

Called the Intercarrier Compensation Forum, the group includes a former regional Bell operating company (RBOC), SBC Communications, as well as long distance giants AT&T and MCI. The three remaining RBOCs -- BellSouth, Qwest, and Verizon -- have all dropped out of the Forum. The RBOCs and the long distance firms have been in bitter contention over the access fees the RBOCs charge the long distance firms to connect to their local networks.

Of note in the latest proposal is a provision that would permit the RBOCs to raise consumers' monthly phone bills, according to media reports.

"They still have a long way to go," said Pete Wilson, president and CEO of telephone consultancy Telwares Inc. "It's going to be like trying to solve world hunger. I don't think it's going anywhere without Verizon and BellSouth."

Indeed, many of the telephony issues addressed by the Forum have defied solution ever since the old AT&T was broken up two decades ago.The myriad of issues to be addressed includes the resolution of universal phone service supported by the Universal Service Fund that provides service primarily in rural areas. Access fees are due to increase so sharply that AT&T and MCI are taking steps to vacate consumer markets entirely. The Forum's proposal -- neither public yet nor submitted to the FCC -- is said to pave the way for an increase in monthly phone charges.

"AT&T and MCI and Sprint -- (long distance providers) -- are most desperate to get something enacted," said Wilson, who also noted that SBC, the lone RBOC participant in the Forum has been the most aggressive RBOC in rolling out long distance.

Traditional telephone companies are also being pressured by the spread of cell phones and VoIP, Wilson said. Neither cell phone providers nor VoIP firms are required to contribute to the universal fund, he added.

Other members of the Intercarrier Compensation Forum include Sprint, General Communication Inc., Global Crossing North America, Iowa Telecom, Level 3 Communications, and Valor Communications LLC. BellSouth and Verizon withdrew from Forum talks in May.

The Washington Post reported that the Forum intends to submit its proposal to the FCC within two weeks. Preliminary pieces of the proposal that have leaked out have caused the FCC to be hopeful while consumer groups have been negative, particularly over the prospect that telephone charges to consumers are slated to increase in the proposal.0

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