June 9, 2005

The rate wireless carriers pay incumbent local exchange carriers to carry traffic from base stations to mobile switching centers could go up as of July 1 without action by the Federal Communications Commission on a request to set a specific rate that large ILECs can charge for special access.

"ILECs control this critical facility, and without competition they are pricing well above economic rates, hampering independent carriers' ability to provide consumers with the benefits of intermodal competition, particularly wireless as a substitution service for landline," said Thomas Sugrue, former chief of the FCC's Wireless Telecommunications Bureau and now vice president of government affairs for T-Mobile USA Inc.

"Responding to the FCC's notice of proposed rulemaking, we support interim relief as a modest but necessary first step toward ensuring competitive pricing on these bottleneck facilities and expanding consumers options for their primary communications service."

Currently the industry is operating under an industry-negotiated agreement, known as Calls, but that is set to expire July 1.

On that day, ILECs are expected to raise their rates for special access to account for the rate of inflation. What will be missing, however, is any acknowledgement of the increased usage of their networks, known in the industry as the productivity or X factor.

"The imposition of an X factor is appropriate because an X factor historically has been used precisely to address such productivity increases.

In fact, the 5.3-percent X factor proposed in the NPRM and requested by the eCommerce & Telecommunications User Group and the American Petroleum Institute is a readily supportable interim measure both because it falls within the range of X factors that were used over the course of the Calls plan and because it is the last X factor established by the FCC that was judicially approved," said Sugrue.

T-Mobile disagrees with BellSouth Corp. that the FCC cannot impose an interim X factor because it has not completed work on the post-Calls rate for special access.

The controversy was created when it took more than three months for the NPRM to be published in the Federal Register. The comment cycle will now not close until July 12. It often takes weeks, if not months, after the comment cycle for the FCC to issue final rules.

Source: RCR News