May 19, 2005

CTIA plans to tell regulators next week that all distinctions used in determining how much carriers pay each other should be eliminated.

"Different rates apply to different carriers," said Paul Garnett, CTIA director of regulatory policy. "The first reason the intercarrier compensation is broken is because of all of these regulatory distinctions."

CTIA briefed reporters during a press luncheon Wednesday about a proposal it will present to the Federal Communications Commission Monday.

The FCC is currently examining the various revenue mechanisms for carriers with different sets of rules for the ways carriers compensate each other to carry traffic and the universal service fund.

Intercarrier compensation comes in two forms: access charges for long-distance calls and reciprocal compensation for local calls.

Rural local exchange carriers rely heavily on access charges as a major revenue source. The other major source of revenue for RLECs is universal service.

The FCC is also considering changes to the universal-service system. It is unclear whether intercarrier compensation can be changed without changes to universal service and vice versa.

Universal-service subsidies and access charges are under increasing pressure as telecom evolves from a circuit-switched wired world to one where calls are connected without wires and without switches, and the distinction between local and long distance is shrinking.

Source: RCR News