The Problem with the Embarq Petition

Aswath,

Thank you for looking at what I sent you.  I must apologize for not making things clear.  I will ask you to revisit the Freedom2speak website.

The FCC has several petitions and actions going on simultaneously and it’s easy to lump them all together, but they deal with different aspects of what it means to provide service.

The Embarq petition has nothing to do with VoIP per se, but everything to do with Intercarrier compensation.

As you know the history of telecom was that long distance subsidized the cost of the local loop with termination charges to local terminating carriers.

Before VoIP came along the rates for these settlements were put in place.  They had much more to do with regulatory objectives than real costs, both on the local loop side and on the interoffice, interLATA, International side.

The FCC had done excellent work, at one point, harmonizing the International settlements rates and many local rate plans benefitted as well.  It is one of the key reasons bucket of minute pricing is available on all phones services.

The issue is that traffic rates for local and state termination have stayed stagnant since before the VoIP revolution.  The termination charges with these local tariff rates are out of sync with the market realities today.

Whenever there is an anomaly like this the opportunity exists for arbitrage.  The traffic that is terminating into these local carriers represent more than the volume that VoIP traffic represents and includes traffic from wireless and wireline services.  However, often the traffic origination is not known since it is coming based on clearinghouse and competitive carrier relations and may be deliberately masked for competitive reasons.

The Embarq petition would want all traffic to be terminated at the rates that were set before the advantages of fiber, VoIP and competition came into being. And the rate has no relevance to cost.  In fact, the cost of per minute billing systems is often considered not worth the hassle especially if bucket of minute pricing is applied.

The hope would be that a cohesive nationwide rate would apply based on real costs.  Major carriers are advocating bill and keep and or a nationwide rate that is in keeping with the overall market and their experience of cost recovery.

If the Embarq petition is allowed to stand the implication is that competition may again be reduced by the cost prohibitive nature of compliance with per minute billing being applied to all carriers.

Of course the legacy carriers, have these systems so the status quo will get to stay that way.  The more things change the more you get the same old POTS.

And that is the issue that Freedom2speak is all about.  Like you, Regulators see the services that “quack like a duck” and want to apply the standard rules.  The issue is that the revocation of the enhanced service provider exemption lumps everything that is displayed Freedom2speak.org as telecom.  And given how many jurisdictions are looking for someone to tax, it is going to become burdensome.  This is the point of reaching out.

Please reconsider and add your voice to show that VoIP is more than another duck.

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