Posted by: Hank Hultquist on November 24, 2010 at 12:54 pm
In recent blogs I have explored: (a) the FCC’s absurd practice of regulating the structure of long distance pricing even as long distance is rapidly vanishing as a distinct consumer service; and (b) the foolishness of extending obsolete interconnection rules to IP networks.
Today, I will try to tie these seemingly distinct modes of transportation together and, in so doing, explain how the FCC can finally put this industry on the road to rationality.
It is axiomatic that interconnection on the telephone network (a.k.a., the PSTN) has become an upside-down world of inefficiencies and arbitrage. This entire system is built on a series of arbitrary rules and assumptions that have long been overtaken by reality.
We have a system that entitles service providers to file tariffs pursuant to which they can unilaterally extract payments from other service providers for “terminating” calls from those other service providers’ customers. To make matters worse, and despite the fact that the functions performed in “terminating” all calls are identical, the applicable rates can vary greatly depending on whether a call is “local,” “intrastate long distance,” or “interstate long distance,” or dialed from a mobile smartphone, skyped from a laptop or placed from the dusty home “landline.”