Posted by: AT&T Blog Team on October 3, 2016 at 10:42 am
By Matt Nodine, AT&T Assistant Vice President of Federal Regulatory
Turning around an aircraft carrier, if done correctly, takes lead time, requires great care and precision, and depends on a large crew with a variety of skills, all working together in harmony for a common cause.
Intercarrier compensation reform (ICC) is one such ship. Wisely, the FCC began this turn in 2011 with terminating access reform, working with a broad cross-section of industry, consumer groups and policymakers to decisively steer industry away from the arbitrage and schemes of unscrupulous actors, and toward what it termed “market discipline.” With the FCC’s course set, industry charted its path toward greater competition.
Now that we are several years into the FCC’s reforms, it is time to review the state of the marketplace, assess prior reforms, identify weaknesses and address next steps. With our petition for forbearance, which we filed Friday, the FCC can begin the next phase of reform we believe will benefit consumers, increase broadband investment and improve competition.
First, some background. In the 2011 USF/ICC Transformation Order, the FCC did its work well by adopting a regulatory regime that determined that a “uniform national bill-and-keep framework” would be the “ultimate end state” for all telecommunications traffic between carriers. The FCC’s action addressed some of the worst aspects of access arbitrage on the terminating access side, including what the Commission described as “access stimulation.” These so-called “traffic pumpers,” who consistently game the system to grossly inflate providers’ costs – and consumers’ bills – by hundreds of millions of dollars annually, were finally constrained. For many carriers, terminating end office switching rates complete the bill-and-keep transition on July 1, 2017.