NECA TARIFF COULD STIFLE VIDEO DEPLOYMENT

A National Exchange Carriers Association tariff—one conceived in an era when ATM switches were only used for data services—could prevent some of the smallest telcos in the U.S. from deploying video over their copper plant.

NECA's ATM-CRS tariff, which is applied to telcos using ATM connections to bring video from a content aggregator to a local central office, already has halted Central Utah Telephone from rolling out video services. The company already had completed marketing studies and made vendor selections, said Steven Clark, director of marketing and community development for Central Utah.

NECA has a separate tariff for telcos using an Ethernet connection, but it's still fairly expensive. According to Clark, if the company paid the tariff exactly as it is written, it would add $13,000 per month to the cost side of the equation.

The tariff was designed originally for rural carriers providing DSL services at lower speeds than are required to offer video.

“We can pay this tariff for DSL, and we can recoup our cost,” said Clark. “The tariff that they're talking about here is different because of what it takes to get video as opposed to DSL.”

For its part, NECA recognizes that there is a problem. The association is in the process of balancing the needs of its members to recoup their costs against the desire of some of them to provide video over DSL, according to Victor Glass, director of demand forecasting and rate development with NECA.

“Our ATM connection charge is probably making the video business less profitable,” Glass said. “These connection charges are roughly comparable to the Bell operating company charges because the equipment is basically the same. In rural areas, though, the cost per customer is going to be high.”

For some carriers that participate in NECA pools, the charge is difficult to handle but not prohibitive to deploying video. Additionally, some have found ways around the tariff by setting up separate unregulated subsidiaries. Others have simply decided that the tariff only impacts interstate traffic, and therefore does not apply to video transport.

For Central Utah, however, the threat of running afoul of NECA is significant enough that the carrier is waiting for a tariff revision. “Until it's revised, we're dead in the water,” Clark said.