Inflexion seeks access-charge exemptions from FCC

VoIP provider Inflexion has filed a petition with the FCC seeking a declaratory ruling that would exempt the company’s ExtendIP offering to "underserved" areas from paying access charges to incumbent carriers that company officials claim make phone service too expensive for customers in these markets.

Inflexion’s goal is to provide VoIP phone service for less than $10 per month, according to CEO Dwayne Goldsmith, who noted in a Tuesday conference call that current universal-service efforts have left 5% of the public without landline phone service.

However, this goal cannot be achieved if Inflexion has to pay access charges, said Inflexion Chief Technology Officer Dan Berninger, formerly of Pulver.com. For instance, if the FCC adopts the 1-cent-per-minute access fee being proposed, Inflexion would have to pay almost $10 per month to incumbent carriers for each user who makes 30 minutes worth of calls per day, he said.

In a subsequent interview, Berninger acknowledged that most ExtendIP users would not have to pay origination access charges and that Inflexion—or its CLEC carrier—would receive some compensation on calls to ExtendIP customers, although those would be charged at much lower reciprocal compensation rates.

Goldsmith said he wants to know "what happened to the $300 million" in access charges collected by ILECs that were supposed to be used to help provide affordable rates to the nation’s underserved population. When asked whether access fees were assessed were designed to offset below-cost rates for basic local service, Goldsmith—a former president for SBC Ameritech—said it is "fallacy" that incumbent carriers lose money on local service.

Instead, Goldsmith said , access fees are causing phone service to be unaffordable to "the exact people they are supposed to help. Goldsmith said Inflexion is willing to pay reciprocal-compensation charges. Berninger said Inflexion’s petition differs from the AT&T’s petition for access-charge exemption because it is targeted for services offered to the "underserved" population.

In its petition, Inflexion seeks an exemption from access charges when it "directly or indirectly serves periphery markets defined as regions with an aggregate telephone density below the national average, low-income consumers, other authorized recipients of state or federal [Universal Service Program] grants and discounts, and entities that in turn provide service to the target population."

Berninger said the definition is broad, but the goal is to reach 99.9% of all Americans. In terms of the entities serving the underserved population, that could include enterprises as large as the city of Detroit, which "has enough money to pay its bills but … could use more affordable phone service."