Denying AT&T VoIP petition is the right move

By most accounts, the FCC is prepared to deny AT&T's petition for a declaratory ruling that would exempt calls carried over the IXC's IP backbone from access charges, although one source informed me it seems unlikely an order will be issued today.

While there has been industry consensus that voice-over-IP calls should be treated with a light regulatory touch, that position generally assumes the call is originated or terminated at a VoIP phone.

But that's not the case with the AT&T petition, which addresses calls between two phones on the public-switched telephone network (PSTN) that are transported over AT&T's IP backbone at some point in between. There are no service enhancements provided to the customer, other than a possible price break available because AT&T is paying much cheaper reciprocal-compensation rates rather than interstate and intrastate access charges to have the calls completed.

With this in mind, denying the AT&T petition based on existing rules governing access to the PSTN makes sense--in fact, not doing so would open a Pandora's box of other potential regulatory-arbitrage games based on protocol changes. The big question is whether AT&T should have to pay several hundred million dollars in access charges retroactively if its petition is denied. It's a legitimate argument, but I wouldn't address it if I were an FCC commissioner. Let the carriers fight that issue in court, where the matter almost certainly will land, even if the commission ruled on the point.

When ILECs upgrade their last-mile networks, many believe all-IP calls would not be subject to the access regime. One argument AT&T makes that has merit is that it is unfair it cannot realize much of the economic benefit of upgrading its backbone to an IP infrastructure until ILECs upgrade their last-mile networks--something outside of AT&T's control.

Regardless of the FCC's ruling, the consternation surrounding the AT&T petition underscores a notion reiterated in this space often during the past several months: a unified intercarrier-compensation regime is desperately needed. If access-charge differences based on distance were removed from the equation, most of the VoIP proceedings currently before the FCC would be moot.

E-mail me at djackson@primediabusiness.com