ICF problems disappointing for telecom

This week's announcement that the Intercarrier Compensation Forum failed to generate a consensus after 10 months of negotiations was little more than a blip on the radar screen for the news media, but it's a significant blow to a telecom industry that desperately needs a few points of agreement.

It's not that I'm a big proponent of bill-and-keep accounting, which reportedly was being pushed at the ICF meetings. Bill and keep would provide some much-desired simplicity, but not compensating carriers for using their networks to complete calls could threaten the notion of universal service to high-cost areas such as rural regions.

Still, I was eager to see what the ICF would produce, because its original membership included representatives from all facets of the telecom game: RBOCs, IXCs, CLECs, rural LECs, wireless carriers and cable operators. Getting these oft-disparate groups--particularly the RBOCs and IXCs--to agree on anything would be a big win, and I was hopeful they could provide a solution. After all, virtually everyone in the industry agrees intercarrier compensation is broken and needs to be fixed. In addition, the notion that all bits carried over the public-switched telephone network should be treated the same, regardless of protocol or place of origination, is gaining popularity.

But a consensus didn't happen. All participants agreed not to disclose details of the negotiations, but statements by Verizon and BellSouth indicate the ICF draft proposal was not ripe. Verizon questioned the plan's "political viability," while BellSouth said it was not comprehensive enough, lacking detail regarding universal-service-fund contributions and the transition to bill and keep.

In addition, some familiar with the talks noted that the plan would have required customers' basic local rates to increase and pre-emption of states' authority to set intrastate access rates--two dicey issues, particularly in an election year.

Whatever the reasons, it's a shame a deal could not be reached, as it would have been a welcome change for the telecom industry to present a united front to regulators and lawmakers on something. To be sure, intercarrier compensation is a tough issue, but it is one where there is room for agreement. If consensus can't be reached on this subject, the prospects of resolving more contentious issues seem dim.

And that's bad news for those who hope the next rewrite of the Telecom Act will proceed more smoothly than the 1996 version.

E-mail me at djackson@primediabusiness.com.