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Reforming Intercarrier Compensation for Broadband

by: Sharon Gillett, Chief, Wireline Competition Bureau

April 13, 2011

[[wysiwyg_imageupload:119:height=100,width=71]]In February, the Commission took a pivotal step to reform government policy to better reflect the world of broadband today and in the future.  In adopting the USF/ICC Transformation NPRM, the Commission launched major reform of the nation’s universal service and intercarrier compensation systems, building momentum to get the job done as soon as possible.  The current system, based on a voice-centric world, actually deters investment in 21st Century Internet protocol networks.
One part of this effort will examine and learn from the actions that state partners have taken to reduce intrastate access rates – rates that service providers charge one another to complete long distance calls within a state.  By taking action to reform these charges, states further the FCC’s goals of modernizing the intercarrier compensation system for a broadband world, reducing incentives for regulatory gamesmanship, and paving the way to lower long distance and wireless rates for consumers.
To this end, I’m very encouraged by the increasing pace of state reform efforts since the NPRM was released last month.  In particular, Tennessee recently passed a law that will gradually reduce intrastate rates to interstate levels, and the State of Washington recently required CenturyLink to reduce its intrastate access rates to Qwest’s levels as part of the companies’ merger.  Tennessee and Washington join more than a dozen states, including Nebraska, Kansas, Michigan, Iowa, Texas and Georgia, that are leaders on ICC reform.  We encourage other states to take similar action to reach our common goal of modernizing universal service and intercarrier compensation to bring the benefits of broadband to everyone.  Reform of universal service and intercarrier compensation requires cooperation between the FCC and the states and we look forward to working together to get the job done for consumers.

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