From: Justin Hannah [email@example.com]
Sent: Tuesday, December 02, 2003 1:39 AM
Subject: VoIP Forum comments - Why not just regulate recip compensation?
I don't see the purpose of addressing residential VoIP applications such as Vonage for a variety of reasons, but the bells have enough to worry about with CLECs, Wireless number portability, and so forth. Sure, there needs to be a way to do E911 reliably, and USF if anything will go by the wayside if telecom was allowed to become cheaper. As far as accessability for the deaf and blind... This is the internet- they have EMAIL, and theres plenty of gateways from the internet to phones utilizing web sites. It isn't the telecom service providers fault if a company installs non-compliant hardware at their facility. Thats a completely moot issue for regulatory consideration as a whole.
The real bottom line here is that carriers are using VoIP to carry long distance traffic (especially intrastate in many cases) and dumping them off as local calls so that they can avoid higher termination/origination rates solely because of recip compensation, unfortunately in the process making the government lose millions in revenue from taxes and contributions. If you want to fix the source of this problem at the heart, simply flatten the rate of or get rid of the recip compensation to begin with and disallow ITCs and CLECs from charging astronomical rates and the whole problem will go away. Then there will be no real advantage of using VoIP for them and it will make competition even better for wholesale and retail long distance. They are all doing it because otherwise they would have to charge $.03-$.05/min to their wholesale customers which are going to LCR that call somewhere else instead, when RBOC costs half a cent or less.
Now with wireless number portability it couldn't be any more vital for this to happen. If long distance carriers are routing calls by NPA/NXX instead of OCN, they will be filing bankruptcy left and right for numbers that got ported out from landline to wireless telephones. If you flatten compensation across the board it will solve that problem too. Querying LIDB to find out what the terminating LEC is costs you per query which would make the cost of long distance completion go up.