FCC Generally Stays the Course on ISP Rate; Seeks Further Comment on Universal Service and Intercarrier Compensation Reform
On Nov. 5, 2008, the Federal Communications Commission (FCC) adopted its Order on Remand, Report and Order, and Further Notice of Proposed Rulemaking1 (respectively, “Remand Order,” “Report and Order” and “FNPRM”) addressing reciprocal compensation for ISP-bound traffic and high-cost universal support reform, and seeking comment on intercarrier compensation and universal support.
The Remand Order largely continues the current system for intercarrier compensation for ISP-bound calls, but the FNPRM proposes sweeping revisions in the fundamental areas of intercarrier compensation and universal service. Comments for the FNRPM are due 14 days after publication of the FNPRM in the Federal Register, which has not yet occurred. Reply Comments are due seven days after that date.
The following advisory summarizes the primary discussion points in the Remand Order and the Report and Order and the issues raised in the three proposals on which the FCC seeks comment in the FNPRM. Davis Wright Tremaine has been participating in this proceeding on behalf of its clients and will continue to do so. Please let us know if you would like further information regarding the Orders and FNPRM or if we can assist you.
Remand Order: ISP-bound traffic
Intercarrier compensation for ISP-bound traffic has been controversial for more than 10 years. In 1996, the FCC originally ruled that reciprocal compensation under Section 251(b)(5) applies only to “local” traffic. Shortly thereafter, disputes arose in the industry over whether calls to ISPs, which in some sense continue on into the Internet, beyond any “local” area, were eligible for compensation. In 1999, the FCC ruled that ISP-bound calls were not “local” on the grounds that such traffic was jurisdictionally interstate (again, based on the continuation of the traffic into the Internet), but generally permitted compensation for such calls to continue. In 2000, the D.C. Circuit vacated that ruling and remanded the matter to the FCC, holding that the jurisdictionally interstate nature of the traffic did not control its treatment for purposes of intercarrier compensation.2
In 2001, the FCC issued the ISP Remand Order, which again ruled that Section 251(b)(5) did not apply to ISP-bound traffic, this time on the theory that such traffic was “information access.” The FCC reasoned that Section 251(g), which continued prior compensation obligations for exchange access (in connection with long distance calls) and information access, limited the reach of Section 251(b)(5).
At that time, the FCC established the present regime under which compensation for ISP-bound calls is capped at $0.0007/minute. In 2002, the D.C. Circuit rejected the FCC's idea that Section 251(g) limited Section 251(b)(5), but allowed the compensation regime to remain in place.3 The court then remanded the matter to the FCC for further action, which was not forthcoming. Eventually, Core Communications sought and obtained a mandamus ruling from the D.C. Circuit directing the FCC to issue an order justifying its compensation regime, or else that regime itself would be vacated.4
The Remand Order is the result of that mandamus ruling.
The Remand Order
Acknowledging the D.C. Circuit's rejection of its Section 251(g) rationale, the FCC concluded that Section 251(b)(5) covers all telecommunications, including, specifically, ISP–bound traffic. The FCC specifically reaffirmed its finding from the 2001 ISP Remand Order that Section 251(b)(5) is not limited to “local” traffic (a holding that has not been well-respected by many courts and state regulators considering this issue).
Additionally, the FCC rejected a number of arguments that would exclude ISP-bound traffic from Section 251(b)(5). First, the FCC rejected the idea that section 251(b)(5) applies only to traffic exchanged between LECs, noting that it had previously rejected that argument in its 1996 Local Competition Order5 and that “[w]hile Section 251(b)(5) indisputably imposes the duty to establish reciprocal compensation obligations on LECs alone, Congress did not limit the class of potential beneficiaries of that obligation to LECs.”6
The FCC also rejected arguments that that ISP-bound traffic is not eligible for reciprocal compensation because the pricing standards in Section 252(d)(2)(A)(i) contemplate a compensation for calls between only two carriers (an originating and terminating provider) and because ISP–bound is not “terminated” at the ISP. The FCC found that the pricing standards in Section 252(d)(2) do not limit the scope of Section 251(b)(5) and that calls to ISPs fit within the FCC's definition of termination.”7
To specifically address the D.C. Circuit's order to provide the legal justification for its adoption of federal pricing rules governing intercarrier compensation for ISP-bound traffic, the FCC found that its general jurisdiction over interstate traffic, under Sections 201 and 202 of the Act, can and does co-exist with the obligation on LECs to provide reciprocal compensation arrangements, applicable to all “telecommunications,” under Section 251(b)(5).
Because it is undisputed that ISP-bound traffic is jurisdictionally interstate, the co-existence of Sections 201 and 202 and Section 251(b)(5) jurisdiction permits the FCC to establish a compensation regime, under Section 251(b)(5), for this interstate traffic. In addition, Section 251(i) “affirms that the Commission's preexisting authority under Section 201 continues to apply for purely interstate activities.”8
This intercarrier compensation system will remain in place until more comprehensive intercarrier compensation rules are adopted.
Report and Order: reform of high-cost universal service
The federal Universal Service Fund supports four universal service programs: high cost, rural health care, low income and schools and libraries. The high-cost program supports the provision of services to rural and high-cost areas. It has historically been the program that receives the highest level of funding, and currently accounts for half of all universal service funding. It has been the target of multiple efforts in recent years to try to contain the costs of the program while at the same time expanding the services it subsidizes.
State Joint Board on Universal Service recommended last year that the FCC restructure the distribution mechanisms into three new funds: a provider of last resort fund, a mobility fund, and a broadband fund. As the names of the last two proposed mechanisms suggest, the Joint Board recommended that mobile and broadband services be subsidized in rural and high-cost areas.
It also recommended a $4.5 billion cap of the high-cost fund, which would have capped funding at the approximate level of funding in place in 2007. The Joint Board also recommended eliminating the “identical support” rule, under which a competitive carrier qualifying for funding (a competitive eligible telecommunications carrier (CETC)), currently receives the same level of funding as the incumbent eligible telecommunications carrier (“incumbent ETC”) in a given service area. Instead, this proposal would give the CETC funding based on its own demonstrated costs. Finally, the Board recommended exploring the use of auctions as a new way to distribute funding, rather than funding based on cost analyses.
In the Report and Order the FCC declined to implement the Board's recommendations. However, many of the recommendations (or portions of them) appeared in the three competing proposals attached thereto and thus, these recommendations are teed up for Commission action in the near future.
Further Notice of Proposed Rulemaking
The FNPRM seeks comments on three different proposals, two of which address reform of intercarrier compensation, and all three of which address reform of universal service. All of these proposals arose from intense negotiation and discussion among the Commissioners during the three weeks leading up to the Commission's Nov. 4, 2008, open meeting.
The first proposal, the “Chairman's Draft Proposal,” was originally circulated to the Commission Oct. 15, placed on the Commission agenda for the Nov. 4 meeting and subsequently removed from the agenda. The second proposal is a “Narrow Universal Service Reform Proposal” (“Narrow Proposal') first circulated to the Commission on Oct. 31, 2008. The “Alternative Proposal” was first circulated the evening of Nov. 5, 2008, and incorporates certain changes to the Chairman's Draft Proposal suggested by the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPATSCO), CTIA and The Free Press, primarily with respect to reform of high-cost universal support.
The fate of these proposals is unclear, at best, given the clear lack of unanimity by the five FCC Commissioners. In a public statement released with these proposals, Chairman Kevin Martin expressed displeasure with his colleagues' decision to delay implementation of these comprehensive reform proposals. For this reason, and others, it is possible that further action on these items could occur at the FCC's meeting scheduled for Dec. 18, 2008.
Although unanimous support for these proposals remains elusive, four of the five Commissioners (excluding Chairman Martin) released a joint statement indicating that they believe there exists a “tentative but growing measure of consensus” on a number of issues, including: (1) moving intrastate access rates to interstate access levels over a “reasonable period of time;” (2) preventing consumer rate increases resulting from reductions in carrier access charges; (3) addressing so-called phantom traffic and traffic pumping arrangements; (4) the creation of an alternative cost recovery mechanism; and, (5) eliminating the identical support rule. Accordingly, any near term reform proposals that are ultimately approved would likely address, at the very least, these core issues.
Proposals on reform of high-cost universal service support
There are three different proposals to reform high-cost universal service support in the FNPRM. The Chairman's Draft Proposal puts forward the following proposed reforms to the high-cost fund:
- The overall size of the high-cost fund would be permanently capped at the December 2008 level (annualized, and net of prior or past period adjustments), which would, in effect, limit the contribution requirements necessary to support this program.
- The identical support rule, which provides that CETCs receive support for each of their lines based on the per-line support the incumbent LEC receives in the service area, would be eliminated.
- Incumbent ETCs would continue to receive December 2008 levels of funding (annualized and net of any prior or past period adjustments) if the ETC commits to offer broadband Internet access services to all customers within the “study area” within five years. If the incumbent ETC does not make this commitment for a particular study area, the funding would be transferred to the winner of a reverse auction that commits to deploy broadband, and to take on carrier of last resort obligations within 10 years.
- CETCs would receive high-cost support at December 2008 levels, as long as they make the same commitment to offering broadband services in the service area within five years, and can demonstrate that their own costs exceed certain benchmarks. This is different than the current methodology where the CETC automatically gets the same amount of support as the incumbent ETC regardless of its costs. CETCs would file December 2008 cost information on a service area basis for purposes of developing per line costs. The FCC would then compare these per line costs against the benchmarks used for incumbent ETCs to determine whether the CETC is eligible for high-cost funding.
- ETCs may use any technology, except satellite technology (for which the carrier would be required to obtain a waiver from the FCC). They may also partner with other entities to provide the services.
- Providers operating in Alaska, Hawaii and U.S. Territories and Possessions would be exempt from the proposed reforms due to the different cost considerations and would be addressed in a subsequent proceeding.
The second proposal—the Narrow Proposal—is a focused proposal that seeks two major reforms: (1) a cap on the high-cost fund; and (2) reverse auction mechanisms for both incumbent ETCs and CETCs, abandoning cost-based methodologies for calculating high-cost support. Unlike the Chairman's Draft Proposal, the Narrow Proposal would cap the total high-cost fund at 2007 levels. Although there are some differences between the auction mechanisms in the Chairman's Draft Proposal and the Narrow Proposal, in general, both propose reverse auctions in which the bidder asking for the lowest amount of subsidy to serve the incumbent study area would generally win the right to receive funding for that area.
The bidder's proposed level of funding would determine the level of funding to be awarded, but the FCC would establish a “reserve” price—a maximum level of high-cost support that participants would be permitted to bid. In the Narrow Proposal, the reserve price would be the level of support received by the incumbent ETC for 2007 for that study area, whereas in the Chairman's Draft Proposal, it would be the current level of support.
The bidder would be required to provide all supported services on a carrier of last resort basis throughout the entire auctioned study area, a requirement which is often imposed on incumbents under state law. Transfer of funding from an incumbent ETC to any new provider winning a reverse auction would be phased in on a sub-study-area basis, and requiring the new provider to reach annual milestones during a 10-year build out period.
Like the Chairman's Draft Proposal, the Narrow Proposal would also eliminate the identical support rule, and would exempt providers in Alaska, Hawaii, or any of the U.S. Territories or Possessions from changes in the disbursement of funding to them.
The Alternative Proposal is quite similar to the Chairman's Draft, but contains modifications which are more “ILEC friendly.” One of the most significant changes is that CETCs would see their existing funding eliminated in 20 percent increments over five years. Reverse auctions would be held for any areas for which the incumbent ETC fails to certify that it will provide broadband services within five years. Auction winners would be required to provide such services throughout the service area. Finally, the Alternative Proposal treats rural rate-of-return incumbent carriers a bit differently in that their funding would not be affected until 2010, at which time their support levels would be frozen.
Proposal on broadband for Lifeline/Link Up customers
Under the Chairman's Draft Proposal, the FCC would establish a Broadband Lifeline/Link Up pilot program (“Pilot Program”), pursuant to Section 254(b) of the Act, to support the provision of broadband Internet access service and the devices used to access this service for low-income Americans.
The Pilot Program is based, in part, on Section 254(b)(3), which provides that “low-income consumers … should have access to … advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates charged for similar services in urban areas.” The Chairman's Draft Proposal explains that access to broadband Internet access service is particularly important to low-income consumers for purposes of education, public health, and public safety.
Under the Pilot Program, the FCC would make $300 million available each year for the next three years to increase the broadband subscriber rate for low-income customers to over 50 percent.
Support for the Pilot Program would be limited to one subsidy per household. The FCC would not require state or carrier matching requirements. ETCs participating in the Pilot Program would have to offer broadband Internet access service with download speeds equal to or greater than 768 kbps and upload speeds greater than 200 kbps. Participating ETCs would be eligible for the following support: (i) 50 percent of the cost of broadband Internet access service installation, including a broadband Internet access device (i.e., a laptop computer, a desktop computer or handheld device), up to a total of $100; and (ii) double the current monthly subsidy for the Lifeline subscriber up to $10 per month. Support for the Pilot Program would be disbursed on a “first come, first served basis” to ETCs with service areas in any state where priority and compliance with program eligibility is established.
Participating ETCs would have to file reports with Universal Service Administrative Company (USAC) on a monthly basis and would also be subject to audit by the FCC's Office of Inspector General. The FCC would retain the discretion to evaluate the uses of monies disbursed through the Pilot Program and to determine on a case-by-case basis whether waste, fraud, or abuse of the program fund occurred and whether recovery would be warranted.
The proposals for Broadband for Lifeline and Link Up customers are the same under both the Chairman's Draft Proposal and the Alternative Proposal, and are not addressed in the Narrow Proposal.
Proposal on reform of universal service contribution
All three proposals contain largely similar proposed universal service contribution methodologies. Each seeks to adopt a competitively-neutral contribution method that ensures a specific, predictable sufficient funding source that is less difficult to manage than the current system. The proposals suggest changing contributions made by residential end-users to a monthly, flat rate and business end-users to a connection-based methodology9 that will be implemented under each of the proposed methods, beginning Jan.1, 2010.
Each of the three proposals suggests that the new contribution methodology for residential end-users should be a numbers-based methodology under which each contributor will pay a constant, flat-rate assessment based on the “Assessable Numbers” (i.e., phone numbers) providers have assigned to residential end users. The Chairman's Draft and Alternative Proposals both set that assessment at a fixed rate of $1 per residential number per month. The Narrow Proposal suggests a lower fixed-rate assessment of $0.85 is appropriate.
Business end-users would contribute to the universal service fund on a connection basis, and the Commission seeks comment on implementation of that methodology. Under the Chairman's Draft and Alternative Proposals, providers of business services will continue to contribute based on interstate and international revenues for these services until such time as a new connections-based assessment methodology is created. The Narrow Proposal suggests that the methodology for contribution for business end-users should be $5 per Assessable Connection up to 64 kbps, and $35 per Assessable Connection over 64 kbps.
Each of the proposals also provides for an alternative, limited modification to the contribution method for prepaid wireless plans to account for the unique characteristics of the service and subscribers. This modification bases contribution on the user's actual number of minutes used in any given month, compared to the average number of minutes used by all prepaid wireless plans of a carrier in any given month. The discount also caps the contribution for each wireless prepaid plan at the otherwise applicable residential rate (e.g., $1 under the Chairman's Draft and Alternative Proposals and $0.85 under the Narrow Proposal).
Exceptions to contribution obligations:
Commenters proposed a number of exceptions for the contribution obligation including those for low volume users, telematics providers and paging providers and additional handsets under wireless family plans. All three proposals largely rejected adopting exemptions, noting that doing so would complicate administration and may unfairly burden or advantage certain groups. The only exception adopted by all three proposals was for Lifeline service customers. In addition the Chairman's proposal would exempt stand-alone voice-mail boxes (which offer free voice-mail access to “phone-less” people) from the contribution.
Reporting requirements and transition timeline:
Under the new contribution methods, contributors will report their Assessable Number counts on a monthly basis and will be required to report any Assessable Number that is in use by an end user during any point in the relevant month. The Commission will develop an additional version of the FCC Form 499 for use in reporting Assessable Numbers. On an interim basis, contributors to the business revenue-based reporting component will report their revenue information on the modified FCC Forms 499-A and 499-Q.
The proposals all suggest a 12-month transition period for the new contribution mechanisms, during which time contributors will continue to report and contribute on a quarterly basis. However, beginning in July 2009, contributors will also begin filing monthly reports of Assessable Numbers with USAC and quarterly reports of their business customer revenues.
Proposals on reform of intercarrier compensation
The FNPRM seeks comment on two proposals for intercarrier compensation reform, one in the Chairman's Draft Proposal and a second one in the Alternative Proposal. The two proposals are almost identical. The following is a summary of the Chairman's Draft Proposal. The few differences in the Alternative Proposal are highlighted below.
The FCC is considering a 10-year transition to a “uniform” intercarrier compensation regime under which all traffic that a telecommunications carrier hands off to another carrier for termination would be subject to a single, low rate. Each state would establish a statewide rate that would apply to all local carriers terminating traffic within that state. The FCC proposes a cost methodology that would lead to a very low per-minute rate—below the $0.0007/minute rate for ISP-bound (and other) traffic today.
The transition plan is a bit complicated, but the key points are as follows:
Years from Effective Date
Intrastate access rates reduced by one-half the excess of such rates over interstate access rates
Intrastate access rates reduced to interstate access rates; state regulators must set interim uniform rate for that state
Carriers must move rates (inter- and intrastate access, reciprocal compensation) one-half way down to interim uniform rate for that state
Carriers must move rates (inter- and intrastate) the rest of the way down to the interim uniform rate for that state
States must set final uniform rate for that state using FCC's new methodology, and must establish a “glide path” under which all carriers will charge the final uniform rate by the end of year 10
Carriers are never authorized to raise any rate. If an existing rate is below the applicable ceiling, that lower rate will remain in effect until the gradually lowering maximum permitted rate sweeps it up. For example, if a carrier's reciprocal compensation rate is below the interim uniform rate set by the end of year two, that rate will not increase. In practical terms for Commercial Mobile Radio Service providers, since such entities may not now charge terminating access, they will not be permitted to do so until the end of year 10, when a permanent, uniform intercarrier compensation rate is implemented.
The maximum rates set by the state apply to all carriers in the state—large incumbent LECs, rural LECs, and competing LECs.
The ISP-bound calling rate of $0.0007, along with the “mirroring rule” (which requires ILECs who choose to pay only $0.0007 for ISP-bound traffic they send to a CLEC, to accept only $0.0007 for traffic the CLEC sends to them) is retained, again noting that the FCC expects the final rate to be even lower than that.
Also, by the conclusion of the 10-year phase-in, the only intercarrier compensation payments would be for call termination. No call origination charges would be allowed.
New cost standard:
Today's reciprocal compensation rates are set using the FCC's “TELRIC” standard, which tries to estimate how much it would cost, on average, for an efficient firm with the latest technology to terminate a minute of traffic. Under the TELRIC standard, a portion of the terminating LEC's overhead costs, as well as a portion of the costs of items (such as switch memory) that is used in common with other functions, are included.
The FCC has concluded that the TELRIC standard produces rates that are too high for intercarrier compensation purposes. As a result, it proposes to adopt a more stringent cost standard, named for economist Gerry Faulhaber, which estimates the “additional cost” of performing call termination as follows: (1) estimate the costs the firm would incur using efficient, forward-looking technology, to provide all the services it provides today; (2) estimate the costs the firm would incur using efficient, forward-looking technology, to provide all the services it provides today, except for call termination; and (3) take the difference between (1) and (2); this is the “additional cost” of call termination.
Essentially by definition, this cost standard excludes all overhead costs, and all (or virtually all) common costs. The result will be a per-minute cost of call termination notably lower than the $0.0007 rate now used for ISP-bound calling.
States would not be required to actually apply this methodology until, at the earliest, four years from the effective date of the new system.
Revenue recovery opportunities:
End-user rates: Recognizing that carriers will receive less revenue under this new system, the FCC proposes increases in the subscriber line charge (SLC), from $6.50 to $8 for primary residence lines; from $7 to $8.50 for second lines and single-line business; and from $9.20 to $11.50 for multi-line business. Assuming that intrastate end user rates and intrastate SLCs are at the permitted maximum, the FCC will even allow interstate SLC increases to make up for lost intrastate access revenues.
Universal service payments: Some LECs receive intercarrier compensation payments (access charges, etc.) well above what would be the new maximum permitted rates. The FCC proposes to allow ILECs to receive increased universal service support to make up for some of those lost revenues in some situations. Under the Chairman's Draft Proposal, before additional USF support would be available, the ILEC must first be charging the maximum permitted interstate and intrastate SLC, and also be charging the maximum permitted intrastate end user rates.
For price cap ILECs, any need for additional revenues would be assessed based on the entity's total revenues—both regulated and non-regulated. For rate-of-return ILECs, only regulated revenues would be considered. The Alternative Proposal would provide more flexibility for rate-of return ILECs to receive USF support.
Network interconnection architecture:
The FCC proposes to adopt a variant of the network interconnection architecture proposed by Verizon and AT&T. Specifically, the new, low intercarrier compensation rate applies at called party's network “edge.” This is an end office or equivalent, unless the called party uses a tandem (which essentially all large ILECs do), in which case the tandem is the edge. This proposal, if adopted, would essentially eliminate the economic basis for direct end office interconnection.
Under the proposal all originating carriers would apparently be obliged to deliver their outbound traffic to the terminating carrier's “edge.” This is different from the position asserted by certain ILECs today which demand that a competitive provider “pick up” ILEC originating traffic at the ILEC switch and transport it to that provider's switch. The Alternative Proposal would limit rural carriers' obligations to deliver their outbound traffic to its meet point—even if that is not all the way to the terminating carriers' edge.
The calling network may choose to interconnect directly or via a third-party carrier. (Under one of the FCC's alternatives, there would be a special accommodation for rural ILECs in some circumstances involving extended area calling arrangements.)
The legal basis for the FCC's proposal is Sections 251(b)(5), 251(g), and 252(d)(2)(A)(i) of the Communications Act. Section 251(b)(5) calls for LECs to provide reciprocal compensation for the transport and termination of “telecommunications,” without regard to whether it is local or long distance, interstate or intrastate, etc.
Therefore, the FCC reasons, Congress intended the “additional cost” standard of Section 252(d)(2)(A)(i) (which governs reciprocal compensation under Section 251(b)(5)) to apply to any traffic being delivered to a LEC. Section 251(g) retains old-style access charges (both originating and terminating), but only until the FCC itself chooses to modify them—which it would do with this proposal. By the same token, under normal procedures under Section 252, states, not the FCC, are required to establish specific rates under Section 251(b)(5), so the FCC leaves that function to state regulators.
Status of PSTN-IP traffic:
The FCC proposes to find that all services that originate calls on the PSTN and terminate them on an IP network, or vice-versa, are “information services,” due to the “net protocol conversion” that occurs for such services. There is no particular reason for the FCC to make this finding in this context, in that it does not affect the overall intercarrier compensation analysis in any way. It is rumored that such a declaration would allow ILECs to deny interconnection rights to VoIP providers, including cable operators offering VoIP services, since interconnection rights under Section 251(c)(2) extend only to “telephone exchange service” and “exchange access” traffic. We expect substantial comment on this aspect of the proposal.
Guidance regarding small carriers: Under Section 251(f)(2) states are authorized to exempt certain small carriers from their normal interconnection and reciprocal compensation obligations in some circumstances. The FCC proposes to urge states to apply careful scrutiny to any such requests, and proposes to require that if any exemption from normal interconnection obligations is granted for a period longer than a year, it must be affirmatively renewed by the state on a yearly basis. Note that this “guidance” does not apply to purely “rural” ILECs, who are partially exempted from normal interconnection obligations under Section 251(f)(1).
Effect on existing contracts: The proposal would be a change in law, so normal interconnection agreement provisions permitting modification when the law changes would apply. If carriers are operating under an “evergreen” interconnection agreement with no change of law provision, the carriers are entitled to a “fresh look” so renegotiation and re-arbitration is expected. Commercial contracts, however, are not subject to this “fresh look” ruling.
Billing practices: The FCC would ban carriers from stripping or altering call identifying information from the call signaling data carriers exchange. Also, if a carrier delivers traffic without call identifying information, the delivering carrier must pay the terminating carrier's highest applicable termination rate. This is true even if the delivering carrier is merely transiting traffic from a third party. In such cases, however, the delivering carrier is expressly authorized to bill the third party for any termination fees.
1 High-Cost Universal Service Support, Federal-State Joint Board on Universal Service, Lifeline and Link Up, Universal Service Contribution Methodology, Numbering Resource Optimization, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, Developing a Unified Intercarrier Compensation Regime, Intercarrier Compensation for ISP-Bound Traffic, IP-Enabled Services , WC Docket No. 05-337, CC Docket No. 96-45, WC Docket No. 03-109, WC Docket No. 06-122, CC Docket No. 99-200, CC Docket No. 96-98, CC Docket No. 01-92, CC Docket No. 99-68, WC Docket No. 04-36, Order on Remand and Report and Order and Further Notice of Proposed Rulemaking, FCC 08-262 (rel. November 5, 2008) (“ Order ”).
2 See Bell Atl. Tel. Cos. v. FCC , 206 F.3d 1 (D.C. Cir. 2000).
3 WorldCom, Inc. v. FCC , 288 F.3d 429 (D.C. Cir. 2002).
4 In re Core Communications, Inc. 531 F.3d 879 (D.C. Cir. 2008).
5 Implementation of the Local Competition Provisions in the Telecommunications Act of 1996 and Interconnection between Local Exchange Carriers and Commercial Mobile Radio Service Providers, CC Docket Nos. 96-98, 95-185, First Report and Order, 11 FCC Rcd 15499 (1996) (subsequent history omitted) (“Local Competition Order ”).
6 Order at ¶ 10. This statement should be useful for CMRS providers and other non–LECs that are defending against demands for reciprocal compensation under section 251(b)(5).
7 Local Competition Order, 11 FCC Rcd at 16015 ¶ 1040 defining termination as “ the switching of traffic that is subject to section 251(b)(5) at the terminating carrier's end office switch … and delivery of that traffic to the called party's premises. See also 47 C.F.R. § 51.701(d).
8 Local Competition Order at 15546–47 ¶ 91.
9 The proposals introduce two new terms for purposes of assessing universal service contributions: “Assessable Numbers” and “Assessable Connections.” Assessable Numbers are defined, for purposes of assessing residential services with universal service contributions, as NANP telephone numbers or functionally equivalent identifiers in a public or private network that are used by an end user to receive or terminate communications to an interstate public telecommunications network. Assessable Connections are defined, for purposes of assessing business services with universal service contributions, as interstate telecommunications service or interstate service with a telecommunications component that connects a business end-user's physical location on a dedicated basis to the contributor's network or the public switched telephone network (PSTN).