PROPOSED RESOLUTION ON INTERCARRIER COMPENSATION
WHEREAS, telecommunications traffic of one telecommunications carrier that originates, transits or terminates on the network of another carrier imposes costs on the carrier that originates, carries or terminates that traffic; and
WHEREAS, telecommunications carriers have historically compensated each other for originating, transiting or terminating telecommunications traffic on the network of another carrier; and
WHEREAS, the rates of compensation for originating, transiting and terminating telecommunications traffic currently vary based on the type of traffic and the type of carrier involved; and
WHEREAS, these different rates of compensation have created opportunities for uneconomic arbitrage of the intercarrier compensation system; and
WHEREAS, certain proposals before the Federal Communications Commission (FCC) to reform the current intercarrier compensation system call for implementation of a “bill and keep” system which would require all carriers to recover all of the costs of their networks from their end-user consumers, would require increases in the federal subscriber line charge, would transfer a large portion of the revenue currently provided by intercarrier compensation to the federal universal service fund, and would reduce state jurisdiction over intrastate telecommunications rates; and
WHEREAS, other proposals to reform intercarrier compensation would require development of “default” intercarrier compensation rates with recovery of remaining costs through increases in the federal subscriber line charge, increases in the universal service fund, and/or creation of new revenue preservation funds paid for by end users; and
WHEREAS, none of these proposals require audits of costs or consideration of earnings of telecommunications carriers; and
WHEREAS, consumers have historically paid for their access to the public switched telecommunications network based on their usage of the network; and
WHEREAS, proposals to go to a “bill and keep” or “default” system of intercarrier compensation would shift revenue responsibility from high-usage customers to low-usage customers, and from business customers to residential customers; and
WHEREAS, proposals to go to a “bill and keep” or “default” system of intercarrier compensation would disproportionately impact low-usage residential consumers through higher charges for access to the public switched telecommunications network and higher universal service fund surcharges; and
WHEREAS, low-usage residential customers have already experienced large increases in the price of access to the public switched telecommunications network through previous efforts to reform access charges on both the federal and state level, such that further government-mandated increases in the price of access to the public switched telecommunications network would be unconscionable and would adversely affect subscribership to the network, especially among low-income consumers:
NOW, THEREFORE, BE IT RESOLVED that the National Association of State Utility Consumer Advocates (NASUCA), urges the FCC to adopt an intercarrier compensation system that:
a) recognizes that originating, transiting and terminating telecommunications traffic imposes costs on originating, transporting and terminating carriers; and
b) treats all telecommunications traffic in an equitable and non-discriminatory manner; and
c) fairly allocates costs so that residential customers do not pay more than fair share of the costs of the telecommunications network; and
d) verifies costs and considers earnings of carriers; and
e) recognizes the appropriate role of state government in establishing rates charged to end-user consumers in each state; and
f) avoids increases in unavoidable monthly line charges for end-use consumers; and
g) avoids the need for new universal service funding of carriers.
BE IT FURTHER RESOLVED, that the Telecommunications Committee of NASUCA, with the approval of the Executive Committee of NASUCA, is authorized to take all steps consistent with this Resolution in order to secure its implementation.
Approved by NASUCA:
Place: Austin, Texas
Date: June 15, 2004