FCC Invites Comment on Access Charges for IP-Based Communications

The Federal Communications Commission (FCC) is inviting comment on two petitions that raise the question of whether incumbent local exchange carriers (ILECs) may collect access charges when they carry non-local calls on the public switched telephone network (PSTN) that originated as Internet Protocol (IP) communications. Access charges are intended to compensate ILECs for carrying non-local traffic that is passed to or from another carrier. These petitions highlight the increasing regulatory tensions arising from the growth of IP-based communications services and networks that still rely to some degree on the legacy PSTN.

One provider of IP-based communications service has argued that IP-based traffic is exempt from access charges under rules adopted in the 1980s that were intended to protect “enhanced service providers,” such as online database services, that used the local telephone network in a manner similar to an end-user business customer and not like traditional interexchange carriers. However, one ILEC has countered that IP-based carriers offering Voice over IP (VoIP) or similar services make use of local exchange circuits just like other interexchange carriers and should be required to compensate the ILEC for use of its network. The IP-based carrier further argues that imposing access charges will increase costs of providing services and stifle development of new communications services that can only be provided through IP, while the ILEC argues that new service providers should not be able to benefit from such “regulatory arbitrage” and should be required to contribute toward maintaining the ILECs’ carrier-of-last-resort local exchange networks. Comments on the two petitions are due February 19, 2008, and reply comments are due March 14, 2008.