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Intercarrier Compensation

TC 310 June 3, 2008. Intercarrier Compensation. Basic Concepts. Originating Terminating Calling-Party's-Network-Pays (CPNP) ‏ Bill-and-Keep Reciprocal Compensation Access Charges. Regulatory Arbitrage. Local and Long Distance essentially identical

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Intercarrier Compensation

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  1. TC 310 June 3, 2008 Intercarrier Compensation

  2. Basic Concepts • Originating • Terminating • Calling-Party's-Network-Pays (CPNP)‏ • Bill-and-Keep • Reciprocal Compensation • Access Charges

  3. Regulatory Arbitrage • Local and Long Distance essentially identical • Does it matter where traffic comes from? • Some implicit subsidization still occurring • CPNPs is current set up • Charge originator • No effect on terminating customer

  4. Re-route through CLEC • CLECs get TELRIC pricing for local x-fer • Long Distance has to pay Access Charges • Route traffic through CLEC • Work out deal/are affiliate • Strip “LD” tags • Possibly a Crime • MCI

  5. ISP Compensation • Viewed as LD, calling website, 1 call • Should pay access charges • Exempt due to Enhanced label • Business line rate • Switch to CLECs for free • ILECs pay CLECs • Arbitrary high, even pay ISPs for business

  6. IP-to-PSTN • Access or reciprocal compensation rates? • Exemptions should just be for own customers • ILEC position • VoIP perspective is to treat as local call • Is traffic compensated at all?

  7. Wireless • Do they get access charges? • Detariffing suggests no • Private contract only • Route through CLEC, pass back to Wireless

  8. Big Picture Lesson • Technologically similar • Regulation Differs • CPNP keeps this going • Bill-and-Keep may break it • Need to update compensation to reflect engineering realities

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