Telecommunications Carriers Start to Prepare for Recent FCC Regulation Rulings

Compliance With FCC’s New Connect America Fund (CAF) Will Increase Telephone Bills For Some Customers

Telecom companies throughout the nation will face a new set of FCC rulings aimed at revising previous regulations associated to collection and distribution of Universal Service Fund (USF) contribution mechanisms as well as inter-carrier compensation.  Since 1997, with implementation of the Telecommunications Act of 1996, the Universal Service Fund has been central to the Federal Communications Commission’s mission of assisting telecommunication carriers throughout the nation in providing affordable telephone services.

Most importantly, aside from renaming the USF to the Connect America Fund (CAF), the FCC has decided to redirect funds from the program as it stands today with emphasis on providing telephone service to rural areas and refocus its goal to providing affordable broadband in locations with little or entirely without broadband access.  The FCC has made no mention of increasing carrier liabilities to cover the new plan and promises consumers and businesses will not be affected.

However, within the FCCs ruling they have decided to change the means by which carriers compensate one another for delivery of traffic between networks.   It appears in response to carrier complaints and disputes pertaining to inter-carrier compensation the FCC have chosen to specifically tackle issues stemming from excessive unidentifiable traffic with the Connect America Fund.  It is their belief improperly billed inter-carrier compensation results in inflated consumer invoicing and the CAF will target ICC rates and billing procedures in an attempt to decrease faulty call detail records and illegitimate revenue.

 It is in this regard Datavo is sure average consumers, those not provided telephone or broadband service as a result of the CAF, will be ill affected by the program.  Inter-carrier compensation has long since been utilized by telecom companies as a cost recovery mechanism ultimately resulting in lower end user invoicing.  ICC, in most instances, off sets the cost of interstate call services provided by the local carrier through billing long distance carriers a small amount for delivery of the call to the end user.  Undoubtedly, local carriers will pass these charges onto the consumer should this cost recovery mechanism be eliminated through implementation of the CAF.

At this time the FCC has only released its executive summary on the topic; however has planned to execute Phase 1 of the program in January 2012.