|
|
Intercarrier Compensation
Intercarrier compensation refers to the charges that one carrier pays
to another carrier to originate, transport, and/or terminate telecommunications
traffic. Although the same or similar facilities are used to originate,
terminate and transport all types of traffic, the rates for intercarrier
compensation vary based on several factors:
- Where the call begins and ends (whether the call is local or long
distance, and whether it is interstate or intrastate)
- What types of carriers are involved (incumbent local carriers, competitive
local carriers, long distance providers, wireless carriers)
- What type of traffic (wireline voice calls, wireless calls, data
bound for an Internet service provider)
Intercarrier compensation payments are governed by a complex system
of federal and state rules. There are two major forms of intercarrier
compensation - access charges and reciprocal compensation.
Access charges generally apply to calls that begin
and end in different local calling areas. Interstate access charges apply
to calls that originate and terminate in different states, and intrastate
access charges apply to calls that originate and terminate in different
local calling areas within the same state. The Commission oversees interstate
access charge rates, and the states oversee intrastate access charge
rates. Access charges do not apply to Internet service providers
under an exemption for enhanced service providers that use the facilities
of local telephone companies.
Reciprocal compensation generally applies to calls
that begin and end within the same local calling area. Historically,
reciprocal compensation rates have been lower than access charge rates,
and interstate access charge rates have been lower than intrastate access
charge rates. The difference between these rates can be large, with some
reciprocal compensation rates as low as $0.00 per minute, and some intrastate
access charge rates greater than $0.30 per minute.
The Commission initially crafted its interstate access charge rules
to facilitate payments between local telephone companies and long-distance
companies after the 1984 breakup of the former AT&T monopoly. The
agency modified and expanded its intercarrier compensation rules following
passage of the Telecommunications Act of 1996. Dramatic changes in the
marketplace since that time, however, have placed increasing strains
on the existing intercarrier compensation system. For example, most wireless
services were not available in the 1980s. More recently, the introduction
of bundled service offerings and new services, such as voice-over-Internet
protocol (VoIP) technology, have blurred traditional industry and regulatory
distinctions, and posed questions that were not contemplated when the
intercarrier compensation rules were initially created.
In response to these developments and the increasing strains placed
on the existing intercarrier compensation regimes, the Commission has
undertaken comprehensive reform of intercarrier
compensation. |
last reviewed/updated
on 09/15/2008 |