October 2009 Archives

October 13, 2009 3:41 PM

FCC Last Friday: "Someone's $0.00 Has Got to Go(?)!"

Well . . . not really, at least not quite yet, but this is where the Commission is heading--whether they know it, or like it, or not.  If the FCC does know where they're heading (and I don't think they do), they can't be too thrilled, because they also don't know how to make it stop.  Wait, what am I talking about?

Last Friday, October 9th, on the Friday afternoon before the Columbus Day weekend, the Commission's Wireline Competition Bureau sent a letter to Google, asking some questions about the Google Voice service.  The questions aren't that tough for Google to "slip", in the sense that the questions won't get the "real" story out--the most we could probably learn is that Google itself just might receive ultra-low priced, even "free", inputs from its carrier partner(s), and Google might have some deniability about knowing how their "free" service is paid for.  But the answers should give the Commission some clues to pursue the whole story--which they won't get until they send out questions to Google's carrier partner(s), and the FCC does ask Google to identify its carrier partner(s) in the last question.

Notably, the Google letter is found on the Wireline Competition Bureau's home page, and not the FCC's main home page.  However, with no apparent sense of awareness, or irony, the entire FCC voted an Order and Notice of Proposed Rulemaking on the very same date (that was on the main home page) designed to agree with a coalition of smaller LECs seeking to "amend [the Commission's] rules to permit an incumbent LEC ETC with declining numbers of access lines to use a higher DEM weighting factor in performing jurisdictional separations and calculating LSS.  We believe that public policy supports doing so."  (See paragraph 13, citations omitted).  Effectively, the FCC has recognized that the number of companies actually paying access is declining, and decided that the best solution is to raise rates for the few companies that actually own up to providing a telecommunications service.  Why does this matter?

In August when the FCC sent its original letters to Apple, AT&T, and Google, I really didn't think the letters could possibly turn out well for Google.  I also noted that I preferred to think the purpose of the letters were for the FCC to "declare Google Voice to be a wireless information service, and then apply this definition to the wired broadband network in solving the classification of VoIP to eliminate this nasty obstacle to the creation of the national broadband plan."  I've since become skeptical that this Commission has any appetite--or understanding of the necessity--for reforming intercarrier compensation (and universal service) before undertaking any discretionary projects.  I don't think the FCC wants to classify VoIP service at all, but at this point, it just seems that circumstances won't allow this luxury.

I recently noted, that Traffic Pumping and "Magic-Jacking"© cannot continue to exist, while the number of "access paying" telecommunications carriers dwindles.  Yeah, that's right, I'm copyrighting the term "magic-jacking" to refer to the practice of an "over-the-top" VoIP provider (i.e., no LEC facilities) "stimulating" terminating and originating 8YY "access" revenues (for which the switchless VoIP provider appears to have no right to charge) by offering a "free" two-legged calling service in which the first "leg" goes to a mechanical relay point--usually in a higher-than-RBOC interstate location.  Meanwhile, the "magic-jacker" blocks termination to locations where termination costs are greater than the "terminating" access being charged to the IXC for "completing" the call to the relay point.  Google Voice, Magic Jack, and Skype are all prominent examples of alleged "magic-jackers."  SpeakEasy has recently declared that it is joining their ranks.

Continue reading FCC Last Friday: "Someone's $0.00 Has Got to Go(?)!"
October 13, 2009 1:30 PM


I know I said in a previous post that I've done this subject to death and resolved to write on some new stuff.  I still mean to do this . . . and start exercising, drop a few pounds, cure cancer, become a ninja (well, you get the drift--a lot of stuff that isn't happening anytime soon).  But, I haven't posted anything in a couple of weeks--totally wasting all the "good will" I got from Harold Feld when he was nice enough to mention me on his blog in a post a couple weeks ago.  Around the same time, I also was lucky enough to get a referral from Rob Powell in his TelecomRamblings blog.

But, while I, personally, wasn't posting a lot (I wrote a few comments on the post Harold cited to), Harold's readers really juiced up the dialogue through their comments on the post that he cited in his blog.  The comments--really a lot more than the blog itself--have turned into a pretty robust discourse on the issue of "traffic pumping" and "access avoiding."  The "two Daves"--Erickson and Frankel--who are on opposite sides of this debate at the Commission, both contributed a lot of good and thoughtful material.  Do yourself a favor, and take a few minutes to read the commentary HERE; it would be a shame if the only people to see this discussion are the people leaving comments.  Thanks to everyone on both sides of the debate (most of the commenters) that took the time to write such thoughtful comments.  

Intercarrier compensation--especially the battle between the "free" services --is going to be something that you'll hear a lot more about over the next several months, so bear with me, but I promise you'll really understand a hard subject if you do.