December 2012 Archives

December 6, 2012 5:31 PM

The FCC's Numbers Racket: S*N*A*F*U* In Progress?

Most of us don't know it, but the phone numbers we get from our wireless, landline, or cable service provider are not actually owned by those companies.  The numbers themselves are a public resource, owned by the member countries of the North American Numbering Plan ("NANP").   

The process of actually distributing numbers to all countries participating in the NANP is handled by the Plan Administrator ("NANPA").   NANPA, however, does not make policy, which is left to each member country.

In 1996, Congress delegated to the FCC jurisdiction over all U.S. phone numbers. 47 U.S.C. 251(e)(1).   In 1997, the FCC, in turn, adopted rules for the distribution of phone numbers.  The FCC elected to make numbers available to all carriers using the PSTN (distinct from the Internet).  At this time, there were no retail providers of voice service over the Internet.

On January 28, 2005, the FCC voted to grant a waiver of its numbering rules to SBC Information Services, Inc. ("SBCIS), (now part of AT&T) so that SBCIS--a VoIP provider interconnected with the PSTN--could directly access numbers from NANPA.  The Commission explained "that good cause exists to grant SBCIS a waiver of [the FCC's rules] until the Commission adopts numbering rules regarding IP enabled services." (emphasis added)  Remember this.  

On March 4, 2005, Vonage, another interconnected VoIP service provider, filed a similar request for the same relief granted to SBCIS one month earlier--a waiver of the FCC's rules so that it could directly access telephone numbers from NANPA.  After six years of inaction by the Commission, on March 8, 2011, Vonage renewed its request for the limited waiver that would allow it to obtain telephone numbers directly from NANPA.  

Situation Normal

Predictably, Vonage's recent petition was opposed by Level 3 (the company that charges Vonage for phone numbers) and competitive carriers that charge other VoIP providers for phone numbers that they (the competitors) can already access directly by way of their pre-existing regulatory status as CLECs.  The initial arguments against Vonage's request were also very typical iterations of such venerable public policy staples as "you'll blow up the network/upset Natural Law" and the "what if everyone did it" argument.  

So far, so good--nothing to look at here, right?  Situation normal, but here's where it gets . . . 


Around August, things take a turn for the "are you kidding me?!" and the "public interest" becomes just about Level 3's self-interest; which is cool, if you're Level 3.  Level 3 files this ex parte, explaining the financial consequences it would face if the FCC granted Vonage's waiver request and eliminated what Level 3 seemingly-concedes is either a regulatory rent, or a means to other rents (intercarrier compensation from IXCs) through its symbiotic relationship with Vonage, whom Level 3 calls its "carrier partner" (instead of the more demeaning "customer" term).  

On its face, the ex parte seems almost rudely self-interested--they don't even pretend to have any public interest arguments.  But, far from being rude, Level 3 explains that it was invited to share its self-interested view at the request of the Wireline Competition Bureau.  At this point, Level 3 is starting to believe its CEO's story that he stole the "number one dime" from Scrooge McDuck.

Scrooge McDuck.jpg

        Level 3 has it now, big boy.

Seriously, this is the point in this Bermuda Triangle of a proceeding where the compass spins out of control and all communication is lost.  As near as I can tell, this is the last rational communication that could be recovered from the record--a Vonage ex parte filed one week earlier.   

From this point on, you're either on Level 3's side, or (pro-wrestler voice) you are wrong, brother!  It seems like every subsequent ex parte from anyone, including--in fact, especially--Vonage discusses whether or not, or to what extent, an FCC grant of the Vonage waiver request would financially harm Level 3 and the other CLEC regulatory merchants to the VoIP providing industry.  

In an ex parte that should make anyone squeamish, Vonage seems to be trying to assure the Commission that by granting its request, Vonage won't become that much more efficient. Vonage also says they'll still be Level 3's friend and will continue to buy from Level 3.  Level 3 says, "nope, not enough."   

Oh, and what does Level 3 want?  They want the FCC to do a general rulemaking, rather than grant a Vonage-specific waiver.  In other words, they want the exact thing that the FCC said--almost 8 years ago--would take too long, and that justified the SBCIS waiver!

Why It's Wrong

Isn't it obvious?  Aside from the prospect that the FCC appears to be seriously re-considering relief that it previously rejected as antithetical to a broadband future, the Wireline Competition Bureau is deeply, and, dare I say it--uncomfortably--concerned about the revenue effects of the Commission's decision on some very specific wireline competitors.  Every other ex parte since mid-August says the Bureau asked for the information.  And, when parties' attorneys feel compelled to include that proviso in front of their naked groveling, then you know it's rough.  These people are lawyers, and they're embarrassed.  Enough said.