NTCA Denounces Bill and Keep Regime in FCC Filing: Urges Further Exploration, Submits Blueprint for Consideration

Arlington, Va., December 9, 2004 - In a filing to the Federal Communications Commission (FCC) regarding a Unified Intercarrier Compensation Regime (ICC), the National Telecommunications Cooperative Association (NTCA) urged consideration of a new “blueprint” of elements as the Commission moves forward in enacting new rules.

Contact Caitlin Colligan at 703-351-2086The submission of this blueprint complements a January 2004 NTCA filing to the FCC that included an extensive NTCA study of a pure “bill and keep” regime. The study concluded that such a regime would impact the revenues of rural companies by more than $2 billion annually.

The blueprint highlights five issues unique to small rural companies that must be addressed to ensure that customers and carriers across all sectors of the industry share equal responsibility for the use of the public switched network.

“This blueprint recognizes the importance of adopting rules that ensure the long-term viability of service to rural consumers. It also acknowledges the need to adopt reforms that reduce arbitrage by correcting anomalies and creating a system that compensates carriers at the same time that it encourages investment and innovation,” NTCA said in the filing.

NTCA’s blueprint consists of the following key elements, urging policymakers to:

  • Adopt rules that include a different set of regulatory policies for rural telephone companies to ensure that their networks remain viable.
    Rural incumbent local exchange carrier (ILEC) networks are the default infrastructure in high cost areas. In most instances rural ILECs offer the only telecommunications service that is ubiquitous throughout their service area and universal service would not exist without them.
  • Adopt rules for rural ILECs that include some charge that provides for carriers to compensate each other for the use of one another’s network.
    Bill and Keep is not an appropriate substitute for a charge that recognizes the value provided and the costs imposed when a carrier utilizes another carrier’s facilities.
  • Adopt rules that preserve and sustain universal service.
    Reform cannot result in unaffordable end user rates or in a ballooned universal service fund that is unsustainable.
  • Adopt rules that preserve rural ILECs’ option to operate under Rate-of-return regulation.
    ROR regulation is a reasonable means to determine financial requirements for rural telephone companies and to ensure their ability to continue to invest in rural areas.
  • Adopt rules that encourage investment in a network infrastructure capable of delivering high quality broadband services in all areas of the nation.
In the filing, NTCA encouraged further exploration of alternatives to the existing patchwork of compensation mechanisms and cautioned against a “one-size fits all” solution that could harm rural telephone companies and the rural consumers they serve. 

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NTCA is the premier association representing nearly 600 locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America. NTCA provides its members with legislative, regulatory and industry representation; meetings; publications and educational programs; and an array of employee benefit programs. Visit us at www.ntca.org.