Recent Forbearance Petitions Demonstrate Need for Meaningful Intercarrier Compensation Reform

On January 11, 2008, Embarq filed a forbearance petition with the Commission to eliminate the “Enhanced Service Provider” (“ESP”) Exemption to interstate access charges. Embarq claims that grant of its petition would make ESPs telecommunications carriers, thus subject to regulation. ESPs would no longer be considered “customers” of telecommunications carriers.

The Embarq petition makes clear that it is targeting specific types of companies for new regulation. Foremost, Embarq seeks to create additional regulatory obligations for interconnected VoIP providers, such as cable operators and Vonage. In addition, the proposed regulation would extend to purely Internet-based calling services like Skype. Most damaging is that the petition appears to treat all ESPs, including conference calling companies, voicemail providers, and others, as telecommunications carriers, subject to full Commission regulation, including reporting requirements and access charges.

Meanwhile, late last year, Feature Group IP also filed a forbearance petition requesting that the Commission affirm the ESP Exemption, as applicable to advanced IP communication systems.

Both petitions emphasize the greater need of a comprehensive reform effort to treat like services with regulatory parity under a unified rate scheme. Rather than perpetuating the interim regime, which is built upon discriminatory regulations, sponsored by industry giants, the Commission should seize the opportunity as a means toward obtaining equal treatment for all telecommunications traffic by eliminating disparate intercarrier compensation rate structures for otherwise identical functionality to even the playing field among providers and enhance consumer benefit.