Q1 2007
The ATS Network & Billing Update is published by Advanced Technologies & Services, Inc. (www.atso.com), a revenue and service assurance solutions provider. This free newsletter is a guide to telecommunications OSS, billing, and revenue assurance news and other telecom industry analysis. To unsubscribe, contribute an article, or for offbeat news, please scroll to the end. Feel free to forward this newsletter to your friends and co-workers!
In this issue:
Are You Contributing Too Much to the USF?
By:
Ryan Guthrie, Director of
Network Integrity, ATS
In June 2006, the FCC adopted an order that increased the Safe Harbor contribution percentage for wireless carriers to the federal Universal Service Fund (USF) from 28.5% to 37.1%. For carriers that continue to rely on the Safe Harbor, an increase of 9% is significant and can result in upwards of millions of dollars of additional contributions to the federal USF. Such an increase is particularly harsh for carriers who have relied upon on the Safe Harbor approach for the sake of convenience when their actual interstate and international traffic flows are less than 37.1%. Carriers that rely on the Safe Harbor face a competitive disadvantage to the extent that other carriers’ reliance on traffic studies or actual interstate revenues leads to a lower contribution percentage, meaning that those carriers pay less money into the USF and attempt to recover fewer dollars from their customers. The increased Safe Harbor can also strain carriers’ revenues by rendering them unable, as a practical matter, to pass the higher contributions through to their customers. Although carriers have faced these issues for years, the FCC’s decision to increase the “Safe Harbor” provides a good reason for carriers to reexamine the wisdom of relying on the Safe Harbor. By reducing their contribution to a level that accurately reflects the percentage of interstate and international traffic, wireless carriers will be better able to decrease the surcharges added to their customers’ bills, which may help to reduce subscriber churn in an increasingly competitive wireless market. For carriers who do not have the resources to rely on actual revenues for each USF filing, performing a traffic study is the most effective way to decrease USF contributions to a level that accurately reflects interstate and international usage. The traffic study must be submitted to the FCC for review and meet the requirements specified by the commission.
In the same order that increased the Safe Harbor contribution percentage for wireless carriers, the FCC ordered that VoIP providers will now have to contribute to the Universal Service Fund. Due to the nature of the service, the FCC believes that the majority of VoIP calls made are interstate/international and has therefore assigned a safe harbor contribution rate of 64.9%. While 64.9% seems very high, the FCC argues that they could have potentially set safe harbor at 100%. This FCC decision means that VoIP providers will now have to contribute potentially millions of dollars of their revenue to the USF. A VoIP Provider has 3 choices in this matter: Pay at the 64.9% safe harbor rate (which is presumably higher than actual interstate revenues); Use a traffic study to prove a lower rate; Pay on actual revenues, in which case you would no longer qualify for the preemptive effects of our Vonage Order and would be subject to state regulation. With the FCC ruling, VoIP providers need to take a closer look at their PIU to decide whether to pay the safe harbor rate or do their own PIU study. However, unlike wireline carriers, VoIP providers typically do not have quality means of measuring their interstate vs. local traffic. In order to do so in a timely and cost efficient manner, the provider should reach out to usage analysis vendors such as ATS who has extensive knowledge and experience with PIU analysis.
Advanced Technologies & Services, Inc (ATS) recently worked with a wireless carrier and a law firm to prepare an accurate traffic study that justifies a significantly lower contribution to the federal USF than the carrier would have made under the Federal Communication Commission’s current 37.1% “Safe Harbor.” The traffic study was completed in less than one month, and it included all of the data, documentation and statistical analysis necessary to demonstrate compliance with the FCC’s requirements for traffic studies.
Below are the estimated savings for a wireless carrier by completing a traffic study for contribution to the USF.
Wireless Carriers – Click Here for more information about reducing your USF contributions
VoIP Providers – Click Here for more information about reducing your USF contributions.
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‘Missoula Plan’ To Tackle Intercarrier Comp and Phantom Traffic
Courtesy of
Billing World
The very
“visible” problem of phantom traffic continues, but plans are underway
to attack the issue.
December 22nd is the deadline for companies like AT&T, Cingular
Wireless, Global Crossing, Level 3 Communications and the myriad
proponents of the “Missoula Plan” for intercarrier compensation reform,
such as the Rural Alliance and OPASTCO (Organization for the Promotion
and Advancement of Small Telecommunications Companies).
The Missoula Plan is a comprehensive intercarrier compensation reform
effort that asks the FCC to approve a uniform industry process for
creating and exchanging CDRs.
Just a few weeks ago, proponents of the plan issued an addendum to
provide a more comprehensive framework for phantom traffic.
“It fleshed out more detail about the phantom traffic solution than was
proffered in the larger filing,” explains Stuart Polikoff, director of
government relations for OPASTCO.
“What’s nice about the plan,” he adds, “is it not only defines a path to
resolving the issue of phantom traffic, but it pushes for an interim
plan so as not to hold up the phantom traffic issue until the Missoula
Plan is reviewed. It reflects the need for an immediate order on phantom
traffic.”
As a result, the FCC has put out a request for separate comment about
the phantom traffic proposal.
Rural and smaller carriers hope that the Missoula Plan will bring about
a unification of interstate and intrastate access rates, thus removing
the incentive for access rate arbitrage. Currently, there are different
rates for interstate and intrastate access charges, as well as for
reciprocal compensation.
At the heart of the plan is the “restructure mechanism,” which would
allow for the recovery of lost revenue for lower access rates.
Click Here for the full story.
- [Top of Page]
Local Telephone Carriers Must Connect to VoIP
Courtesy
of
www.infoworld.com
The U.S. Federal Communications Commission has ruled that incumbent local exchange carriers must connect to VoIP (voice over Internet Protocol) services, overruling two state public service commission opinions.
The FCC on Thursday granted a petition from Time Warner Cable Inc., which had complained that the South Carolina and Nebraska public service commissions had allowed rural local exchange carriers to refuse access to wholesale telecom vendors connecting to Time Warner's VoIP service.
The rural carriers had argued that FCC rules don't require them to connect to the wholesale vendors because they don't provide direct voice service to residents.
But the FCC said that argument was a misinterpretation of its rules.
The FCC "must promote competition in every sector it oversees and create a level playing field among service providers," said FCC Chairman Kevin Martin, in a statement. The FCC decision "ensures that consumers in all areas of the country reap the benefits of competition in the form of lower prices, innovative services and more choice," he added.
Click here for the full story
- [Top of Page]
OffBeat
News:
Newsvine CEO Admits To Altering Sen. McCain's MySpace Page
Courtesy of
InformationWeek
Visitors to Sen. John McCain's MySpace page might have been surprised at the presidential candidate's sudden turnaround in some of his views Tuesday.
The senator was the victim of a prank that had his Web page stating that he had changed his mind and come out in favor of gay marriage, as well as stating a bias toward attractive lesbians.
Mike Davidson, CEO of the online news site Newsvine, is taking responsibility -- or more like full credit -- for tampering with McCain's site. And he said it's a bit of cyber payback.
Davidson said he designed the MySpace template that was used for McCain's MySpace page and that McCain's camp didn't credit him for the template as requested. He also charged that they're using his images and are pulling images directly from his server so that every time a McCain MySpace page is loaded on someone's machine, his bandwidth is being used.
Click here for the full story.
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