FCC, VoIP providers & Carriers skirmish over call charges

Posted on Jun 16, 2011 in Jeff Nolte's Blog

The FCC has proposed phasing out the public switched telephone network in favor of moving to a broadband-based network to accommodate newer, popular applications.

Complicating matters is that VoIP service providers like Skype and Vonage have so far been exempt from paying the same rates that traditional carriers like Verizon pay to swap calls on the public network.

Since VoIP providers don’t have to pay those fees — which are worth billions of dollars — their services have been able to undercut the prices of traditional carriers.

Many traditional carriers, such as AT&T and Verizon, want the FCC to intervene and force Internet-based providers to pay like everyone else. VoIP providers say they are an information service rather than a telecommunications service and should be exempt from paying the same interconnection fees. They favor a framework called “bill and keep” that allows each service to absorb its own costs without any money changing hands.

As expected, each side in the debate wants the FCC to rule in its favor. One thing is clear: there is a growing recognition that the old business model of delivering voice service is fading away.

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