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 Federal  Communications  Commission  FCC  04-  97 
 STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS 


 Re:  Petition  for  Declaratory  Ruling  that  AT&  T’s  Phone-  to-  Phone  IP  Telephony  Services  are  Exempt  from  Access  Charges  (WC  Docket  No.  02-  361) 
 Today’s  decision  clarifies  the  scope  of  carrier  access  charge  obligations  when  interexchange  carriers  provide  phone-  to-  phone  IP  telephony  services.  I  support  this  Order 
 because  the  decision  we  reach  is  the  one  that  flows  most  logically  from  our  current  rules. 
 Nonetheless,  I  am  concerned  that  we  have  reached  this  conclusion  without  taking  into  consideration  the  full  context  that  good  policy-  making  requires.  By  approaching  the  subject  of 
 access  charges  and  VoIP  through  occasional  and  discrete  petitions,  we  are  nickel-  and-  diming  much  larger  intercarrier  compensation  issues.  We  should  have  begun  at  the  beginning  and 
 undertaken  the  sorely  needed  reform  of  intercarrier  compensation  and  then  considered  petitions  such  as  this.  We  have  in  place  today  an  intercarrier  compensation  regime  under  which  the 
 amounts  and  direction  of  payments  vary  depending  on  whether  carriers  route  traffic  to  local  providers,  long-  distance  providers,  Internet  providers,  CMRS  carriers,  or  paging  providers.  This 
 system  is  an  open  invitation  for  abuse.  In  an  era  of  convergence  of  markets  and  technologies,  its  patchwork  of  rates  should  have  been  consigned  by  now  to  the  realm  of  historical  curiosity.  But 
 rather  than  grasp  the  whole,  today’s  decision  sets  the  stage  for  proceeding  piecemeal.  It  only  prolongs  the  development  of  a  better  system  that  would  rely  more  heavily  on  market  forces  to 
 drive  technological  advances  and  innovation. 
 As  a  separate  matter,  I  am  concerned  that  unsuspecting  carriers  may  wind  up  caught  in  the  crossfire  and  rendered  collateral  damage  by  today’s  Order.  To  date,  the  Commission’s 
 pronouncements  concerning  VoIP  services  and  access  charges  have  been  unfortunately  opaque.  The  Commission  suggested  that  access  charges  “may  apply”  in  its  1998  Report  to  Congress,  but 
 reserved  further  judgment  until  future  proceedings  with  more  focused  records.  The  Commission  prolonged  this  uncertainty  by  declining  to  move  ahead  on  a  1999  petition  from  US  West.  It 
 provided  another  vague  sign  in  the  Initial  Regulatory  Flexibility  Analysis  accompanying  the  2001  Intercarrier  Compensation  Notice  of  Proposed  Rulemaking.  As  a  result,  innovative  and 
 entrepreneurial  VoIP  upstarts  may  have  been  encouraged  to  believe  they  had  a  green  light  to  go  ahead  and  develop  business  plans  based  on  the  assumption  that  access  charges  were  not  required. 
 This  may  not  have  been  the  best  interpretation  of  our  precedent.  But  the  Commission  surely  played  a  role  in  this  state  of  affairs  by  sending  out  mixed  signals. 


 Today  the  Commission  does  not  acknowledge  the  confusion  it  created.  Instead,  this  decision  is  eerily  silent  on  the  equities  of  retroactive  liability,  the  degree  to  which  there  has  been 
 detrimental  reliance  on  our  muddled  pronouncements,  and  the  auditing  and  litigation  burden  that  would  follow  from  retroactive  application.  This  is  unfortunate.  Because  the  Communications 
 Act  does  not  contemplate  that  the  Commission  will  act  as  a  collection  agent  for  carriers  with  unpaid  tariffed  charges,  carriers  seeking  recovery  will  proceed  directly  to  court.  The  ensuing 
 litigation  could  tie  up  the  resources  of  carriers  providing  services  similar  to  AT&  T’s  phone-  to-phone  IP  telephony,  carriers  caught  in  the  middle  of  access  charge  disputes  between  incumbent 
 local  exchange  carriers  and  VoIP  providers,  and  entrepreneurial  VoIP  providers  that  heretofore 
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 Federal  Communications  Commission  FCC  04-  97 
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 believed  their  services  were  exempt  from  access  payments. 
 We  can  and  should  do  better.  We  have  a  three-  year  old  proceeding  on  intercarrier  compensation  that  is  still  pending.  We  are  late  to  these  issues,  and  the  pit  stop  we  take  here  to 
 straighten  out  one  issue  leaves  behind  a  system  in  need  of  more  comprehensive  improvement. 
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