There’s a revolution starting in the USA that could have a dramatic revenue impact on all operators in a few years. The Federal Communications Commission (FCC) ’s National Broadband Plan, formally released yesterday in Washington, provides a roadmap for revamping the Universal Service Fund (USF) and Intercarrier Compensation, two long-standing hot-button issues for telecom service providers.
A story, published in Light Reading mentions that, ‘Sharon Gillett, Wireline Competition bureau chief for the FCC, said the broadband plan will lay out a three-phased blueprint to shift intercarrier compensation over a 10-year period away from today’s per-minute rates and toward a flat-rate that’s likely to be lower.’
“What the plan lays out in that 10-year transition is a three-phase decline in the intercarrier compensation curve – not really a decline, but a shift. The idea is to provide adequate cost recovery coverage, but not to do it on a per-minute basis.”
In an all-IP world, it doesn’t make sense to try to identify the long-distance voice packets and try to count them for intercarrier compensation purposes, Gillett said, when flat rates are more logical.
Ms Gillett is a very bright lady indeed. Just as CSPs are grappling with the move from timed/volume services to ‘all you can eat’, flat rate packages it seems eminently sensible that the same pricing regimen should exist in the wholesale and interconnect areas.
This also raises the issue of whether it is economically viable, or even necessary, to measure IP packets and traffic and also try to disseminate their source and what service they belong to. As our demand for bandwidth and speed continues to grow exponentially this will become more and more a challenge that will increase costs.
By changing the wholesale billing structure the simplified pricing would carry through to retail. I suspect many people are crying out, “bring it on”! But let’s not get carried away, this could take years to be accepted and ten years to transition, but it is a start.