On January 18, 2011, Bandwidth.com announced that it had entered into a commercial agreement with Verizon for the exchange of VoIP traffic. According to Bandwidth.com, the agreement is with the “Verizon wireline companies” and applies to traffic that originates from or terminates to a VoIP end-user. The parties have agreed to terminate each other’s VoIP traffic at a rate of $0.0007 per minute.
Over the past several years there have been a number of disputes concerning intercarrier compensation charges for VoIP traffic. The FCC has not provided guidance on this issue to date, and in the absence of regulation, a number of courts and state public utility commissions have issued conflicting rulings on VoIP traffic compensation issues.
Upcoming FCC Proceedings
The FCC is expected to consider a proposed rulemaking on intercarrier compensation during its February 8, 2011, meeting. Some local exchange carriers have sought interim FCC rules confirming their position that they are entitled to impose on VoIP traffic the same access charges they are entitled to collect for PSTN/circuit-switched telecom traffic under Title II of the Act. It does not appear likely that the FCC will adopt interim rules on VoIP compensation at its February meeting, although it is possible that VoIP and certain other issues could be placed on a faster track than broader intercarrier compensation reform.
In the past, the FCC has looked at market-based agreements to determine reasonable compensation rates such as when it established rules governing compensation for ISP-bound traffic. Thus, the agreement between Verizon and Bandwidth.com is likely to be discussed and debated in the upcoming intercarrier compensation reform rulemaking.
If you have questions regarding this matter or would like to further discuss these issues, please contact the following lawyers in our Telecommunications, Media and Technology Group:
This article was originally published by Bingham McCutchen LLP.