Level 3 came up short again in its recent, and presumably final, effort to change the implementation of the FCC’s step 6 switched access transition. The short story is AT&T (and generally the other price cap LECs as well) did not reduce switched access rates for traffic destined to its CLEC, wireless, and VoIP affiliates -- and Level 3 believes it should have.
The specific issue all along has been about interpreting this portion of FCC Rule 51.907(g):
Each Price Cap Carrier shall establish, for interstate and intrastate terminating traffic traversing a tandem switch that the terminating carrier or its affiliates owns, Tandem-Switched Transport Access Service rates no greater than $0.0007 per minute.
After the ILECs made their step 6 filings – without reductions for affiliate, but non-price cap LEC termination -- CenturyLink opposed the AT&T and Verizon filings, Level 3 opposed the AT&T filing, and Sprint opposed the CenturyLink, AT&T, Cincinnati Bell, and Verizon filings. These efforts resulted in no action by the FCC to change what had been filed.
On February 12th, that changed. I wouldn’t say they slammed the door exactly, but they carefully pulled it shut tightly enough to hear the latch click. The FCC clarified that “the $0.0007 per minute rate in Section 51.907(g)(2) [and zero after July 1, 2018] applies only to tandem switching and transport traffic that terminates to a price cap carrier end office.” This issue has been settled. (I do wonder exactly when it was settled. Has this been the intent since the Transformation Order was released back in 2011, or did it only get settled as the price cap LECs began seeking informal guidance in early 2017?)
For those hoping this decision would answer more questions about the ultimate Transport transition for all parties and traffic types, this significant -- but narrow -- clarification may have been a letdown. While it touches on some of the big policy issues of “third-party” Transport, the industry will just have to wait for this ongoing intercarrier compensation proceeding to develop further before those issues will be settled.
Better yet, interested parties should continue to make their voices heard as the FCC attempts to craft a solution that will best serve this important market in the long term. #Step6Transition