Access Fee and Interconnect Issues: Some Resources
July 25th, 2006 by Gordon Cook
I am FTPing five items. All public domain documents. Publicly available if you know where to look.
Getting an adequate grasp of all the nuances at play here and translating it for general understanding is beyond my ability to allocate the necessary time. Therefore I am not going to pretend to do that. I offer these documents to others who may have the ability and the interest to plow down into them. I also remember Dan Gilmor’s injunction that you my readers know in aggregate way more than I do. Therefore great. If any of these items fill in gaps and lead you to fresh insights plkease share them.
Disclosure: While Level 3 is a subscriber to the COOK Report, I am not a Level 3 contractor, have no consulting income from Level 3, have not had any such income in the past, and have never been a stock or bond holder in Level 3 or any of its affiliated companies. I do not like what is being done to Level 3 because I believe Level 3’s prosperity is vital to an Internet that is not swallowed and stiffled by the dupopoly.
1. This is a slide of access charges . My understanding is that Level 3’s opponent is trying to impose these charges on all ISP-bound traffic (where locally dialed AND locally exchanged) and all VoIP traffic (where locally dailed AND locally exchanged).
2. This is Level 3’s December 2005 Wyoming pesentation. Over four megs in size.
If you drill down you will see that ISP-bound and VoIP follow same path. So Qwest wants Level 3 to Pay Qwest when Qwest sends CLECs ISP-bound traffic that they (Level 3) carry all over the world AND when that traffic comes back the other way, they want CLECs (Level 3) to pay them to terminate it. So they’ve changed the rules - CLECs (Level 3) never get paid for the work they do but ILECs get 30 times that coming and going.
If you had a copper loop for which you received these access charges from other carriers and you could charge high rates for local telehone, plus very high rates for additional features (say call forwarding at $4-5 / month, etc.) on a per-feature basis, plus a per mintue charge on long distance, why would you ever spend any money (say $100 per loop - the cost studies have been done in every state — it is called “loop conditioning”) and a few thousand to drop a DSLAM into a Central Office and connect it to existing fiber based backhaul (nearly all Bell COs are connected by fiber) - for the privilege of selling a DSL service at $40-$50 per month that lets your customer buy fully featured VoIP (usually 5 - 15 features) for calling nationwide at a flat rate - from anyone that customer wants to buy from — if you had all this and an absolute monopoly over customer access wouldn’t you sit back and smile as qwest does in its financial report?
Here’s a tentative conclusion
Could one be blamed for thinking that this compensation regime would be more profitable for Qwest than the deliver of any enhance broadband services to its customers? Why bother? Just rake in the access fees.. . . and the $139 per month per customer bundled everything and watch your ARPU climb.
Wonder why “net neutrality” misses what’s really afoot?
3. Qwest report to its investors. Note the slide where Qwest remins us that it too has a national fiber network and likes selling VoIP nationally.
4. Level 3’s opening brief in Iowa - 3/27/06.
5. Level 3’s reply in Iowa April 10 2006.
Enjoy while i got back to getting my September Cook Report ready to publish on, I hope, July 31.