What If Access Charges Are Applied To IP-Originated Calls?

Hills, Michael T.
May 2005
Business Communications Review;May2005, Vol. 35 Issue 5, p42
Trade Publication
The article analyzes the consequences of applying standard interstate or intrastate access charges by local exchange carriers (LECs) to IP-originated calls that are terminated using the Public Switched Telephone Network (PSTN). Withdrawal of the Level 3 petition underscores the continuing uncertainty and potential exposure to traditional access charges for voice over IP (VOIP) providers, as well as for carriers providing VOIP termination services. This overhanging controversy presents a serious challenge to the cost structures and business plans for VOIP and other IP-enabled services. These business models also assume that the cost of delivering VOIP traffic from the VOIP provider to a competitive local exchange carrier will be determined according to Reciprocal Compensation, at a cost of 0.07 cents per minute or lower. The VOIP business models have been challenged by the ILECs, who have maintained that Standard Access Charges--interstate and intrastate--should be applied to terminate all calls, including VOIP traffic, that originate outside the ILECs local calling area.


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