Level 3 Withdraws Forbearance Petition

Hi folks, I was out of pocket yesterday and didn’t get a chance to comment on what may yet play out to be one of the more important turning points in our industry’s young history. On Monday evening, Level 3 Communications decided to withdraw its forbearance petition, which asked the FCC to affirm the existing rules for who pays whom and how much for exchange of traffic between VoIP networks and phone networks.

In withdrawing the petition, Level 3 noted the recent change in FCC leadership and how that placed the Commission in the difficult position of confronting a statutory deadline while managing a leadership transition.

While I am not myself a carrier of VoIP traffic (nor do I play one on TV), it seems to me that Level 3 missed out on an opportunity here. Perhaps they had caught wind of the fact that the Commission was set to rule against their petition, and took advantage of a change in leadership at the FCC to gracefully bow out at this time, electing to regroup and come out swinging at a later date.

But with the lobbying efforts put forth by the incumbent telcos regarding this and any other issue that threatens to hurt their ability to make money selling phone service, it’s a dangerous game to back down. I believe that maintaining the status quo, and remaining in regulatory “limbo” is no way to push ahead and shine the light on a new dawn of communications. (I’m running out of cheap metaphors.) Hopefully, Level 3 and others in our industry will gather their thoughts, collect themselves, and revisit their business before the FCC in short order.

Here are several comments that reached me yesterday while I was out:

The following statement can be attributed to Staci Pies, President of the VON Coalition:
“As the new FCC Chairman begins his term, we look forward to working with him to help unleash the full promise and potential of VoIP. As an immediate step, the Commission must reaffirm that VoIP providers should pay cost-based rates when accessing the public network. The Commission must also replace the broken access charge regime as quickly as possible.” 

Mike Holloway, President and CEO of PointOne, said:
“FCC Chairman Kevin Martin is just beginning his duties in a very demanding role. The removal of the petition gives Chairman Martin and the Commissioners the opportunity to establish appropriate interim rules to govern the exchange of VoIP traffic. Moreover, the withdrawal means that the current rules, which enable VoIP providers to offer consumers unlimited packages of innovative communications services, remain solidly in place.

“This is good news for the competitive VoIP industry and great news for consumers. 

“PointOne is confident that Chairman Martin and the other Commissioners recognize the need to reconfirm immediately that VoIP providers are not burdened by the ‘old rules’ designed for ‘old wires.’  Until such time as the Commission changes the current compensation rules, VoIP providers will continue delivering their services to consumers by purchasing cost-based access to the old network as end users — and remain free of dated access charge obligations which add unnecessary cost burdens to the American consumer. The Commission must then establish expeditiously a clear path forward for the delivery of all services, including innovative IP-based services, by reforming comprehensively the system of payments between interconnected providers.”

In his blog yesterday, Rich Tehrani shared comments from Jonathan Lee, senior vice president, regulatory affairs CompTel/ALTS:
“It is unfortunate for Level 3 and the entire community of VoIP service providers that the previous FCC leadership was unable to reach a consensus on this critical issue, despite having the full allotment of time allowed to consider the forbearance petition.

“With the change of leadership at the FCC coming so close to the deadline for action on the petition, CompTel/ALTS believes Level 3 made a prudent decision to withdraw its petition at this time. With this decision, the new FCC will not be forced to rush to a hasty judgment and will have a fair opportunity to consider the various policy ramifications of the questions on which Level 3 seeks clarity. Nonetheless, the issues presented by Level 3 are important issues, which must be resolved expeditiously in order for this exciting technology to reach its full potential. CompTel/ALTS is optimistic that Chairman Martin will make these issues a priority.”