Why then does the FCC approach reforming the Universal Service Fund (USF) and InterCarrier Compensation (ICC) using the outdated costs, usage and pricing models associated with TDM and the PSTN? That is the question raised by Google in their most recent response to the FCC’s efforts to establish new guidelines for the USF and ICC. Google refers to this backward looking approach as “Letting the Voice Network Tail Wag the Internet Dog”.
Google points out that in the year 2000, PSTN interstate and intrastate voice traffic was more than twice the US Internet traffic or 66,000 Terabytes (TB)/month versus 28, 000 TB/month. However, over the next ten years the relationship between these numbers flipped dramatically. PSTN voice traffic has plummeted to 36,000 TB/month while Internet traffic in North America has grown to 5,723,000 TB/month. Furthermore, the Internet traffic includes 21,000 TB/month of VoIP transported by ITSPs such as Broadvox and service providers such as Cypress Communications, Skype and Google Voice.
Numbers such as these reflect the broader opinion that the FCC must consider the future direction of broadband access and utilization as it determines the new rules. As stated by Google “…per-minute voice traffic origination and termination charges are a persistent but unwelcome relic from the circuit-switched telephony era, and not best-suited for modern IP traffic and networks.” It is correctly noted during this exchange between Google and the FCC that IP network costs are best represented through an understanding of capacity rather than minutes of use.
There will be no reforms for several years, but if not correctly devised, the impact on the Internet and IP related services and applications will be devastating. Cost will rise, innovation will be hampered and competition reduced. None of this would be good for America and, in turn, the global IP community. So, FCC, take a lesson from this year’s crop of politicians and look towards the future, not the past, to achieve the desired reform. We will be better served by reform that is markedly different and reflective of the direction of IP Carrier networks and agreements.
Just make sure that the rule makers know it is “Twitter” and not “Tweeter”.