Pins and Needles

The FCC voted to reform the Universal Service Fund and potentially eliminate the InterCarrier Compensation (ICC) system this week and much to my surprise there were no screams of protest. Perhaps, because the FCC, Congress and the carriers now that the system must change to meet the demand of today and position for the needs of the future. All interested parties acknowledge that the USF and ICC were designed in the early 1900s and no suit today’s communications and technology infrastructure. Moreover, the wastefulness and gaming the system such as traffic pumping has become wide spread. 

As with most early statements made by the FCC, it is attempting to establish the “guiding principles” that will aid in the development of more detailed regulations and rules. The Commission has established the need for immediate remedies to cut waste, reward efficiency and close various loopholes.  To move to a technology independent methodology of providing a form of universal service, the FCC want to consolidate multiple programs into something called the Connect America Fund (CAF).

Why do you as channel partners care? In the long-term these solutions will expand connectivity for businesses and consumers, thereby expanding your markets and the markets of your customers. You should also care because of the unknown. Since the FCC acknowledges that wireless communications, calling programs such as those created by Skype and Google, and broadband in general, was not meeting the true purpose of the USF or ICC. However, therein lies another key unknown. Broadvox, Internet Telephony Service Providers and Internet Service Providers do not know how the changes will affect our cost. If our cost to conduct business is materially increased, then we will need to pass on those costs, accept lower margins or change our business strategies and tactics.

The future of reform is needed but IP communications carriers will be on pins and needles as we wait for the details.

See you on Monday!