Before the Federal Communications Commission Washington, D.C ) ) ) ) ) ) )

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1 Before the Federal Communications Commission Washington, D.C In the Matter of Vermont Telephone Company Petition for Declaratory Ruling Whether Voice over Internet Protocol Services are Entitled to the Interconnection Rights of Telecommunications Carriers. WC Docket No REPLY COMMENTS OF NATIONAL EXCHANGE CARRIER ASSOCIATION, Inc., NATIONAL TELECOMMUNICATIONS COOPERATIVE ASSOCIATION, ORGANIZATION FOR THE PROMOTION AND ADVANCEMENT OF SMALL TELECOMMUNICATIONS COMPANIES, and INDEPENDENT TELEPHONE AND TELECOMMUNICATIONS ALLIANCE The National Exchange Carrier Association, Inc. (NECA, the National Telecommunications Cooperative Association (NTCA, the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO, and the Independent Telephone and Telecommunications Alliance (ITTA (the Associations hereby file this joint Reply to comments on the Petition for Declaratory Ruling 1 filed by Vermont Telephone Company (VTel in the above-captioned proceeding. 2 1 Petition for Declaratory Ruling Whether Voice over Internet Protocol Services are Entitled to the Interconnection Rights of Telecommunications Carriers, WC Docket No , (filed Apr. 11, 2008 (VTel Petition. 2 Pleading Cycle Established for Comments on Vermont Telephone Company s Petition for Declaratory Ruling Regarding Interconnection Rights, WC Docket No , Public Notice, DA (rel. Apr. 18, (Public Notice. 1

2 I. THE COMMISSION SHOULD TAKE THIS OPPORTUNITY TO CLARIFY RESPONSIBILITIES OF INTERCONNECTING CARRIERS AND VOICE SERVICE PROVIDERS. All commenters in this proceeding agree that interconnection rights under section 251 of the Telecommunications Act of 1996 (the Act extend only to telecommunications carriers. 3 With respect to the particular interconnection request at issue, Comcast Corporation (Comcast asserts its affiliate, Comcast Phone of Vermont, LLC (Comcast Phone, is the entity requesting interconnection with VTel as a carrier authorized to provide wholesale telecommunications services under Vermont law. 4 Although Comcast admits Comcast Phone furnishes such services to only one customer, Comcast IP Phone II, LLC ( Comcast Digital Voice, 5 another Comcast affiliate, it claims the Commission must follow the precedent established in its Time Warner Interconnection Order 6 and affirm that Comcast Phone is entitled to interconnection with VTel under sections 251(a and (b of the Act. 7 Echoed in comments is VTel s concern that Comcast Phone is not, in fact, acting as a telecommunications carrier in its own right, as the Time Warner Interconnection 3 E.g., ITTA at 2, Verizon at 3, AT&T at 1, Qwest at 2, Embarq at 3, Skype at 1, 7, Comcast at 5, Cal. PUC at 2-3, Feature Group IP at 7. 4 Comcast at 11, Vermont Department of Public Service at Comcast at 2 and at 8, n.24. Comcast explains that Comcast Phone is obligated under Vermont law to offer comparable wholesale services to others within the state and that it has posted a service guide on Comcast.com s website. Id. 6 See Time Warner Cable Request for Declaratory Ruling that Competitive Local Exchange Carriers May Obtain Interconnection Under Section 251 of the Communications Act of 1934, as Amended, to Provide Wholesale Telecommunications Services to VoIP Providers, Memorandum Opinion and Order, 22 FCC Rcd 3513 (2007 (Time Warner Interconnection Order. 7 Comcast at 5-6. See also NCTA at 2, Bright House at 3-4, Feature Group IP at 2. 2

3 Order requires, 8 but is instead an entity established simply to enable its affiliate, Comcast Digital Voice, to cherry pick regulatory rights while evading regulatory obligations. As NTCA points out, for example, 9 the VTel petition is distinguishable from the issues raised in the Commission s 2007 Time Warner Interconnection Order in that this is the first time the Commission has been asked to decide whether an integrated VoIP provider (i.e., one not using a third-party CLEC to provide IP-based services may obtain interconnection rights under sections 251 and 252 of the Act. 10 As a policy matter, VTel s petition amply demonstrates the need for Commission confirmation as to the regulatory responsibilities of interconnected VoIP providers and wholesale carriers obtaining termination services on their behalf. Comments in this proceeding and related proceedings reveal that interconnected VoIP providers and associated wholesale carriers are doing everything they can to evade responsibilities normally required of carriers, particularly with respect to compensating network providers for traffic termination. The California PUC, for example, describes at length the problems it has encountered attempting to force Global NAPS, a CLEC apparently specializing in providing interconnection services to VoIP providers, to live up to its regulatory obligations: 8 See Time Warner Interconnection Order at NTCA at 2, A number of commenters point out that the question of whether Comcast Phone is actually functioning as a telecommunications carrier requires a factual inquiry. E.g., Feature Group IP at 8, AT&T at 5, ITTA at 4. The Vermont DPS states in this regard that Comcast Phone is certificated by the Vermont Public Service Board to provide telecommunications services within Vermont, and asserts the Commission cannot question a state commission s determination that an entity is both qualified to offer local exchange service and has the right to request interconnection from other telecommunications carriers. Vermont at

4 In the California litigation, Global NAPs was able to obtain interconnection agreements after receiving a California Certificate of Public Convenience and Necessity (CPCN, only to argue later that it did not owe compensation to other carriers because the traffic in question was VoIP in nature, and thus not subject to the interconnection agreement and to state oversight. The FCC should not allow carriers to take advantage of the lack of clarity in FCC policies to advance their own interpretations. Further delay by the FCC in addressing these issues will result in the CPUC and other parties expending many more hours litigating questions related to the very matters VTel has raised in its petition. 11 Similar concerns were expressed by the Washington Utilities and Transportation Commission (WUTC, which complains that ongoing regulatory uncertainties at the federal level make it impossible for state commissions to address legitimate issues surrounding interconnection agreements involving CLECs and interconnected VoIP providers. 12 The WUTC has also encountered problems with interconnected VoIP providers who seek assistance from the commission but are quick to point out the [W]UTC has no jurisdiction over rates, terms and conditions of their services. 13 This gives VoIP providers the best of both worlds, cherry-picking their regulatory status with state commissions so as to have many rights but avoid necessary obligations. 14 As a result of these uncertainties, Association members increasingly terminate traffic for which they are not appropriately compensated. 15 In recent months, 11 Cal. PUC at Washington Utilities and Transportation Commission (WUTC at Id. at Id. at See, e.g., Embarq at 6 ( [t]he pendency of [the IP-Enabled Services proceeding] has prompted some VoIP providers and some telecommunications carriers handling calls to assert -- wrongly -- that their voice calls are not subject to the same rules as their more traditional voice competitors when they are routed to the public switched telephone network. The Commission should not tolerate such abuses and regulatory arbitrage.. See also AT&T at 4 (VoIP providers are all too happy to operate under a double standard with some refusing to pay terminating access charges for VoIP calls that terminate on the PSTN but who 4

5 representatives of a number of small, rural telephone companies have met several times with Commission staff to describe how CLECs, acting as agents for interconnected VoIP providers, flatly refuse to pay intercarrier compensation for the traffic they send to rural companies for termination. 16 Comments submitted in response to forbearance petitions submitted by Embarq and Feature Group IP 17 also illustrate problems carriers and state regulators are encountering with carriers who claim they are not responsible for payment of tariffed charges. 18 The Commission should not allow this situation to continue. The Time Warner Interconnection Order assumed that wholesale telecommunications carriers seeking interconnection on behalf of an interconnected VoIP provider would in fact bear responsibility for traffic they placed on the network under a section 251 arrangement, including obligations to compensate incumbent LECs for the termination of traffic. 19 Such arrangements were made an explicit condition to the section 251 rights provided in that order. 20 nevertheless assess jurisdictionalized terminating access charges for calls that they terminate to their VoIP customers that originate on the PSTN. 16 E.g., Letter from Joe A. Douglas, NECA, to Marlene H. Dortch, FCC. WC Docket No , CC Docket No (May 23, 2008, Letter from Joe A. Douglas, NECA, to Kevin J. Martin, Chairman, FCC, CC Docket No (Nov. 13, 2007, Letters from Joe. A. Douglas, NECA, to Marlene H. Dortch, FCC, CC Docket No (filed on Oct. 16, 2007, July 25, 2007, and May 2, Petition of the Embarq Local Operating Companies for Limited Forbearance Under 47 U.S.C. 160(c from Enforcement of Rule 69.5(a, 47 U.S.C. 251(b, and Commission Orders on the ESP Exemption (Jan. 11, 2008 (Embarq Petition; Feature Group IP Petition for Forbearance Pursuant to 47 U.S.C. 160(c from Enforcement of 47 U.S.C. 251(g, Rule (b(1, and Rule 69.5(b, WC Docket No (filed Oct. 23, 2007 (Feature Group IP Petition. 18 See e.g., Comments filed in WC Docket No. 08-8, (Embarq Petition proceeding by AT&T, Qwest, Ad Hoc Manufacturer Coalition, Montana Telecommunications Association, and CenturyTel (Feb. 19, Time Warner Interconnection Order at Id. The Bureau stated, however, it did not prejudge what intercarrier compensation was appropriate, or any other issue pending in the Intercarrier Compensation docket. Id. at 17. 5

6 While the Time Warner Interconnection Order seemingly makes clear that a wholesale carrier placing traffic on the network on behalf of other voice service providers is both technically and financially responsible for that traffic, disputes continue at both the state and federal levels. California describes a situation where an interconnecting wholesale carrier (Global NAPs claims it should not be subject to termination fees because it supposedly does not originate the traffic at issue. In Global NAPs view, the traffic originates with an ISP, which hands it off to Global NAPs, which then sends it to the local exchange carrier for termination. But as California points out, this is a distinction without a difference in that every phone call originates with a customer rather than a carrier. 21 Some interconnecting carriers assert that the language in the Time Warner Interconnection Order permitting wholesale carriers to obtain interconnection on behalf of VoIP providers under a section 251 interconnection agreement automatically means all traffic is exempt from the application of tariffed switched access charges. 22 This is plainly incorrect. The fact that an interconnecting carrier obtains interconnection under section 251 of the Act does not transform interexchange traffic into local traffic. Similarly, the fact a call might have been originated on a broadband connection in IP format does not magically transform the ordinary voice telecommunications services offered by entities such as Comcast Digital Voice into enhanced services. The Commission has repeatedly determined that interconnected VoIP services are viewed by consumers as direct substitutes for traditional voice telephony services. 23 Moreover, as 21 Cal. PUC at E.g., Feature Group IP at E.g., Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Customer Information, CC Docket No , IP- 6

7 far back as 2004, the Commission stated its belief that any service provider that sends traffic to the PSTN should be subject to similar compensation obligations, irrespective of whether the traffic originates on the PSTN, an IP network, or on a cable network. 24 There is no basis for claims by interconnecting carriers that interexchange traffic is automatically exempt from access charges simply based on the technology used to originate the call. 25 Accordingly, if the Commission determines that Comcast Phone is entitled to interconnection with VTel under section 251 of the Act, it should also confirm that Comcast Phone and similarly-situated entities who obtain carrier-type interconnection on behalf of affiliated or non-affiliated voice service providers are responsible for payment of intercarrier compensation amounts for that traffic. Such payments must be based on Enabled Services, WC Docket No , Report and Order and Further Notice of Proposed Rulemaking, 22 FCC Rcd 6927 (2007, at 56; Universal Service Contribution Methodology, WC Docket No , Federal State Joint Board on Universal Service, CC Docket No , 1998 Biennial Regulatory Review Streamlined Contributor Reporting Requirements Associated with Administration of Telecommunications Relay Service, North American Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms, CC Docket No , Telecommunications Services for Individuals with Hearing and Speech Disabilities, and the Americans with Disabilities Act of 1990, CC Docket No , Administration of the North American Numbering Plan and North American Numbering Plan Cost Recovery Contribution Factor and Fund Size, CC Docket No , Number Resource Optimization, CC Docket No , Telephone Number Portability, CC Docket No , Truth in Billing Format, CC Docket No , IP-Enabled Services, WC Docket No , Report and Order and Notice of Proposed Rulemaking, 21 FCC Rcd 7518 (2006, at 2; and Communications Assistance for Law Enforcement Act and Broadband Access and Services, ET Docket No , RM-10865, First Report and Order and Further Notice of Proposed Rulemaking, 20 FCC Rcd (2005, at IP-Enabled Services, WC Docket No , Notice of Proposed Rulemaking, 19 FCC Rcd 4863 (2004, at 33, Even some IP service providers appear to recognize that a substantial portion of interconnected VoIP services are in fact merely offered as telephone replacement services and should be regulated accordingly. See, e.g., Skype at

8 the actual nature of the traffic involved (i.e., reciprocal compensation for local traffic, and tariffed access charges for interstate and intrastate interexchange traffic. 26 II. CONCLUSION Virtually all commenters agree that only telecommunications carriers are entitled to demand interconnection under section 251 of the Act. The specific question of whether Comcast Phone is functioning as a telecommunications carrier as defined by the Act is a matter for factual determination. However, the Commission should take this opportunity to confirm that under the Time Warner Interconnection Order carriers who obtain interconnection on behalf of interconnected voice service providers are responsible for paying intercarrier compensation for that traffic based on the actual nature of the traffic. Specifically, the Commission should affirm that under such arrangements tariffed interstate and intrastate access charges apply for traffic that originates outside the local exchange area. Respectfully Submitted, NATIONAL EXCHANGE CARRIER ASSOCIATION, Inc. June 9, 2008 By: Richard A. Askoff Its Attorney 80 South Jefferson Road Whippany, NJ ( The Commission should also confirm that signaling data sent with such calls must reflect the true calling party number (CPN, i.e., the number of the end user customer originating the call, and that carriers may not substitute numbers of intermediate switches or IP Platforms in order to disguise the jurisdiction of the call. 8

9 NATIONAL TELECOMMUNICATIONS COOPERATIVE ASSOCIATION By: /s/ Karlen Reed Karlen Reed Regulatory Counsel 4121 Wilson Blvd. 10th Floor Arlington, VA ( ORGANIZATION FOR THE PROMOTION AND ADVANCEMENT OF SMALL TELECOMMUNICATIONS COMPANIES By: /s/ Stuart Polikoff Stuart Polikoff Director of Government Relations 21 Dupont Circle NW Suite 700 Washington, DC ( INDEPENDENT TELEPHONE AND TELECOMMUNICATIONS ALLIANCE By: /s/ Joshua Seidemann Joshua Seidemann Vice President, Regulatory Affairs 975 F Street NW Suite 550 Washington, DC (

10 CERTIFICATE OF SERVICE I hereby certify that a copy of the Associations Reply was served this 9 th day of June, 2008 by electronic filing and to the persons listed below. The following parties were served: Marlene H. Dortch Secretary Federal Communications Commission th Street, SW Washington, DC Competition Policy Division Wireline Competition Bureau Federal Communications Commission th Street, SW Washington, DC CPDCopies@fcc.gov Best Copy and Printing, Inc. Room CY-B th Street, SW Washington, DC fcc@bcpi.web By: /s/ Elizabeth R. Newson Elizabeth R. Newson