Interconnection’s untested waters

You may be surprised at some of interconnection’s “untested waters.” Shortly after enactment of the Telecommunications Act of 1996, the FCC issued the Local Competition Order. This edict spelled out new interconnection rules for telecommunications carriers.

After five years and many regulatory battles between local exchange carriers and potential competitors, including wireless providers, things have settled down a bit, interconnection-wise.

Wireless carriers have reached interconnection agreements that somewhat resemble the FCC’s intentions in the Local Competition Order; nevertheless, interconnection between networks remains complex. Some controversial facets of interconnection are still being resolved by the FCC or federal courts. Some of the “untested” areas include:

• responsibility for SS7 connections.
• unbundled network elements for wireless.
• bill and keep for paging, cellular and CLECs.

SS7

Common channel signaling, which uses Signaling System 7 protocol, sends call set-up and other information between the originating central office and the terminating central office in the public-switched telephone network. SS7 uses a separate packet data network to transmit the call data.

Call set-up information must be sent to process calls in any network. Unfortunately, the Local Competition Order was clear with respect to the responsibility for trunk facilities between networks, yet silent about who is responsible for the signaling facilities.

With two-way networks where traffic flows in both directions, the costs of the SS7 signaling data circuits are sometimes shared by both carriers, although in many cases the wireless carrier ends up paying for all of the signaling facilities.

Uniquely, in the case of a paging carrier, all traffic is one-way, from landline to mobile, so shouldn’t the LEC provide the signaling along with the rest of the call? It took the FCC’s TSR Wireless Order of June 2000 and an appeal to federal court (denied in June of 2001) to affirm that the LECs were responsible for delivering call traffic to the paging carriers. This responsibility includes the costs of trunk facilities up to the point of interconnection with the paging carrier.

However, if a paging carrier wants to use SS7 signaling, the LECs demand that the paging carrier pay for the SS7 data circuits. Logic would dictate that signaling is an integral part of any call traffic and, therefore, the carrier originating the call traffic should be responsible for the signaling trunks.

Unfortunately, almost all paging carriers use MF trunk signaling instead of SS7. But number portability is coming around the bend, and SS7 connections for paging may be a future necessary evil. If this happens, some paging carrier is likely to request delivery of SS7 signaling. It is just as likely that eventually the FCC will be asked to interpret their rules on this obscure issue.

UNEs

Unbundled network elements are the prices charged for segmented parts or pieces of the LEC’s network. In essence, UNEs are the wholesale prices charged for LEC facilities or services. Traditionally, competitive local-exchange carriers use unbundled elements from the incumbent LEC to offer subscriber line services to their customers.

For example, the subscriber landline from the LEC central office to the residence or business location can be “unbundled” so the CLEC can connect the line to its own services. UNEs also apply to such things as T-1 lines and other leased line facilities. Almost all wireless carriers’ networks are interconnected with other carrier networks using T-1 or T-3 level digital lines. T-1s are also used to connect mobile telephone switching offices with remote cell sites.

The LEC’s standard tariff for services and facilities can be considered to be the retail prices.

UNEs are the wholesale prices for these same facilities and services. All telecommunications carriers are eligible for UNE pricing according to the FCC’s rule §51.307.

Unfortunately, the LECs have fought tooth and nail to keep wireless carriers from using UNE pricing on interconnection facilities. The LECs have maintained that UNEs do not apply to “entrance facilities.” These are the trunk lines going from the LEC office to the wireless carrier’s point of interconnection. The entrance facility argument is still awaiting an FCC ruling.

LECs use other tactics to discourage the use of UNEs, such as installing (and billing) only the exact ordered parts of the complete circuit. Heaven forbid the hapless wireless carrier should forget to order one small item. You get the bill, but the circuit doesn’t work.

In some states, such as Michigan, wireless carriers have asked the state utilities commission to force the LECs to provide UNEs under the same terms and conditions that they offer to CLECs. They hope that this long and expensive process will achieve compliance with the FCC’s 1996 order. Many smaller paging and SMR carriers have yet to attain UNE pricing for their interconnection facilities.

Bill and keep

Since the early days of telephony, the originator of a call has been expected to pay for the call to be delivered to the receiving end. In the FCC’s 1996 Local Competition Order, the FCC went to great lengths to spell out the exact amounts carriers could charge each other for “terminating” calls. In theory, this principle was great news for paging but turned out to be mostly a dud.

The real battles have occurred between cellular carriers and LECs over termination fees. Obviously, when cellular carriers mostly originated calls and, therefore, had to pay the LECs’ call termination rates, the LECs wanted to maintain high fees for terminating calls, even though they had to pay the same fees to cellular carriers to terminate calls from landline to mobile. LECs were happy for a while. But then along came Internet service providers to upset the apple cart. They figured out a way to collect fees for terminating lengthy dial-up Internet calls originated by the LECs’ subscribers. The LECs have failed many times to have local Internet calls classified as long distance by state regulators. And after failed attempts to get Congress to act, the LECs have concentrated their lobbying efforts on the FCC for relief from having to pay instead of collect.

The effort appears to be working. The FCC has proposed a new regime whereby carriers receive no compensation for terminating calls. This is wonderful for a carrier that originates a lot of calls, such as a cellular carrier, but is not so hot for a carrier that only terminates calls, such as a paging carrier. The “bill and keep” FCC proposal not only has caused panic among Internet service providers, but it will certainly cause other telecommunications providers to develop some schemes to take advantage of this new opportunity.

Meanwhile the LECs may not have considered the effect of this FCC proposal on their local measured rate calling revenues when competing carriers can offer unlimited local calling, thanks to the elimination of termination fees. This proposed regime is certain to roil the waters at the FCC.

With all these possibilities for changes in regulation, interconnection’s untested waters have many sharks and submerged shoals.

Jackson is president of Interconnection Services, Okemos, MI.