Could cuts in telcos' 'terminating rates' be passed on to consumers?

By Jacqueline Emigh, BetaNews

August 8, 2008, 1:13 PM

Users who want to lower their cell phone bills could be in for a treat -- or maybe not -- if the FCC responds favorably to a petition filed jointly by the nation's top three wireless providers, backed by powerful industry groups.

In their petition to the US Federal Communications Commission, AT&T, Sprint Nextel, and Verizon Wireless -- along with the CTIA, the Telecommunications Industry Association (TIA), the VON Coalition, and other parties -- are mutually seeking uniformity around, and reductions in, the carrier "terminating rates" which service providers charge each other for helping to carry one another's traffic over networks.

The coalition is asking the FCC to initially clarify "the regulatory requirements associated with the fastest growing segment of the communications industry -- Internet Protocol-based technologies."

But the petition also requests the FCC to issue two rulings. One would state that IP-based voice services, if regulated at all, should be subject only to federal jurisdiction. The other would establish "uniform compensation rules" applicable to all traffic exchanged on the public switched telephone network (PSTN).

Quite significantly to carriers -- and possibly, to subscribers, too -- the petitioners are recommending that the new rules "ultimately should result in uniform terminating rates for all carriers at a level below existing inter-carrier compensation rates."

Specifically, the filing is looking for a rate no higher than seven cents per minute of use.

Yet if AT&T, Sprint, Verizon Wireless, and the other petitioners do get their way with the FCC, it still remains to be seen whether any of the savings gained will be passed along to wireless subscribers.

In recent months, some users have shown their impatience with mobile service providers by hauling carriers into court about a couple of other types of billing items: early termination fees (ETFs), and charges assessed by some carriers for incoming SMS/MMS text messages.