II. Summary
This report addresses and resolves the most significant issues in this arbitration as follows:
(i) What intercarrier compensation applies to Internet protocol (IP) enabled services traffic between the Internet and the Public Switched Telephone Network (PSTN)?
The Federal Communications Commission (FCC) has recently determined that IP-enabled services traffic is jurisdictionally exclusively interstate for purposes of regulating the terms and conditions for the exchange of such traffic.3 This Commission nevertheless has the authority and duty to ensure that the parties' interconnection agreement is consistent with the requirements of federal law. Although the issue is currently pending before the FCC,4 at present access charges do not apply to IP-enabled services traffic. Absent a change in law that imposes a different intercarrier compensation regime on IP-enabled services traffic, the parties are directed to exchange such traffic subject to reciprocal compensation.
(ii) What intercarrier compensation applies to ISP-bound traffic between originating parties and ISPs that have a virtual, but not geographic, presence in the same local exchange as the originating parties?
Pursuant to the FCC's ISP Remand Order,5 Internet Service Provider (ISP)-bound traffic is subject to a fixed rate of $0.0007 per minute of use. This rate applies only to ISP-bound traffic to ISPs that have a geographic presence in the same local exchange as the originating parties. It does not apply to interexchange or FX (foreign exchange) ISP-bound traffic.
(iii) Should traffic be combined on local interconnection trunks or should separate trunk groups be maintained to carry discrete types of traffic?
Local trunk groups may carry local, ISP-bound and IP-enabled traffic. Separate trunk groups shall be maintained to carry interexchange traffic, to the extent that Level 3 intends to transport such traffic.
(iv) Is transit traffic, e.g., traffic that is originated or terminated by a third party local service provider, subject to arbitration under Sections 251 and 252?
Transit traffic is subject to arbitration under Sections 251 and 252 and shall be provided for in this agreement.
(v) Should this agreement adopt the Unbundled Network Elements (UNE) provisions of the prior interconnection agreement, or eliminate certain elements and/or adopt new provisions for other elements, pending the FCC issuance of final unbundling rules?
Level 3 is not entitled to the rates, terms and conditions for declassified unbundled network elements contained in the parties' current interconnection agreement. Pursuant to USTA II6 and the FCC's Interim Order,7 SBC is not required to provide unbundled access to declassified unbundled network elements.
3 In re Vonage Holdings Corp. Petition for Declaratory Ruling Concerning an Order of the Minnesota Public Utilities Commission, WC Docket No. 03 211 (rel. Nov. 9, 2004) (Vonage Order).
4 In re IP-Enabled Services, WC Docket No. 04-36 (rel. March 10, 2004) (IP-Enabled Services NPRM).
5 Order on Remand and Report and Order, In re Intercarrier Compensation for ISP-Bound Traffic, 16 FCC Rcd. 9151 (2001) (ISP Remand Order).
6 United States Telecom Ass'n v. FCC, 359 F.3d 554 (D.C. Cir. 2004) (USTA II), cert. denied, 125 S.Ct. 313, 316, 345 (2004).
7 Unbundled Access to Network Elements Order and Notice of Proposed Rulemaking, WC Docket No. 04-313, CC Docket No. 01-338 (rel. Aug. 20, 2004) (Interim Order).
