Kentucky Ensures Equitable IP Interconnections While FCC Dithers

January 25, 2019 | by Andrew Regitsky

Kentucky Ensures Equitable IP Interconnections While FCC Dithers

The FCC cannot blame the government shutdown for its shameful failure to act to ensure CLECs are able to obtain equitable Internet Protocol (IP) interconnections with ILECs.  For years we have pleaded with the Commission to treat IP interconnections exactly like time-division multiplexed (TDM) interconnections and require ILECs to negotiate prices, terms and conditions based on the requirements of section 251 of the 1996 Telecommunications Act.

Similarly, we also asked the Commission to adopt the negotiation process required by section 252’ which requires CLECs to present their interconnection agreements to state commissions for approval, requires these agreements to be made public, and allow others to opt into them.  Instead, the agency response was an ineffectual request to ILECs to negotiate IP interconnection “in good faith.”  The result being one-sided commercial IP interconnection agreements negotiated between CLECs and ILECs having overwhelming negotiating power.  You can take it to the bank that prices negotiated this way are much higher than if the section 251 rules applied.

Finally, a state has decided to fill the FCC’s absence on IP interconnection.  On December 26, 2018, the Kentucky Public Service Commission (KPSC) gave CLECs in that state a Christmas present when it released an Order in Case 2015-00283 affirming that, regardless of the technology used to exchange voice traffic between carrier's networks, the interconnection regimes under sections 251-252 apply, and a requesting carrier may file a petition with the Commission requesting an Order prescribing the rates, terms, and conditions of proposed interconnection with an ILEC.

As you might guess, ILECs in Kentucky, including AT&T Kentucky and Cincinnati Bell, opposed this conclusion.  They argued that the KPSC is not authorized under the 1996 Act to issue a declaration relating to federal law.  They also claimed that the KPSC should only address the issue of IP interconnection via an arbitration proceeding. The ILECs urge the Kentucky Commission to refrain from acting until the FCC rules on issues relating to IP interconnection.

Verizon, which would be helped by IP interconnection rules in Kentucky, joined its ILEC brethren and opposed any KPSC action.  It asserted that since the FCC has not mandated VoIP interconnection, IP interconnections must be negotiated through commercial agreements, which are not filed with state commissions. Thankfully, the KPSC disagreed.

After finding that it had the legal authority to act on IP interconnections in the absence of FCC actions.  The KPSC stated:

As discussed...there are three ways that a requesting carrier can obtain interconnection: (1) negotiation; (2) arbitration; and (3) adoption. After finding that [section] 251 allows a carrier to negotiate an interconnection agreement or file a petition for arbitration under [section] 252 and seek interconnection regardless of the underlying technology, the next logical finding is that interconnection agreements, regardless of the technology they employ, should be filed with the Commission so that they are available for adoption pursuant to [section] 251 (i). The Commission could not fulfill its duties under the 1996 Telecommunications Act if it found that negotiation and arbitration were subject to technology neutral principles, but not adoption.  (Order at pp. 16-17.)

The KPSC did observe correctly that if the FCC were to ever address this issue, its decision here could be overruled.

The Commission notes that the FCC, by its actions, could preempt the Commission from acting on IP-enabled services, or provide that a different interconnection regime applies other than the traditional regime found in [section] 251. Therefore, while the interconnection regime under [sections] 251 and 252 is technology neutral, FCC action could affect this interpretation. (id., at p. 17).

However, since the FCC has ignored repeated requests to address IP interconnection, it is highly unlikely to address it now.  Therefore, other states should take Kentucky’s lead and ensure that IP interconnection negotiations occur on a more equal and equitable basis.  

More generally speaking, the failure of the 1996 Act to address IP interconnection along with the vacuum it leaves regarding Internet regulation, means its time the Act was updated to reflect today’s technology.  Unfortunately, with the ever-growing partisan divide in Congress, there is little chance of that happening.  What a mess our country is in!