Intercarrier Compensation: One Component of Telecom Reform

Publication Date: April 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Media, telecommunications, and information

Type:

Abstract:

Nondiscriminatory intercarrier compensation -- the payments that interconnected carriers make to one another when more than one carrier's network must be used to complete a telephone call or other electronic communication -- is the linchpin of a competitively neutral regulatory regime. Under current statutory requirements and regulatory rules, these payments vary widely (from 0.1 cents to 5.1 cents per minute), depending on whether the interconnecting party is a local exchange carrier, a long distance carrier, a wireless carrier, or an information service provider, and whether the service is classified as telecommunications or information, local or long distance, or interstate or intrastate -- even though in each case basically the same transport and switching functions are provided. There is general agreement that in today's competitive environment, intercarrier compensation reform is needed because the current regime: