AT&T loses fee fight over some Web calls
Wed Apr 21, 2004 07:05 PM ET
By Peter Kaplan
WASHINGTON, April 21 (Reuters) - U.S. communications regulators on Friday dealt a blow to AT&T Corp. (T.N: Quote, Profile, Research) , ruling that the telephone company must pay higher fees for connecting long-distance calls that are carried partly over the Internet.
A unanimous Federal Communications Commission (FCC) decided the biggest long-distance carrier improperly treated calls that only briefly traveled the Internet backbone as local calls, and therefore paid local phone companies fees lower than required.
"The carrier has long been obligated to pay access charges for this service and we unanimously confirm that it still is required to do so," FCC Chairman Michael Powell said in a statement.
The FCC did not address the question of whether AT&T owed back fees for the lower connection fees it started paying over a year ago.
AT&T sharply criticized the decision, saying the FCC had reneged on past promises to "resist applying legacy regulatory regimes to Internet telephony."
"The order will give real pause to any carrier that owns an IP (Internet Protocol) network or otherwise innovates in reliance on FCC policies that today prove inconstant," AT&T said in its statement.
The decision was a win for local phone companies like SBC Communications Inc. (SBC.N: Quote, Profile, Research) , as the FCC rejected the argument that AT&T can pay lower rates because Internet calls are not subject to higher FCC-mandated access charges.
"We're gratified the FCC provided the correct, obvious and only answer to end AT&T's illegal self-help scheme," SBC Senior Vice President James Smith said in a statement.
SBC, the No. 2 local telephone company, has said it has lost between $200 million and $450 million in revenue because it has been paid lower rates for some calls transmitted over the Internet even though the calls still connect to local telephone networks.
The FCC has been weighing what connection fees apply to calls over the Internet, a pathway expected to grow quickly as carriers look for ways to cut costs.
Telephone, cable and Internet providers are racing to roll out Internet-based telephone services, known as Voice over Internet Protocol (VoIP), but they have been awaiting signals from the FCC on the rules of the road.
Powell insisted he is committed to the idea that Internet telephone service should be lightly regulated.
Even though the AT&T calls in question use Internet technology, from a consumer's perspective, Powell said, they are still "the same plain old telephone service," with none of the added features of Internet phone service. |
