Bell Atlantic Files to End Reciprocal Compensation

Bell Atlantic is one of
the first local telephone company to petition state regulatory
agencies for relief from disbursing reciprocal compensation payments to
Common Local Exchange Carriers.

Since the FCC ruled that Internet traffic
is inherently interstate in nature on Feb. 25th, a tug-of-war over
millions of dollars in reciprocal compensation payments from regional Bells to CLECs
has begun. The Commission concluded that the “jurisdictional nature of
ISP-bound traffic is determined by the nature of the end-to-end
transmission between an end user and the Internet,” and thusly is interstate

Bell Atlantic filed a petition with the Commonwealth of Massachusetts’ Department of Telecommunications &
last week and is currently placing reciprocal compensation
monies in an escrow account until the dispute is resolved by the state
regulatory agency.

Mark Mathis, Bell Atlantic’s senior vice president, said the petitions
Bell Atlantic has filed in Massachusetts are pursuant to modifying an
earlier order by the Massachusetts DTE. “This has nothing to do with
charges, it has everything to do with whether we have to pay CLECs,”
according to Mathis.

Bell Atlantic has also filed petitions with regulatory agencies in Maryland
and New York seeking to modify the respective state’s original orders to
pay reciprocal compensation. Bell Atlantic has estimated that the company’s
payments to CLECs would total more than $350 million this year.

“We’re the only one’s paying for Internet access by the minute
through reciprocal compensation on interconnection agreements. We simply
want to stop paying by-the-minute,” Mathis said.

With billions of dollars in reciprocal compensation agreements on the line,
other RBOCs are expected to follow suite and file for further modifications
from state regulatory agencies. In essence, RBOC will demand an end to
reciprocal compensation.

FCC Chairman William E. Kennard maintains that the FCC’s Feb. 25th ruling
has not opened the door for per-minute Internet access charges. “The FCC
has reconfirmed the Internet’s exemption. Consumers will see no new charges
on their Internet or phone bills,” according to Kennard.

Bell Atlantic provides wireline voice and data services as well as wireless
services. Bell Atlantic companies are also among the world’s largest
investors in high-growth global communications markets, with operations and
investments in 23 countries world-wide.

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