Will the VoIP Symmetry Rule Encourage Internet Calls?

A Federal Communications Commission decision has gone a long way to clarify the so-called VoIP Symmetry Rule that allows Internet phone companies to collect charges withheld by landline and wireless carriers, including AT&T and Verizon. 

The rule was originally adopted by the FCC in 2011 to enable VoIP providers to recover charges under the same terms as landline carriers.

Many telephone users don’t see how often calls are shared and handed off by different telecommunication networks. They can include networks running physical copper wire and those using fiber optics as well as mobile wireless networks. Thus, any call can end up managed by several companies and networks.

The FCC regulation allowed all local telephone companies, including internet phone companies, to recover charges from carriers that ended calls. The idea was to provide support for the development of local VoIP carrier networks.

In 2015, the FCC extended the application of the VoIP symmetry rule to all VoIP providers but the move was voided by a U.S. Circuit Court of Appeals.

New order issued

The FCC recently issued what it calls an order on remandOpens a new window in an effort to clarify the situation for VoIP companies. In essence, it said that a so-called “last mile physical connection” to homes or businesses should be considered as meeting an end-office switching definition.

The FCC says the definition should provide certainty to all carriers as to including VoIP services within this framework, while at the same time facilitating ongoing investment into next generation Internet Protocol (IP) networks for phone calls.

Perhaps more important, it should also mean fewer costly inter-carrier competition disputes, especially involving Verizon and AT&T, which generally refused the pay the “last mile” charges to VoIP carriers that transmit calls over the internet until the final connection.

“This might seem like an arcane and weedy matter, and it is,” FCC Chairman Ajit Pai said. “But it’s also important. By limiting inter-carrier compensation charges to companies that are actually providing a physical connection, we’re ensuring that our rules provide an incentive to build out networks and continue the transition from traditional copper networks to modern IP-based networks that will support continued future innovation.”

Streaming phone calls protected

The decision establishes a precedent because it defines the features of “end office switching” in a TDM networkOpens a new window .  Since so-called “over-the-top” VoIP providers –  or companies streaming phone calls over the Internet – don’t actually connect with a last-mile network like Verizon’s or AT&T’s to a customer’s home, the companies aren’t entitled to collect access charges for performing that function.

The FCC says that the issue of whether over-the-top VoIP providersOpens a new window may assess end-office switching charges should be kept in perspective. The rules for end-office switching charges will change to provide “neutrality” in 2020. While the decision issued this month should help to resolve some lawsuits, its effect will be largely retroactive.

Key takeaways:

• The VoIP Symmetry Rule was established by the FCC to treat VoIP companies the same as traditional local network providers regarding claims for local-carrier compensation for delivering calls over the so-called ‘last mile’ of a connection.
• The ruling was always intended to provide further incentive and support for local network carriers that managed the start/end of calls that might be carried by bigger networks over longer distances.
• Most VoIP companies aren’t in fact managing these last-mile calls and consequently shouldn’t claim such compensation.
• A new bill and system will be introduced next year. These changes will have greater impact helping to resolve historic disputes rather than providing a future framework.