1. Intercarrier Compensation TC 310 June 3, 2008

2. Basic Concepts Originating Terminating Calling-Party's-Network-Pays (CPNP)‏ Bill-and-Keep Reciprocal Compensation Access Charges

3. Regulatory Arbitrage Local and Long Distance essentially identical  Does it matter where traffic comes from?  Some implicit subsidization still occurring CPNPs is current set up  Charge originator  No effect on terminating customer

4. Re-route through CLEC CLECs get TELRIC pricing for local x-fer Long Distance has to pay Access Charges Route traffic through CLEC  Work out deal/are affiliate  Strip “LD” tags  Possibly a Crime MCI

5. ISP Compensation Viewed as LD, calling website, 1 call Should pay access charges Exempt due to Enhanced label  Business line rate Switch to CLECs for free  ILECs pay CLECs  Arbitrary high, even pay ISPs for business

6. IP-to-PSTN Access or reciprocal compensation rates? Exemptions should just be for own customers  ILEC position VoIP perspective is to treat as local call Is traffic compensated at all?

7. Wireless Do they get access charges?  Detariffing suggests no  Private contract only Route through CLEC, pass back to Wireless

8. Big Picture Lesson Technologically similar Regulation Differs CPNP keeps this going Bill-and-Keep may break it Need to update compensation to reflect engineering realities