Readers may recall past articles where I whined about the telecommunication issues that have come before the legislature. These incredibly complex and technical mind-boggling battles challenge the reasoning ability of consumers and require ex-tensive fact-finding before reaching a conclusion. The recent Public Utilities Commission (PUC) decision regarding reciprocal compensation for data traffic is a prime example of how misinformation or having only part of the facts will lead to an incorrect understanding. As a result of the many letters I have and am continuing to receive, I offer this explanation.

Reciprocal compensation is a payment that incumbent local exchange carriers (ILECs, such as the former U.S. West, now QWest) are required to pay to competitive local exchange carriers (CLECs) to terminate calls. The idea was originally established to compensate providers of local voice calls when they originate on one provider's network and terminated on another provider's network. Reciprocal compensation is determined on the state level and established in interconnection agreements on a per minute of usage basis. Billing on a per-minute-of-usage basis was nominal when voice calls (non-data) typically lasted an average of 2 to 3 minutes. However, with the explosion of the Internet, on average, data calls last 23 minutes and over. Small business and customers who go on-line at home to connect to chat rooms, e-commerce and the Web can easily extend those calls to 2-3 hours or more. Therein lies the rub.

If, under reciprocal compensation, the terminating provider was to be compensated for the use of their network on a per minute of usage basis, why would a CLEC not solicit Internet Service Providers (ISPs) to use their networks since Internet calls typically last 10 to 100 times longer than voice calls? One must keep in mind that, particularly in Southwestern Colorado, that the vast majority of these calls originate on the U.S. West network resulting in many millions of dollars that can be billed by CLECs since the existing law was meant to govern voice calls, not data.

Now, we are getting to the "what’s this mean to me" part. If one local provider has to provide payments to another local Internet Service Provider for Internet traffic under the reciprocal compensation rules, basic local exchange service will have to go up in price to subsidize Internet usage. And, if basic local exchange service prices have to go up to subsidize Internet usage, non-Internet usage customers (many on fixed incomes) would be subsidizing Internet usage customers. With the exponential increase in Internet usage, this system had to change.

The PUC decided that the compensation method for data traffic should not be reciprocal compensation but "bill and keep" instead. In this arrangement, neither interconnecting company charges the other for traffic exchanged between networks. Each company obtains its revenue from its own customers. The PUC decision demonstrates that the customer making the telephone call to the Internet is viewed as a customer of the Internet Service Provider (ISP). The Commission stated, "Sprint [and other CLECs] may, and should, recover its costs for handling Internet traffic from its own customers and the Internet provider, not from a third party such as U.S. West." Thus, the unintended economic distortions to the voice market will be eliminated and not negatively impact basic local service pricing.

Almost every letter I received insinuated or stated outright that the PUC decision would increase Internet rates. I am prone to agree with Micki Hackenberger, director of public relations for Quest, when she stated in a recent letter, " I believe many of the letters and phone calls are the result of inaccurate information being sent to customers of certain Internet Service Providers (ISP) in an attempt to generate a legislative reaction and/or impact future PUC deliberations."

Internet Service Providers may be a big part of the reason our service has diminished to the "all circuits are busy" norm we are currently experiencing. I was reminded recently by the former U.S. West that the PUC required them to build an infrastructure for voice service, not data. While that is very true, one would think that this telecommunications giant would have recognized the trends and not left us in the "telecommunications dark ages." Fortunately, that condition is soon to change.

The recent PUC decision simply states that ISP-bound data calls are not entitled to reciprocal compensation. The decision does not require prices to go up, only that one local service provider cannot charge another local service provider for Internet traffic. Accordingly, non-Internet phone customers will not be subsidizing Internet users. As the PUC stated in their release, "[This decision] is in the best interest of all telephone company ratepayers."

There are many other factors relative to this issue that I do not have room to discuss. If any reader wishes to discuss this further or take umbrage with my position, I welcome your call or e-mail.