Whippany, NJ - April 22, 2004 - The FCC rejection of AT&T’s VoIP (Voice over Internet Protocol) petition is welcome news to local telephone companies across the country. The ruling confirms that a phone-to-phone VoIP call should be treated no differently than a traditional telephone call.  Any company that originates and terminates long distance telephone calls on the public switched network, using ordinary telephones and without providing enhanced functionality, must pay access charges and must contribute to the Universal Service Fund – even if that company uses Internet Protocol (IP) transport in the course of the call. 

NECA has advocated that the rules must be the same for all providers, VoIP and circuit switched, using the public network. Small, midsize and rural telephone companies are entitled to compensation for the use of their networks and rely on access charges for their continued viability. These local telephone companies incur the same costs to originate and terminate VoIP calls as they do for regular calls. Therefore, all VoIP providers using the public network must pay access charges so local carriers can recover those costs.  

The FCC decision provides much-needed clarity to the industry, at least for the moment.  The FCC has initiated a separate proceeding to consider the regulatory treatment of all IP enabled services and has stated that its conclusions in the AT&T VoIP order do not preclude it from taking a different approach in that proceeding.