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Tuesday, 04 November 2008 07:18 |
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Some comments from AT&T and their filings: We've done an analysis of impact of the FCC plan on the SLC, which I attach again. We have the scenario of a $8.0 SLC cap and it shows an average potential SLC recovery to be $0.67 for all lines (not just att's), where 10% have no increase at all and 58% have a potential increase of $0.24 and 31% have a potential increase of $1.42. So, 68% of all lines will have a potential SLC increase of $0.24 or zero.The reason this is the case is because the FCC will prohibit any recovery over the amount of any lost terminating access revenue.
So, for carriers that operate in states that have already lowered intrastate terminating access to the rate the FCC determines in the ICC order, then will not be able to raise the SLC.
Also, what we do know is that low income customers will be exempt from the SLC.
As to AT&T in particular, we've generally identified the puts and takes for our company, in the attached October 23rd letter, at the bottom of page 1:
AT&T itself stands to lose significant revenue as a result of this order. It will lose most of its CETC support and substantial access revenues. While AT&T expects to recover some of those access revenue losses through increased SLCs, competition may well constrain AT&T
In addition to the other consumer benefits, such as promoting broadband, the draft order reforms today's access charge regime, which imposes indirect costs on consumers through the hidden tax of the terminating carrier. Turning those costs into explicit and regulatorily constrained end user charges places them squarely under the microscope of competition and transparency.
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I've reviewed the same data and come to a very different conclusion. I don't see any reason telcos would not charge the full SLC to most basic subscribers, because competition in the U.S. for basic service is very limited. I don't see any benefit to the consumers proportionate to the added tax. While AT&T may provide plausible reasons they might not charge certain fees, they still insist they be included. Similarly, while AT&T claims LOD rates will go down, they refuse to make that part of the rules. They do charge a little less SLC than Verizon.
To believe AT&T's suggestions, your have to assume either that they won't try to make maximum profit or that competition is strong enough to hold them back. Neither is likely |
