Monday, March 21, 2005

Level 3 Withdraws its VoIP Forbearance Petition

On the day before an expected FCC ruling, Level 3 Communications withdrew its VoIP forbearance petition. In the petition, which was filed in December 2003, Level 3 asked the FCC to reaffirm that legacy interconnection fees (access charges) do not apply to a certain class of VoIP traffic. By statute, the agency was required to issue a decision in the matter by March 22, 2005.

James Q. Crowe, chief executive officer of Level 3 Communications, said "Level 3 has withdrawn the petition in deference to the Commission. Given the appointment of new leadership only three business days before the statutory deadline for ruling on the petition, we determined it was inappropriate to ask the agency to resolve this important issue in the timeframe required by law. However, there remains a pressing need in the industry for clarity in this area, and Level 3 may elect to refile the petition or take other appropriate regulatory actions in the future."

In the absence of an FCC ruling, Level 3 expects the regulatory status quo to remain in effect. Level 3 and other VoIP service providers continue to maintain that voice calls between the legacy telephone network and the Internet should be exchanged using reciprocal compensation rates, which are lower than access charges.

  • Since filing its petition in December 2003, Level 3 has maintained that under current rules, VoIP should be generally classified as an "information service." As such, it is exempted from the access charges imposed on traditional long distance telecommunications services. Some industry participants have argued that access charges should be imposed on VoIP traffic when traffic is exchanged between carriers. Level 3 maintains that such a move would be ill conceived and not in the public interest.


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