Integration of VoIP Calling. The intercarrier compensation status of calls to and from VoIP services has been controversial. The Order sets new rules that apply prospectively to govern intercarrier compensation for such calls. Non-toll VoIP calls will be subject to reciprocal compensation under Section 251(b)(5). VoIP calls that would normally be considered toll calls (that is, typically, where the calling and called party are in different calling areas) will be subject to interstate access charges as of the effective date of the rules. This new rate level applies even to VoIP toll calls that are intrastate in nature (such as calls from Los Angeles to San Francisco, or Houston to Dallas). So, from that date until July 1, 2013 (when inter- and intrastate access charges become identical), intrastate VoIP toll traffic will be subject to different access rates than intrastate non-VoIP toll traffic (that is, traditional toll calls). The permitted compensation rates for VoIP may be set in carrier-to-carrier agreements or, for VoIP toll traffic, in FCC and state access tariffs. In addition, the permitted compensation for VoIP traffic must be paid to the LEC that terminates the calls, even if some termination functions are provided by the LEC’s VoIP-provider customer, including affiliates of the LEC.

The VoIP Compromise. The Order’s treatment of VoIP calling is a compromise reflecting the result of an intense lobbying battle between large ILECs and their allies on one side, and cable-affiliated CLECs and VoIP providers on the other. The cable-CLECs pressed to have VoIP traffic treated exactly like traditional voice traffic, including the application of full intrastate access charges on intrastate toll calls to or from VoIP services. The large ILECs (along with their interexchange carrier affiliates), wanted compensation for the exchange of all VoIP traffic, including toll calls to and from VoIP services, to be immediately set at $0.0007 per minute; some VoIP entities wanted all VoIP-related traffic to be immediately moved to a bill-and-keep system. The ILECs and their allies also wanted the FCC to declare that all VoIP traffic was inherently jurisdictionally interstate in nature, both to eliminate any potential for future disputes in the states, and to provide ammunition against state jurisdiction in a number of ongoing controversies about compensation for VoIP traffic.