Last week Sprint-Nextel filed a complaint with the FCC over a new AT&T interconnection policy. There is a lot more detail in this article in Billing World & OSS Today magazine, but in summary:
The policy states that any new interconnections between Sprint Nextel and AT&T Mobility, formerly Cingular, will now have to be connected through AT&T's ILEC tandem. Under the new terms, Sprint Nextel will now have to pay transit fees to send its wireless traffic to Cingular subscribers.
So the re-integrated AT&T gets to use it's position as the monopoly LEC to shift the playing field for its wireless carrier, Cingular — excuse me, AT&T Mobility. Depressing..., but this does prompt another line of thought.
Bill and Keep
It's interesting that the prior interconnect model between Cingular and Sprint was wholesale bill and keep. In fact, interconnection between wireless carriers in the US was never regulated and somehow most of the market settled on bill and keep. Bill and keep is also the model that emerged for the Internet backbone when the Internet went commercial. At least in these two cases, where interconnect models were not predetermined by regulators, the market rapidly settled on bill and keep. There are also extensive theoretical studies (for example these two by FCC economists) that suggest bill and keep is far preferable to the current US inter-carrier compensation schemes (which apply to traffic that terminates on wireline networks).
In the two unregulated situations I'm aware of, i.e., US mobile-to-mobile traffic and the Internet backbone, bill and keep emerged as the defacto business practice. This new policy by AT&T distorts the competitive playing field between AT&T Mobility and Sprint-Nextel. It doesn't sound fair. It seems likely to increase costs for the US consumer. But let's hope the policy folks do the minimum to reign in AT&T. It would be unfortunate if this incident led to more regulation of wireless to wireless interconnections.
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