Verizon, incumbents need to play fair in the IP VoIP interconnection game

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Sean Buckley, FierceTelecomVerizon (NYSE: VZ) recently announced that it signed IP VoIP interconnection terms with four new service providers, a move that rings in the next technology and regulatory showdown in the telecom industry's TDM to IP technology shift.

Like the agreement it signed with Vonage (NYSE: VG), these service providers will be able to get access to Verizon's IP Interconnection Agreement, which it says will provide a single, nationwide agreement with service providers that want to exchange VoIP traffic.

While these agreements show Verizon's willingness to work with other service providers, competitors are concerned about the non-disclosure agreements (NDAs) they are required to sign. In particular, they would not be able to seek regulatory help if the telco lays out what a competitor thinks are "unreasonable" terms.

Angie Kronenberg, chief advocate and general counsel for competitive industry association COMPTEL, told FierceTelecom in a recent interview that these NDAs could put competitors seeking interconnection at a disadvantage.

"They don't want their IP interconnection arrangements to be open and don't want them to be subject to the act," she said. "They want carriers to sign very tight NDA, so tight that a carrier would not be able to tell the FCC what's going on and I think that should raise eyebrows."

Verizon is not the only telco that's found itself in a competitive battle over VoIP interconnection. A similar issue took place between AT&T (NYSE: T) and Sprint (NYSE: S) in Michigan.

Michigan's Public Utility Commission (PUC) in December overturned a decision by an arbitration panel decision that said carriers should wait for the FCC to negotiate interconnection terms. 

In its decision, the PUC ruled that AT&T is required to provide Sprint IP interconnection for the transmission of telephone calls that "AT&T provides to itself, affiliates or third parties pursuant to Section 251(c)(2) of the Act."

Sprint has garnered VoIP interconnection agreements with about 12 non-incumbent telcos, while fellow CLEC tw telecom (Nasdaq: TWTC) has signed five, including one with a cable operator.

Perhaps not surprisingly, Verizon lamented that the Michigan PUC's decisions could "disrupt the progress the industry has made and continues to make through commercial negotiations and agreements." 

Verizon is facing a similar issue in Massachusetts, where the Massachusetts Department of Telecommunications and Cable is examining whether it has the authority under Section 252 to regulate the voluntary commercial IP VoIP interconnection agreement between Verizon and Comcast (Nasdaq: CMCSA).

Kronenberg countered that the Michigan decision could be a potential victory for other competitive providers that want to provide VoIP services in the state.

"As more of this stuff moves to IP, we really shouldn't wait for the commission to make a decision," she said. "The fact that the interconnection agreements are ones that are publicly available, these are great foundational provisions that allow for more efficiencies."

Outside of the regulatory arena, others are addressing the need for a broader technical framework for VoIP interconnection.

ATIS and the SIP Forum recently developed a Joint Task Force focused on building a specification that will enable North American service providers to establish IP communications network-to-network interface (NNI) arrangements. They are developing a protocol specification that all North American service providers can support and implement.

Regardless of the required technical specifications, large incumbent telcos need to play fair with competitors. How the debate between Verizon and its competitors play out is still in question, but you can expect the VoIP interconnection issue to continue to heat up this year as FCC Chairman Tom Wheeler holds meetings about the TDM to IP transition.--Sean

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