Level 3 says FCC should adopt flat-fee methodology to assess terrestrial IBC regulatory fees

Level 3 has asked the FCC to change its methods in assessing terrestrial International Bearer Circuits (IBC) regulatory fees to reflect the fact that they are sold as large data pipes via Ethernet and other media elements.

Initially, IBCs were packaged as voice channels, but the advent of Ethernet enables service providers of all sizes to sell circuits that can support various types of traffic.

In an FCC filing, Level 3 said that the regulatory fees should be assessed on the basis of a provider's total terrestrial IBC capacity, which would be measured in Gbps increments.

"Terrestrial IBCs are generally no longer sold as dedicated voice channels, but instead are data transmission media (e.g., Ethernet, SONET) that can be used to transport a wide variety of data, with voice typically a small fraction of the total.   Terrestrial IBCs are therefore generally sold in Gbps increments or decimal fractions of Gbps, as is the case with submarine cable systems. It is administratively simpler for provider to use Gbps instead of 64 kbps when measuring circuit capacity."

Further, Level 3 has called to simplify the process by having the FCC assess them with a flat, per-provider fee. This would include a smaller amount for regional providers.

"A flat-fee system will ensure that all providers of terrestrial IBCs pay at least some portion of the revenue allocation to terrestrial IBCs, and, if the breakpoint between small and large providers is selected appropriately, will reduce incentives for providers to under-report their terrestrial IBCs," Level 3 said.  "Level 3 expects that the Commission's data will show a clear break point between small and large providers, and that only a few providers will find themselves in a situation where the classification of a few circuits could result in moving from one fee category to another."

Additionally, a flat-fee system will be competitively neural, meaning that a provider of terrestrial IBCs won't see a particular increase in benefits or costs based on the number of terrestrial IBCs a provider has in service. 

Level 3 said besides being easier for the FCC and service providers to administer, a "flat-fee system takes this fact into account, while the provision for tiers ensures that regulatory fees do not serve as a barrier to entry for smaller providers."

For more:
- see this FCC filing

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