**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

*Re: Developing a Unified Intercarrier Compensation Regime, CC Docket
No. 01-92, Further Notice of Proposed Rulemaking (Feb. 10, 2005).*

With this item, the Commission adopts a detail-rich inquiry into vexing
questions about how telecommunications firms compensate one another. We
should not conclude, however, that this is a proceeding solely of
interest to rival companies on the rapidly-evolving telecommunications
landscape. The decisions that this Commission will make in this
proceeding will have profound effects on the prices that consumers pay
for telecommunications services and on the choice of services available
to them.

This Notice is not the first step in the Commission's revision of its
intercarrier compensation regime. Since the passage of the
Telecommunications Act of 1996, the Commission has acted on several
occasions to address the interplay of its long-standing access charge
rules and its reciprocal compensation rules, adopted to implement the
1996 Act. In that time, the Commission has also made substantial changes
to the pre-1996 Act rules, reducing rates for access services and
seeking to preserve universal service by providing explicit support for
hard-to-serve areas of our country.

These actions notwithstanding, there is a widespread call for further
reform of the intercarrier compensation regime, particularly with
developing intermodal competition and the advent of
Internet-Protocol-based services like VoIP. The voices calling for
further reform represent a wide diversity of interests: state
policymakers, consumer groups, incumbent and competitive local wireline
carriers, wireless carriers, long distance carriers, VoIP providers, and
others. It is remarkable and encouraging that numerous parties from all
segments of the industry have come forward to offer goals, principles
and specific proposals for further reform. These parties have expended
significant resources to develop proposals and many have tried to find
common ground, even if it means moving off of their initial positions.

With this Notice, we hope to capitalize on these parties' hard work and
to encourage others to roll up their sleeves and recommit themselves to
this effort. Without that broad participation and commitment to find
compromise, we may end up with a less than optimal result, and parties
may find that the final solutions do not fully reflect their interests.

The proposals included in this Notice are diverse in scope and
solutions: some advocate moderate reform, others more far-reaching
changes. I'm pleased that this Notice seeks comment on these proposals
comprehensively and quickly, so that we can harness the momentum
provided by these collective efforts. While this Notice may not
precisely reflect my balance of the competing policy goals for
intercarrier compensation reform, I am pleased that the item sets out
our commitment to harmonize and unify our rules. Given the rapid changes
in the communications marketplace, we must work both promptly and
carefully to make sure that our regulatory framework continues to
promote the innovation and customer choice that drive so much economic
growth and benefit for American consumers.

I also give heavy weight to our statutory obligation to preserve and
advance universal service even as we move forward with reform proposals.
We must quantify with some specificity and weigh carefully the impact of
any proposals on all consumers, including those consumers who live in
high costs areas or who are low volume users. In addition, this
Commission has traditionally been sensitive to drastic shifts in the way
that carriers, particularly small companies serving the hardest-to-reach
areas, recover their costs. We will need more than idle assurances about
the importance of universal service to be successful here; rather, we
must develop coherent and responsive approaches to this Congressional
directive.

As we move forward, I want to commend in particular the National
Association of Regulatory Commissioners (NARUC) for its efforts to bring
parties together. A collaborative process is essential, particularly
given the complex jurisdictional issues raised in this proceeding, and I
appreciate NARUC's leadership on this front.

On a related matter, I'm pleased that the Commission appears poised to
act on the termination tariff issues raised in the T-Mobile petition.
Prompt guidance from the Commission here would help address a highly
controversial issue that is being heavily litigated throughout the
country.

Finally, I want to thank the staff of the Wireline Competition Bureau
and the Wireless Telecommunications Bureau. While I cannot endorse today
the separate staff analysis of intercarrier compensation proposals,
which is not the product of Commission vote, I thank the staff for their
dedication from the beginning to the end of this process and look
forward to working with them as we tackle the challenges ahead.