Telstra joins chorus of protest against US toll fee plans

Telstra has joined the rally of telecommunications carriers protesting a US plan to set new benchmark prices for international calls. And it sought to put an Internet spin on the matter by arguing that the US is receiving from foreign carriers an annual subsidy of US$200 million - of which Telstra's share is $9.6 million - for the provision of international capacity to carry Internet traffic.

Telstra has joined the rally of telecommunications carriers protesting a US plan to set new benchmark prices for international calls.

Telstra yesterday put an Internet spin on the matter by arguing that the US is receiving from foreign carriers an annual subsidy of US$200 million - of which Telstra's share is $9.6 million - for the provision of international capacity to carry Internet traffic.

Telecom providers from Hong Kong to the UK to Japan have been reacting in recent weeks to a Notice of Proposed Rulemaking (NPRM) by the U.S. Federal Communications Commission regarding a reduction in what are known as settlement fees.

The matrix of settlement fees describes the way in which carriers split the costs of international telephone traffic, depending on where a call originates and where it terminates.

The FCC is seeking an adjustment in the rates because the volume of traffic has been heavily outbound from the US, meaning that US carriers are paying more than their foreign counterparts.

Carriers outside the US tend to agree that the rates need to be lower but resent the FCC proposal, released for comment in December, which they say unfairly favors US carriers.

Telstra, for one, says that the scope of the NPRM is too narrow and ignores factors on international communications including new services that distort the flow of traffic around the world and huge demands for capacity made by the Internet.

While there has been a net outflow of traffic from the US, foreign carriers are not getting a fair share of the payment for such calls because of services such as callback, Telstra says.

A callback service allows a person to make a call from someplace like Hong Kong or Australia without paying local rates for overseas calls, depriving the local carriers of income.

In addition, the balance of international traffic is shifting as the Internet becomes less US-centric and more globally dispersed, but non-U.S. carriers are still being forced to pay for both ends of the international circuit on which the traffic is carried, Telstra said.

The FCC also needs to look at standard tariffs in the U.S., which have actually risen in the past three years, even as U.S. carriers call for foreign carriers to reduce their rates, Telstra says.

Telstra, based in Sydney, has a home page at http://www.telstra.com/.

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