North American Network Operators Group

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Re: HR 4445 Reciprocal Compensation

  • From: Brett Frankenberger
  • Date: Thu Sep 14 11:35:28 2000

> 	I hate to sound stupid, but isn't this the "ILECs put CLECs out 
> of business act?"  Exactly how will this impact any ISP that uses the 
> ILEC's facilities?

Some ISPs have business models that include, directly or indirectly,
making money from the reciprocal compensation fees paid by the ILEC. 
(Example: CLEC gives free phone line service to ISPs and makes it's
profit off the compensation.  ISP becomes dependant on the effective
subisdy represented by the free phone lines and can't live with out
it.)  (Example: ISP becomes CLEC and depends on reciprocal compensation
revenue to survive.)

Real CLECs -- those that try to serve a broad based market, rather than
hack togethor a contrived market that will result in a high ration o
finbound to outbound calls, will do fine in the absence of reciprocal

     -- Brett