In the 2/20/26 edition of the ICORE Blog, we reported that the FCC had adopted an NPRM entitled “Reforming Legacy Rules for an All-IP Future; Accelerating Network Modernization”. The NPRM seeks comment as to whether the existing Intercarrier Compensation (ICC) rules reduce the incentive for LECs to transition from TDM networks to IP-based technology and further would a transition to a bill and keep framework for the remaining intercarrier access charges accompanied by deregulation facilitate an industry-wide transition to all-IP networks. In this regard, the NPRM proposes to finalize the transition of intercarrier access charges, which began with the 2011 USF/ICC Transformation Order, to bill and keep. The proposal would cap the remaining intrastate access charges for rate of return and competitive LECs and transition these charges, along with the remaining interstate switched access charges to bill and keep over a 24 month period. Regarding cost recovery, the NPRM proposes that carriers recover their costs directly from end-users and seeks comment on eliminating ex-ante pricing regulation of end-user charges as well as the detariffing of end-user charges. Further, the NPRM seeks comment on how to define the network edge for allocating transport costs between carriers, both during the transition and after full IP migration is achieved. (see ICORE Blog dated 2/6/26 regarding network interconnection).
Comments in this proceeding have now been filed. NTCA, in its comments, states that existing intercarrier compensation and CAF ICC mechanisms have not hindered IP transition in rural areas but rather have facilitated and will continue to facilitate substantial investment in IP-enabled infrastructure on the part of Rural LECs (RLECs). The proposed transition to bill and keep to replace switched access charges is problematic in that RLECs cannot recover network costs solely from their customers and maintain affordable rates. Further, NTCA points out that CAF ICC for RLECs remains a significant and critical source of cost recovery. If CAF ICC support becomes unavailable, RLECs would need to shift more than half of their overall switched access cost recovery to consumers resulting in significant increases to per line consumer rates. NTCA urges the Commission to acknowledge that funding from the existing intercarrier compensation and CAF ICC mechanisms are the key to completing the transition from legacy networks to all IP networks and the Commission is urged to retain the existing CAF ICC mechanism and rechristen it as a new IP-transition fund. Further, the Commission should not eliminate the remainder of carrier access charges under a bill and keep framework and phase-out CAF ICC without establishing explicit universal service support for carriers serving rural high-cost areas. In addition, in regard to the network edge, NTCA suggests the Commission should adopt a default framework defining the network for RLECs at the existing points of interconnection. Finally, in regard to Telephone Access Charges, NTCA urges the Commission to abandon its proposal to eliminate ex ante pricing regulation and tariffing of Telephone Access Charges.
Comments were also filed by USTelecom (UST). In regard to the specifics of reforming TDM switched access charges and end-user tariffed charges, UST suggests that the Commission’s reforms to implement its goal of moving to bill and keep should enable a smooth transition, limiting disruption for all providers, including smaller, rural providers, while supporting the transition to IP. Further, UST comments that the Commission’s reforms should consider limitations on the ability for providers to raise prices for voice services to recover revenues lost through the transition. In regard to Telephone Access Charges, UST recommends that the Commission should adopt permissive, not mandatory, detariffing. Finally, UST recommends that the Commission’s reforms in this proceeding should not disrupt carriers’ ability to enter into negotiated contracts for the traffic they exchange with each other.
WTA, Advocates for Rural Broadband, also filed comments in this proceeding. WTA opines that the NPRM wrongly asserts that intercarrier access charges are delaying the transition to IP networks and further states that the vast majority of its members have initiated or completed the transition to IP networks, notwithstanding the existence of intercarrier access charges. In addition, WTA maintains that the NPRM understates the complexities and costs of transitioning TDM networks to IP networks, as well as the ongoing costs an RLEC faces even after completing the transition to an IP network. WTA states that if the Commission eliminates the implicit subsidies in the current intercarrier compensation system, along with phasing out other subsidy programs, the Commission must provide a longer transition period and implement an explicit subsidy program to replace those lost revenues.
Reply comments in this proceeding are due by 6/22/26. In addition , as discussed in the May 9, 2026 edition of the ICORE Blog, the FCC’s Wireline Competition Bureau will host an industry workshop on July 15 and July 16, 2026 to discuss proposed reforms to IP interconnection, intercarrier compensation, and related legacy USF issues. The workshop invites participation by industry experts and stakeholders to examine the most significant issues the industry may face during the transition to all-IP networks. We will continue to monitor these important issues and will timely updates as more information becomes available.
