FCC calls time on call termination fees

The FCC has approved a proposal to phase out intercarrier compensation (call termination and other access charges) for voice calls, moving all such charges to a bill‑and‑keep (zero‑rate) regime over roughly a two‑year transition.

What “calls time on call termination fees” means

• The FCC’s new Notice of Proposed Rulemaking (NPRM) would transition the remaining originating and terminating switched access charges, including tandem switching and transport, to bill‑and‑keep, under which each carrier recovers its costs solely from its own end users rather than from other carriers.

• This completes the intercarrier compensation reform framework begun in the 2011 USF/ICC Transformation Order and extended to 8YY in 2020.

Scope of the phase‑out

• The proposal targets all remaining switched access charges that are still above zero, including intrastate originating access for rate‑of‑return LECs and CLECs that benchmark to them, as well as previously capped interstate access and transit rates.

• The transition would apply to both price‑cap and rate‑of‑return LECs, and by extension CLECs via the benchmark rule.​

Timing and mechanics

• Uncapped access charges would be immediately capped 30 days after the final rules are published in the Federal Register.​

• Remaining access rates would then be stepped down over roughly 24 months: first a 33% reduction, then an additional 33% (66% total), then a final 34% reduction to bring the rates to zero at the third annual tariff filing in the cycle.​

• Once the transition is complete, the FCC proposes to end tariffing for access charges entirely and grant forbearance from section 203 tariffing requirements for these services.

Related pricing and universal service changes

• The NPRM also proposes eliminating ex ante pricing and tariffing for end‑user “Telephone Access Charges” such as the Subscriber Line Charge, Access Recovery Charge, PICC, line port charges, and the special access surcharge, allowing carriers to restructure how they recover costs from subscribers.

• The FCC seeks comment on phasing out Connect America Fund intercarrier compensation (CAF ICC) support over three years once bill‑and‑keep is fully implemented, stepping support from 66% to 33% to 0% of baseline.​

Policy rationale and implications

• The FCC frames the move as part of a broader “all‑IP future” push, removing legacy TDM‑era compensation mechanisms that may discourage migration to IP and all‑fiber networks.

• For carriers, especially small rural LECs, the proposal raises questions about replacement revenue (through end‑user pricing, CAF changes, or other mechanisms) and may require rethinking tariffs, product bundles, and disclosures over the next several years.