TELECOMMUNICATIONS GLOSSARY Act: The federal Telecommunications Act of 1996, which opened up competition in the local exchange market and updated the universal service requirements. Bill and keep: A means to recover the costs of exchanging traffic over a telecom network from the carrier’s own subscribers, instead of billing the other carrier for origination and termination charges. Bill & keep generally assumes a rough balance of traffic between carriers. CAF – Connect America Fund: The new USF support mechanism created by the FCC to promote broadband-capable services; will replace the previous voice-focused High Cost Fund. CALLS: An FCC order adopted in 2000 that reduced interstate access charges for those carriers that participated, and created a separate cost recovery mechanism. CLEC – Competitive Local Exchange Company: A company that provides local exchange service to subscribers, usually in competition with the incumbent local exchange company, or ILEC. CPNP – Calling party network pays: Since the AT&T divestiture, this has been the traditional means by which carriers compensate each other for the exchange of traffic based on the theory of cost causation (the carrier who “causes” the costs should pay the other carrier). DSL – Digital Subscriber Line: A service for Internet access, generally through dial-up access via a modem. ETC – Eligible Telecommunications Carriers: Carriers designated by state commissions or the FCC as eligible to receive federal universal service funds. Exchange area: A local service area for a telecommunications carrier that sets the definition of “local telephone service,” usually based on a wire center location and service coverage. Generally, within this area, a subscriber may make unlimited calls for a certain flat rate per month. FCC – Federal Communications Commission: The federal agency responsible for regulating communications, including telecommunications, TV and radio broadcasting, spectrum, and other communications matters. High-Cost Fund: the traditional mechanism created by the Act to provide subsidies for rural LECs in high-cost areas, consisting of mechanisms such as High-cost loop support, local switching support, corporate operations and expenses, safety additive, and others. IAC: intrastate access charge: The charge that carriers pay each other for the exchange of traffic from point of origination to point of termination of a call. There are various terms for this (IAS and others. Under federal law, traffic is separated into interstate and intrastate components, and state commissions have had exclusive authority to set rates for intrastate access. ICA: Interconnection agreement: Contractual agreements between carriers, in particular competitive and incumbent local exchange companies, that set forth the rules for exchange of traffic, including rates, terms and conditions, and dispute resolution. Under Sections 251 and 252 of the Act, state commissions have jurisdiction to arbitrate agreements where the parties cannot agree on terms, and to resolve disputes about the agreements. ICC – Intercarrier Compensation: The means by which telecommunications carriers pay each other for carrying calls or terminating calls originated by other carriers. ILEC – Incumbent Local Exchange Company: A company providing local exchange service on the effective date of the Act. IP – Internet Protocol: Technology that uses the Internet instead of traditional “switched access” technology via the public switched network. IP-to-IP interconnection: These are largely “commercial agreements” between carriers that govern the rates and terms for exchange of traffic over a broadband network that uses IP conversion technologies. Not subject currently to the Act or state commission oversight. ITAC: Interim Terminating Access Charge: This is a Washington specific intrastate access charge established by the UTC to provide for cost recovery for rural LECs participating in this mechanism. LEC – Local Exchange Carrier: A telecommunications company that provides service to local exchange areas; distinguished from a company that provides long-distance service. Price-cap Regulation: The opposite of ROR regulation: Another term would be incentive regulation, in which the regulatory body allows the regulated carriers to charge a maximum price (with an allowance of a productivity factor, or X-factor), and then manage costs within that revenue structure. No filing of tariffs. PSTN: Public switched telephone network: This network configuration is the traditional telecom network by which carriers exchange traffic, built on both copper and fiber networks for both “local” and “toll” (long-distance) traffic comprised of wire centers, switches, and local loops to end-users. Reciprocal compensation: A method of intercarrier compensation defined in Section 251(b)(5) of the Act. It is the opposite of interexchange, or toll traffic, which means it is traffic exchanged between carriers that is primarily “local” in nature. Therefore, the rates charged are lower than those for toll traffic. ROR: Rate-of-return: Another term for this is cost-based regulation, or prices based on embedded costs incorporating a return on equity in the revenue requirement. Usually requires the filing of tariffs. Carriers are subject to rate-of-return regulation at either the federal or state level. Toll: Telecommunications traffic that travels between exchanges (local calling areas); also defined as “long-distance” traffic. Toll traffic can be distinguished from “local” traffic by the carrier through its switches and software. USAC – U.S. Administrative Company: The quasi-governmental body, overseen by a diverse Board of Directors that administers various universal support mechanisms on behalf of the FCC. USF – Universal Service Fund: A federal fund managed by the USAC and supported by fees paid by carriers to provide funding for various universal support mechanisms, i.e., High cost, Lifeline, Link-Up programs. VOIP – Voice over the Internet Protocol: A method of exchanging voice traffic over an applications layer in a broadband network using IP-packets and IP technologies to exchange the traffic. Can either be a “managed IP network” or the general public Internet network. .