FCC Seeks to Lower Phone Bills for Americans Through Additional Deregulation of International Telephony Market

The Federal Communications Commission adopted a Notice of Proposed Rulemaking (NPRM) to eliminate outdated regulations governing agreements between US and foreign carriers for delivering international phone traffic, and to seek comment on other ways to protect against anticompetitive conduct by monopolistic foreign carriers.

Established over eighty years ago, the International Settlements Policy (ISP) ensured fair treatment for US carriers negotiating agreements with foreign carriers with market power. However, over the past fifteen years, in part because of the success of the ISP and the related Benchmarks Policy, global competition has significantly increased, new alternative traffic routing possibilities have emerged, and the average US calling price for international phone calls has fallen from $0.74 per minute to $0.08 per minute, as annual calling minutes have increased over 250%.

These changes have made the ISP less relevant and necessary to ensure fair competition. In some cases, the ISP may now be hindering attempts by US carriers to negotiate agreements that reduce international telephone rates for American customers. This proposal would give US carriers greater flexibility to negotiate agreements with foreign counterparts that reflect modern routing arrangements, resulting in lower rates for international calls. The FCC is also seeking comment on measures to promote and protect competition on US-international routes if the need arises.