Central Office Bill and Keep as a Unified Inter-Carrier Compensation Regime

Abstract

This Article proposes a single approach to interconnection pricing called Central Office Bill and Keep ("COBAK'), which applies to both local and long-distance traffic. COBAK is a default interconnection regime, which means it would apply only when two networks cannot agree on terms for interconnection. The COBAK proposal, as applied to local calls between two networks, consists of two rules. First, a called party's carrier cannot charge an interconnecting carrier to terminate a call. (Thus, each carrier recovers the cost of the loop and switch that serves the loop primarily from its own end-user customers). Second, the calling party's network is responsible for the cost of transporting a call between the calling party's central office and the called party's central office. These rules are easily extended to long-distance calls or other calls involving three or more networks. COBAK will solve or ameliorate many of the significant problems that plague the existing interconnection regimes.