FCC Proposed Rule: Reforming Legacy Telecom Regulations for All-IP Network Transition

The Federal Communications Commission (FCC) has issued a Notice of Proposed Rulemaking (NPRM) aimed at accelerating the U.S. telecommunications industry's transition from legacy Time-Division Multiplexing (TDM) networks to modern all-IP infrastructure. The central proposal is to move remaining intercarrier compensation (ICC) charges — fees carriers pay each other for exchanging traffic — to a 'bill-and-keep' framework, meaning carriers would no longer charge each other for terminating calls, and these charges would be detariffed entirely. The FCC also proposes to eliminate ex ante (pre-approval) pricing regulation and mandatory tariffing of end-user charges, currently known as Telephone Access Charges (TACs). This would give carriers greater flexibility to set rates for end users without prior regulatory approval. Following the ICC transition to bill-and-keep, the Commission is seeking comment on phasing out Connect America Fund Intercarrier Compensation (CAF ICC) support, which currently subsidizes carriers in high-cost areas. Additionally, the NPRM proposes removing regulatory obligations — including tariffing requirements and outdated account information exchange rules — for interstate and international long-distance services, on the basis that these markets are already competitive and no longer require legacy oversight. The Commission also seeks input on eliminating TDM-era regulations that would become obsolete in an all-IP environment. The FCC is inviting public comment on all proposals and encourages stakeholders to suggest ways to promote modernization while maintaining competition, efficiency, and service quality. The Commission has emphasized a thoughtful transition approach given the complexity of the reforms and the importance of maintaining broad connectivity.

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