Level 3 withdraws request to FCC over Internet phone fees

Tuesday, March 22nd 2005, 1:18 pm

By: News On 6

WASHINGTON (AP) _ A company that provides Internet phone service has withdrawn a request to federal regulators asking that it be exempt from paying higher fees to local phone companies for transmitting certain calls over the traditional phone network.

Level 3 Communications, Inc. told the Federal Communications Commission that the cost of making Internet calls could rise if the FCC ruled that the company had to pay higher access charges to local phone companies.

Level 3 doesn't deal directly with consumers, but provides Voice over Internet Protocol, or VoIP, services to Internet providers, cable companies and other firms that then sell to consumers. Higher costs would eventually be absorbed by subscribers, industry officials say.

Tuesday was the deadline for an FCC decision, but Broomfield, Colo.-based Level 3 withdrew the request Monday night. Industry officials said the FCC had been preparing to rule against Level 3.

In a statement, Level 3 chief executive officer James Crowe said the request was withdrawn because it was ``inappropriate'' to resolve the issue while the agency is getting new leadership.

President Bush last Wednesday elevated FCC Commissioner Kevin Martin to chairman, replacing Michael Powell, who stepped down after four years in the top post.

Many companies like Level 3 do pay to use the phone network, but local phone companies say it's not enough. They contend Internet phone providers should pay the more costly access charges that long distance companies pay.

``Level 3's retreat ensures that consumers benefit from real competition in today's vibrant communications market,'' said Walter McCormick, president of the U.S. Telecom Association, a trade group for local phone companies.

Crowe maintained the company's opposition to higher access charges, and urged the FCC to take up its case in the agency's broader study of how to reform the entire system by which companies compensate each other to access the traditional phone network.

VoIP technology shifts calls away from wires and switches, instead using computers and broadband connections to convert sounds into data and transmit them via the Internet. In many cases, subscribers use conventional phones connected to a special box and a high-speed connection to make Internet calls.

Level 3's request dealt specifically with calls that started from an Internet phone but ended on a traditional line, or vice versa.