The FCC has been considering comprehensive intercarrier compensation reform for more than a decade, and on more than one occasion has appeared to be on the brink of issuing a major decision.  Now, once again, there are signs that the FCC may finally take action in this complex area which presents some of the most intractable issues in telecommunications.  This post will provide some background on this issue and focus on one of the more controversial aspects of the debate – possible preemption by the FCC of what have traditionally been intrastate ratemaking decisions.

Rejecting a claim by Pennsylvania's  Small Business Advocate  that the PUC must treat every competitive effect of a merger "good, bad, or indifferent" as a negative to be weighed against demonstrated "affirmative public benefits," Commonwealth Court affirmed the PUC's approval of a merger that indirectly transferred control of Embarq Pennsylvania (an ILEC) and Embarq Communications (an interexchange toll reseller) to CenturyTel. Lloyd v. Pa. Pub. Utility Comm'n, __A. 3d __2011) (496 CD 2010, filed March 1, 2011) (Brobson, J.).