Bill and keep

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Bill and keep (B&K),also known as net payment zero (NPZ), is a pricing arrangement for the interconnection (direct or indirect) of two telecommunications networks under which the reciprocal call termination charge is zero. That is, each network agrees to terminate calls from the other network at no charge.

In the mobile telecommunications sector, absent a bill and keep arrangement, the wholesale markets, for example, in the Europe, have traditionally applied the calling party pays (CPP) principle in which an originating network pays the terminating network a charge called the mobile termination rate (MTR) for calls to the terminating network. The MTRs paid under the CPP model, therefore, act as a cost floor to the retail pricing, preventing lowering of prices and innovation of retail propostitions. In many countries including the UK, the CPP model has thus led to a high level of regulatory activity aimed at capping the MTRs at a competitive level, which inevitably acts to reinforce the cost floor rather than being pro-competitive.

Bill and keep represents a modern approach to interconnection charging in which the networks recover their costs only from their own customers rather than from their competitors. Such an arrangement acts to remove the wholesale cost barrier to the retail pricing for off-net calls and has been proven to result in significantly higher levels of calling activity.

There is now a widespread recognition that Bill and Keep is a natural evolution path for the telecommunications industry to follow.^{[citation needed]}