Matrix Telecom, a relatively unknown telecom company that offers service on a retail and wholesale basis, has agreed to pay $875,000 to the U.S. Treasury to settle an investigation into the company’s rural call completion practices.

In a press release the FCC said it investigated the company because of “serious allegations about the company’s ability to reliably complete long-distance calls dialed to rural areas.” The commission said it received complaints from consumers and rural carriers about Matrix Telecom and that performance data from other carriers who used Matrix as an intermediate provider also suggested a problem.

After Matrix received notice of the investigation its rural call completion performance improved, the FCC said. In combination with those improvements, the FCC said the settlement reached with Matrix resolves the commission’s investigation.

In addition to paying the money to the treasury, Matrix Telecom’s rural call completion settlement calls for the company to:

  • Develop and implement a comprehensive compliance plan
  • Designate a senior corporate manager to serve as a rural call completion compliance officer
  • Cooperate with the FCC and rural local exchange carriers to establish a testing program to evaluate rural call completion performance whenever complaints or data indicate problems
  • Notify intermediate providers that may be causing call completion problems and analyze and resolve those problems promptly
  • Cease using intermediate providers that fail to improve their performance
  • Report to the FCC any noncompliance with the settlement within 15 days
  • File an initial compliance report in 90 days and annual reports for three years

A History of Rural Call Completion Problems
Rural carriers began complaining several years ago that some other carriers were not completing calls to the rural carriers’ customers. It is widely believed that some carriers deliberately fail to complete calls because they want to avoid the per-minute charges they would owe the rural carriers for completing calls to the rural customers. Those charges tend to be higher in rural areas to help cover the cost of delivering service in those areas, which tend to be expensive to serve because of low population densities.

After receiving the complaints and supporting data from the rural carriers, the FCC ruled that carriers were required to complete calls to rural areas and established enforcement procedures that included potential fines as high as $1.5 million.

Windstream actually paid a higher $2.5 million amount to the U.S. Treasury several months ago to settle an investigation similar to the one that the FCC has reached with Matrix Telecom. And Level 3 Communications previously reached a rural call completion settlement with the FCC that required the company to pay $975,000 to the U.S. Treasury.

Image courtesy of flickr user drewleavy.