Level 3 has agreed to make a $975,000 “voluntary contribution” to the U.S. Treasury as part of the settlement of a Federal Communications Commission investigation into the carrier’s rural call completion practices.

In a consent decree, Level 3 also agreed to complete long-distance calls to incumbent local exchange carriers in rural areas at a rate within 5% of that in non-rural areas over a two-year period, to report compliance with that benchmark quarterly beginning in January 2014 and to make an additional one million dollar voluntary contribution to the treasury department if a benchmark is missed.

In addition, Level 3 agreed to:

  • Develop scorecards for intermediate providers used to route calls, assessing the providers’ performance with regard to post-dial delay in connecting calls, network failure and call completion rates
  • Identify problematic routes to intermediate providers monthly
  • Cease using poorly performing intermediate providers
  • Assist the FCC Enforcement Bureau in other investigations by providing data concerning the performance of intermediate providers.

“When calls to American in rural communities aren’t reliably completed, the consequences are both life-threatening and damaging economically,” said FCC Chairman Julius Genachowski in an announcement of the settlement.

Resolving the “complex problem” of rural call completion is a “major priority” for the FCC, added Genachowski, who vowed to “follow the facts and data” and “hold responsible parties accountable.”

Telecompetitor has been closely following rural call completion problems since they first came to public attention two years ago. As we have reported, it appears that certain long-distance carriers — or the least cost routers they use for call completion – deliberately try to avoid completing calls to rural areas so that they can avoid paying termination charges to the local carriers serving the call recipients. Those charges are higher in rural areas to help cover higher rural network costs.

The FCC has a plan in place to phase out those charges but that process will take several years – and rural carriers will be pleased to learn that the FCC is not, as some had suspected, simply waiting for the problem to go away. Last year the commission issued an order affirming that carriers were required to complete calls to rural areas and imposing substantial fines for violators but the problem continued, with rural businesses complaining of lost revenues and rural residents warning of potentially tragic results.

I do wonder about Level 3’s $975,000 payment going to the U.S. Treasury department. Hopefully it will flow through to the National Exchange Carrier Association’s access charge pool. That’s where revenues not paid to rural carriers would have gone had calls been properly completed.


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6 thoughts on “Level 3 to Pay $975,000 in Rural Call Completion Settlement

  1. So now urban broadband consumers can anticipate speeds 96% faster and call completion up to 5% more reliable. What happened to "reasonably comparable" services and rates? What happened to .9999 reliability?

    1. The FCC has inadvertently facilitated the creation of a new urban/rural divide, where rural-terminated calls are allowed to complete at lower rates than urban-terminated calls

      Furthermore, IXCs will know what rate to target their mix for — if urban call completion rates are at 98%, they know they can build their LCRs to terminate to rural areas at 93.1%, and still meet the FCC's call-completion metrics.

      And Level3 has until January 2014 to start providing quarterly reports? The FCC's consent decree made it very clear that Level3 has been work with the FCC for months to develop the reports that helped the FCC identify the disparities. Hopefully the FCC will require reports reaching back at least two quarters into 2013.

  2. So Level 3 (or their business associates) have been caught…or they surely wouldn't have made a "voluntary contribution" of nearly a million dollars.

    Are we really supposed to trust their quarterly compliance reports? Really??!!! Who's fooling who here?

    Joan makes an excellent point and suggestion in her last paragraph. Makes complete sense!

    1. Note that the FCC consent decree doesn't indicate what the call completion percentages were for either urban or rural — we're left assuming that they were greater than 5%. Without those rates there's little accountability and nothing for other IXCs to compare to. What happened to the days of five 9's?

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