Rural telecom groups have been working with a high degree of collaboration lately—and comments filed with the FCC Friday about inter-carrier compensation are no exception.

No less than seven rural telecom associations—including the National Exchange Carrier Association (NECA), the National Telecommunications Cooperative Association (NTCA), the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), the Western Telecommunications Alliance (WTA), the Eastern Rural Telecom Association (ERTA), the Rural Alliance and the Rural Broadband Alliance – signed the comments, which urge the FCC to take action to help rural carriers collect the full value of inter-carrier compensation they say is due to them.

The associations urge the commission to:

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  • Confirm that under existing law, traffic originating from or terminating to interconnected VOIP services is subject to the same inter-carrier compensation rates as any other traffic originating from or terminating to the public switched telephone network. VoIP providers have argued that because VoIP is not a telecommunications service, it is not subject to such charges.
  • Adopt rule revisions applying call signaling requirements to all types of traffic originating or terminating on the PSTN, including mechanisms to avoid fraud and ensure compliance with such requirements. A range of carriers—from VoIP providers to wireless operators—have avoided paying access charges by failing to provide sufficient billing information, a phenomenon sometimes called “phantom traffic.”
  • Adopt reasonable rules to address rate development and allowed levels of earnings in access stimulation situations. Access stimulation, also known as “traffic pumping,” is when calls to a free conference call service  or chat line are terminated through  a rural competitive local exchange carrier that charges unusually high terminating access charges and shares in the revenue with the conference call or chat line operator. This practice affects carriers of all types, not just rural carriers.

“Putting the brakes on VoIP providers’ free ride on the PSTN, along with adopting rules to address phantom traffic and access stimulation, is a necessary step in restoring the confidence of small rural carriers to continue investing in their networks for the future,” said NECA President Bill Hegman in an announcement of Friday’s filing.

“Reforms that correct anomalies in today’s complex and untenable intercarrier compensation system-and that ensure all users of the network share equal responsibility for it-will create a stable regime, help to keep end user costs affordable and allow the entire industry to focus on important tasks like delivering high-quality broadband services” added NTCA CEO Shirley Bloomfield.

“By adopting rules to address the arbitraging of the current inter-carrier compensation system, the Commission will make it possible for rural carriers to collect revenues due to them and reinvest those funds in robust broadband networks that serve rural customers and stimulate rural economic development,” said OPASTCO President John Rose in the announcement.

The FCC has said it plans to address all of the issues raised by the rural carrier associations in a universal service and access charge reform order it has targeted to issue “within a few months.” Stay tuned – these proceedings should get quite interesting, as they address fundamental issues for rural telecom and its future.

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3 thoughts on “Rural Telecom Groups Take on Inter-Carrier Compensation

  1. When your getting $0.05 to $0.19 cents pre minute for termination into your network and you pump and dump and share revenue that is wrong. Out right wrong especially if the service is for free there is an aobvious issue there. If you were selling the service at a profit and benefit from the access that would legititmize it. These rates they get are to compensate them for the little traffic that comes to them and help pay for the interconnection cost, that is what Access is for. Obviously if they choose a legitimate service where they billed the Conference company retail rates, didn't share revenues there wouldn't be a problem.

    Access for Local, Interstate, and Intrastate should be a flat $0.005 cents per minute (on all types of traffic), and these Small telcos should have caps on the number of minutes that they can Charge these higher rates, then the lower rates should kick in. Allow that number of minutes to grow by a small % annually. Problem fixed. Leave it to the politicians to drag this out and cost a ton of money trying to come up with some convoluted plan that probably wont work. Hopefully they can keep is simple and stupid.

  2. That’s B.S! The rural telco’s delivering these free conference services are making .003 to .007 from the telco’s. They haven’t made .05 to .19 in years. Furthermore, the only reason the LDs are complaining is because they are now offering unlimited calling plans. When they were charging the caller per minute, they didn’t care. Don’t blame the rural telco’s for the LDs poor business decisions.

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