Feb 16, 2018 10:06:22 AM
Even with inter-carrier compensation reform, some bad actors continue to abuse the remaining price differences in switched access charges to enrich themselves. These arbitrage opportunities exist because rural ILECs were not required to reduce terminating tandem-switched transport to bill-and-keep maintaining their access revenues and originating switched access charges were never reformed at all by the FCC.
On the terminating side, some LECs continue to contract out with enterprises that generate large numbers of terminating calls and split the excess access revenues. Next week, we will discuss this issue of access stimulation (or traffic pumping) and review a current case where the FCC will determine whether IXCs must utilize the tariffs of LECs engaged in such a practice.
Topics: CLECs, FCC, ILECs, service providers, bill-and-keep, wireless, inter-carrier compensation, terminating traffic, direct connections, wireless carriers, small providers, Inteliquent, wholesale traffic, AT&T, 8yy, clec, terminating access charges, 8yy query charges
Jan 15, 2018 10:00:00 AM
That’s right, just when you thought the FCC’s terminating switched access reforms to a bill-and -keep regime would make your life simpler, it turns out things are much more complex – and error prone – than ever. For example, in one New York state Local Access and Transport Area (LATA) terminating switched access cost per minute (CPM) can range from $0.00070000 to $0.00883148, that’s over twelve times higher! We’ll share the gory details later in the blog, but first some background.
The July 1, 2017 access filings added a brand-new twist to terminating access rate management, the notion of “affiliation”. Simply put, if the access tandem (AT) and the terminating end office (EO) are owned by the same incumbent local exchange carrier (ILEC) , i.e. affiliated and are price cap regulated - one set of rate elements apply; if the access tandem and the terminating end office are owned by two different ILECs, i.e. non-affiliated, another set of rate element apply.
Jan 12, 2018 10:00:00 AM
Several diverse companies have banded together to complain to the FCC that despite the transition of terminating switched access rates to bill-and-keep, national wireless carriers are engaging in traffic aggregation schemes at the terminating end of calls. In a December 4, 2017 ex parte presentation in Docket 10-90, the Klein Law Group representing Consolidated Communications, Peerless Network and West Telecom Services noted that:
By refusing direct interconnection (and in some cases terminating existing connections altogether) for all terminating traffic or certain types of terminating traffic (e.g., interMTA and/or wholesale traffic), these wireless carriers are forcing such terminating traffic to be routed through their “intermediate carrier partners” or “affiliates” and as a result, originating carriers no longer can terminate such traffic to these wireless carriers on a bill-and-keep basis. (Klein Law Group, ex parte, at p. 3).
Jan 5, 2018 10:00:00 AM
Happy New Year! 2018 is set to be the most unusual year ever for the telecom industry. In every other year I can remember, there were a set of issues everyone knew the FCC was likely to grapple with. Last year with a brand new conservative Commission it was obvious that Chairman Ajit Pai was going to reverse the 2015 net neutrality rules, eliminate one-sided ISP privacy rules (with the help of Congress) and deregulate ILEC special access services. In addition, the Commission improved the pole attachment rules, modified the Lifeline program and began looking at additional switched access reform. It was easy to criticize the FCC for many of its actions, but no one could accuse the FCC of inaction, even when they had less than a full complement of five commissioners.
Topics: regulatory updates, FCC, ILECs, Net Neutrality, Open Internet, internet regulation, open internet order, federal trade commission, internet freedom, CCMI, ajit pai, ftc, litigation, internet freedom order, open internet preservation act, congress
Aug 25, 2017 10:00:00 AM
The next test for the Trump-era FCC is here. Reply comments were filed on August 15, 2017 in the proceeding which will determine whether originating or terminating access charges will apply to toll-free 8YY calls.
The large IXCs believe at a minimum that the current situation in which they pay originating access is untenable. They argue that with the transition of most terminating access charges to bill-and keep nearing transition, industry bad actors have moved their arbitrage schemes to originating access including 8YY calls. As AT&T notes:
Jun 23, 2017 10:00:00 AM
Will rate-of-return (ROR) regulation for rural ILECs soon disappear? It clearly is on the ropes for the many small ILECs now using the Alternative Cost Model (ACAM) to recover their loop costs and receive Connect America Fund (CAF) support. These LECS are no longer in the NECA Common Line Pool and not subject to an authorized common line rate of return.
Apr 14, 2017 10:00:00 AM
CLECs wasted little time in attacking the FCC’s draft Report and Order (Order) that the FCC will vote on and approve on April 20, 2017. The Order will deregulate and eliminate pricing rules for most ILEC special access services. In a series of ex parte filings and visits to the Commission this week, CLECs made it clear that they don’t accept the market test that would be used to classify markets into competitive or non-competitive buckets, believing that too many DS1 and DS3 customers will be left at the mercy of ILEC monopoly pricing.
Apr 7, 2017 10:00:00 AM
In one of its most deregulatory decisions ever, the FCC has released a draft Report and Order (Order) to be voted on at its April 20, 2017 meeting that would largely detariff and eliminate pricing rules for most ILEC special access services. Price cap regulation would continue for ILEC DS1 and DS3 channel terminations only in counties that the Commission deems as non-competitive. Ethernet and ILEC packet services would continue to be provided under contracts. The Order is a major victory for ILECs and cable companies and a major loss for IILEC competitors.
Jan 6, 2017 9:56:24 AM
A couple of weeks ago we reported on a major dilemma for the FCC. Last March the Commission approved a voluntary path that a rural rate-of-return (ROR) ILEC could choose that would provide it with definite universal service support dollar amount per year over a ten-year time period in exchange for meeting FCC mandated milestones for broadband deployment in its territory. The annual funding for each ILEC would be determined by using a cost model called the Alternative Connect America Cost Model (A-CAM) similar to the one already used by larger price cap ILECs. A 10-year budget of $150 million annually was established for the program, with an additional $50 million in reserve if the budget was exceeded in a given year.
Dec 16, 2016 9:52:24 AM
For rural rate-of-return (ROR) ILECs, it has been an interesting year. Back in March, the FCC approved (in Docket 10-90) a new way for rural ILECs to obtain universal service. A voluntary methodology that would provide a carrier definite universal support dollar amounts per year over a ten-year time period in exchange for meeting required milestones for broadband deployment in its territory. The annual funding per ILEC would be determined by using a cost model similar to the one already used by larger price cap ILECs. A 10-year budget of $150 million annually was established for the program, with an additional $50 million in reserve if the budget was exceeded in a given year.