With 8YY Transition Complete and New Access Arbitrage Rules in Effect, Do We Still Have an Access Stimulation Problem?

By: Andy Regitsky

To combat 8YY access stimulation, the FCC in October 2020 transitioned ILEC interstate and intrastate toll-free originating end office access service rates to cost-based rates over a three-year period ending July 2, 2023. The transition included:

Reducing interstate and intrastate toll-free originating end office access service rates to bill-and-keep

Adopting a uniform nationwide rate cap of $0.001 per minute for originating 8YY tandem switching and transport access as of July 1, 2021

Reducing toll-free database query charges to $0.0002 per query over a three-year period ending July 1, 2023.

Notably, the Commission extended this rate transition to competitive LECs (CLECs) pursuant to the so-called benchmark rules, which require CLECs to tariff switched access rates that are no higher than the benchmark rates charged for similar services by the competing ILEC.

CLECs had 15 days to mirror the new ILEC rates, meaning their tariffs should have been updated to complete the transition by July 18, 2023.

There had been concerns expressed by the industry that the 8YY changes would not stop access stimulation completely. For example, Bandwidth explained that

traffic pumping of Toll-Free calls persists even after the FCC’s adoption of originating 8YY access reforms. Carriers are finding creative ways to replace the anticipated loss in revenue, such as by tariffing charges for the exchange of IP-IP traffic, “buying” originating toll-free traffic to increase volume, and routing traffic through multiple tandems prior to delivering it to the RespOrg. At the same time, carriers and their customers continue to find creative ways to increase revenue from terminating tandem charges, such as by homing telephone numbers to affiliated and unaffiliated tandems that result in multiple tandem switching charges or tandem charges in lieu of direct IP interconnection. (Bandwith Notice of Ex Parte Communication, Docket 18-155, July 21, 2021).

It is important to note however, that Bandwidth’s fears were not echoed by other carriers. In fact, in an almost unprecedented occurrence, since 2021, no other LECs have complained about 8YY access stimulation. Suggesting that 8YY access stimulation is no longer a significant problem!

More recently, the FCC took its latest steps to stop access stimulation of non-8YY calls in April when it promulgated new rules to stop carriers from using Internet Protocol Enabled Services (IPES) to evade the access stimulation rules. While it is too early to determine whether the Commission will be successful, some carriers are concerned that determined companies will still try to evade the new rules. For example, Luman notes that there are

problems likely to result from the [Order’s] seeming establishment of a different “shift of financial responsibility” rule for AS [Access Stimulator’s] IPES Providers whereby, instead of what happens with AS LECs—where the Intermediate Access Provider ceases to bill the IXC for tandem switching charges and is entitled to bill the AS LEC — for AS IPES Providers, the IAP “will have an option and may seek compensation from an access-stimulating IPES Provider” to replace the charges previously assessed against IXCs. 2 The [Order] contemplates that “Intermediate Access Providers, LECs, and IPES Providers may determine their own billing arrangements” to cover these charges, presumably through negotiation. However, as the [Order] notes elsewhere, all terminating providers, including IPES providers, have the ability to designate an IAP as their terminating access tandem in the LERG. Lumen is concerned that an IPES entity that becomes designated as an access stimulating entity may decline to enter into a commercial arrangement with its designated IAP without approval from that tandem owner. And because of this ongoing LERG designation, traffic terminating to this AS IPES provider will continue to be routed by IXCs to this LERG-designated tandem with the IAP now having no ability to recover its costs. (Luman Ex Parte, Docket 18-155. April 14, 2023.

Other carriers are also worried that intermediate carriers will be forced to provide transport for calls without receiving compensation. Hopefully all concerned carriers have modified their tariffs to ensure this does not happen.

Only time will tell if the FCC has stopped access stimulation completely. If history is our guide, however, some determined carriers are developing novel ways to evade the rules. Hopefully, such carriers are few and far between.