Entries in Call Termination Problems (5)


August – October 2011: FCC Yields to no Earthquake, Hurricane or Industry Consensus 

Exactly How Many New Jobs will Broadband Create?

Part 3 of “2011: The Regulatory Year in Review.” Autumn was intense—no doubt about that. From the early August release of the Public Notice on the ABC Plan to the October 27 FCC vote on the USF Order, these 3 months were chock-full of excitement. One trend I noticed during this time was the overwhelming number of job creation claims associated with government and private sector broadband initiatives. Sure, broadband helps create jobs and certainly provides new possibilities for individuals to further their educations, start businesses at home, and conduct commerce on an international scale. But will a few government decisions and one colossal merger create literally millions of new jobs? Or is “broadband = tons of jobs” just the catch phase of the year?

August 2011: August began with the Public Notice on the ABC Plan and ended with a rapid-fire comment cycle. In between these events, we saw several natural disasters and an unprecedented FCC blog post on USF/ICC reform signed by all 4 Commissioners proclaiming that the Public Notice “marks the final stage of our reform process.”

On August 4 in Jefferson, Indiana, FCC Chairman Julius Genachowski announced “jobs4america,” “a new coalition of forward-looking businesses committed to bringing thousands of new jobs in America.”  If you are keeping a tally of broadband-related job creation claims, add 100,000 to the list—primarily broadband-enabled call center jobs, including home-based call centers. Genachowski applauded a new call center in Indiana, adding “So broadband really is enabling new economic opportunities, creating jobs and revitalizing communities—including some communities that thought their best days might be behind them.” Of course, he made sure to mention his recent trip to rural Diller, Nebraska. A fact sheet about jobs4america lists 575 broadband-enabled call center jobs that have actually recently been created, and another 17,500 or so “job creation goals over the next two years.” So… 100,000? Seems like a stretch.

The job claims didn’t stop with the FCC—President Obama also pledged to bring new jobs to rural America at an August 16 Town Hall meeting in Peosta, Iowa. Obama’s visit complemented a White House Rural Economic Forum and the release of a White House Rural Council report, “Jobs and Economic Security for Rural America.” One of the primary goals of the Council is to deploy broadband to 7 million rural Americans currently unserved, which will help enable distance learning, health care, and of course—new jobs! (The ILEC Advisor: Obama Pledges Rural Jobs and Economic Growth).

Finally, who will ever forget AT&T’s preposterous claim that the merger with T-Mobile will create 96,000 jobs? Certainly not anyone who lived in DC these past few months, as AT&T blanketed the media with commercials and print ads touting this alleged benefit of the merger.  On the same day that AT&T ceo Randall Stephenson told CNBC that the company would bring 5,000 international call center jobs back to the U.S, the Department of Justice slapped AT&T with the allegedly-shocking news (to AT&T anyway) that it had filed a suit to block the deal. (The Deal Advisor: Surprise, Surprise…DOJ Says “No Way” to AT&T – T-Mobile Merger).

September 2011: DC was still shaking and drying out from the August hurri-quake in early September, and the FCC responded by holding a public safety workshop on network reliability and outage reporting. Genachowski stated, “The hurricane and earthquake also shed light on ways we can continue to enhance our work to ensure the reliability of communications during and following disasters… Our experience with these events will inform our pending rulemaking on outage reporting… [and] our separate but related inquiry on network reliability.” Meanwhile, another threat to public safety has emerged over the last couple years in the form of rural call termination problems, but the FCC has moved much slower to address this issue than they did to address two East Coast natural disasters that caused very little disruption to communications networks. A large portion of the FCC’s September agenda was dominated by public safety, disaster preparation and network reliability topics.

A significant step in developing the White Space spectrum occurred on September 14 with Genachowski’s announcement of a 45-day public trial of the Spectrum Bridge Inc. White Space database. Genachowski explained, “Unleashing white space spectrum will enable a new wave of wireless innovation. It has the potential to exceed the billions of dollars in economic benefit from Wi-Fi, the last significant release of unlicensed spectrum, and drive private investment and job creation.” No word on how many hundreds of thousands of jobs the White Spaces may create, but definitely look for more progress on White Space spectrum development in 2012.

Job fever continued with the September 12 release of the Obama Administration’s American Jobs Act legislative proposal which included a “National Wireless Initiative” to repurpose underutilized spectrum through incentive auctions, reduce the federal deficit, and of course, create jobs (The ILEC Advisor: American Jobs Act Includes Wireless Initiative, Public Safety Network). Despite all of the heavy-duty job creation claims by the FCC, White House and telecom providers; some rural stakeholders warned that the FCC’s proposal for USF/ICC reform will actually eliminate jobs. Impact studies conducted by universities in New Mexico, Kansas, Colorado and Missouri made dire predictions about RLEC jobs, state and local taxes, RLEC wages, and total economic impact in their respective states. Although I was skeptical about some of the calculations, these impact studies definitely carried an important message about the value of RLECs to local and regional economies (The ILEC Advisor: New Mexico Study Depicts Life without USF, State USF Reform Impact Studies Predict RLEC “Death Spiral”).

October 2011: As the death of Steve Jobs rocked the galaxy, Genachowski’s October 6 announcement that the USF/ICC rules would indeed be on the October open meeting agenda launched the telecom industry into one final frenzy.  Unfortunately, Genachowski’s big reveal did little to ease our anticipation as it gave very few solid clues as to what “devils” were lurking in the details of the Order. Genachowski predictably mentioned his visit to Diller, Nebraska and claimed the reforms will “spur billions of dollars in private investment and very significant job creation”— 500,000 jobs to be exact.

We expected the Order would be about 400-500 pages long, and would be released shortly after the October 27 Open Meeting, where it was approved unanimously. We were wrong… Although we had to wait a few more weeks for the rules, the Commissioners revealed enough at the Open Meeting for it to become clear that the ABC Plan/Consensus Framework/RLEC Plan were not adopted in entirety, or really at all. Thus began 3 weeks of general panic. (The ILEC Advisor: Finally – Genachowski’s Big Announcement on USF/ICC Reform).

The FCC threw the RLECs a bone on October 18 with a workshop to address rural call termination problems. The workshop was a good first step to publically bring attention to the pervasive issue, but it almost seemed “too little too late.” After all, these problems have been increasingly occurring for more than a year. Thousands upon thousands of calls have not reached their rural destinations, harming small businesses, threatening public safety and straining family relationships with great aunt Gertrude. Rural panelists urged the FCC to issue forfeitures and fines to companies found intentionally blocking or degrading calls to high-cost rural areas, but so far no actions have been taken. Expect this issue to rear its ugly head in 2012. (The ILEC Advisor: FCC Finally Gets the Message about Rural Call Termination Problems, Rural Panelists Discuss Call Termination Problems – Causes, Effects, Solutions).  

Also notable in October, the Net Neutrality rules finally stopped collecting dust in the Office of the Federal Register storage room. Political polarization over the rules became almost too much to handle. Lawsuits from the left and right popped up faster than you can say “anti-discrimination,” and we can all look forward to a 2012 court showdown between Verizon, Free Press, the FCC and others at the U.S. Appeals Court in Washington. (The ILEC Advisor: Net Neutrality Fight Intensifies – In Washington Anyway).

While not without hurricane-force excitement, the early fall months were certainly the calm before the real storm—look for the final installment of “2011: The Regulatory Year in Review” covering November and December next week!


Rural Panelists Discuss Call Termination Problems – Causes, Effects, Solutions

A Perfect Storm of Economic Incentives and Technology Brews Arbitrage

USF/ICC reform may be the dominant rural telecom regulatory topic at the moment, but rural representatives from across the country took the initiative to come to the FCC this week and present information about rural call termination problems at a public Workshop. The purpose of the October 18 Workshop, which also included panelists from large ILECs and CLECs (but noticeably no pure VoIP providers), was to identify why these problems are occurring, what impact the problems have on companies and consumers, and how the problems can be solved with regulation, standards, enforcement or best practices.

This Workshop was the result of strong efforts by the Rural Associations and several state Commissions, who have pleaded with the FCC to address rural call termination issues throughout the year (The ILEC Advisor:  FCC Finally Gets the Message about Call Termination Problems). Commissioner Mignon Clyburn opened the Workshop by acknowledging that rural call termination problems are indeed troubling for public safety, health care, businesses and people just trying to communicate by phone. She sympathetically said, “I want my call to go through, and I know you want yours to go through as well.”

The first panel tackled the causes, scope and impact of the problems. Panelists included Robert Gnapp (NECA), Fritz Hendricks (Onvoy Voice Services), Denny Law (Golden West Telecommunications), Dave Lewis (ANPI/Zone Telecom), Kim Meola (AT&T), Dale Merten (Toledo Telephone) and Tami Spocogee (PAETEC). Gnapp summed up the situation by saying, “This is the most troubling, time consuming and frustrating problem [rural providers] have ever had to deal with.”  Hendricks added that it “vilifies” RLECs, even though he has “yet to find a rural carrier” who was at technologically at fault.

Lewis and Hendricks provided insightful comments about how the relationship between economic incentives and technology creates ripe opportunities for arbitrage. Lewis reasoned that as telephone rates increase, companies lose business, and they may look for ways to evade economic challenges and “change the cost dynamics.” Unfortunately, it costs more to terminate calls in rural areas, so companies facing economic pressure might refuse to terminate calls to high-cost areas in an effort to save money. Hendricks explained that “technology provides a vehicle for arbitrage, but economics create the incentive.”

In terms of the causes of call termination problems, many are quick to blame Least Cost Routing (LCR) technologies (and the carriers who utilize LCR). However, several panelists pointed out that LCR has been around for at least a decade, whereas these problems have dramatically increased in the last couple of years. Spocogee stated that LCR isn’t the problem if it is done correctly. Another possible troublemaker called “SIM Box Fraud” was also identified.

There was no shortage of examples of the impact on consumers and rural economies. Merten described a rural community in the Pacific Northwest with an economy based largely on tourism and charter fishing. He claimed that this rural community has been “absolutely devastated” as a result of calls not being completed to the charter fishing businesses. Merten’s company has invested significant resources and time to track and identify the source of call termination problems. In Law’s South Dakota service area, hundreds of automated calls from a school district failed to reach parents to notify them of school closings or other important news. Other panelists and audience members cited specific difficulties experienced by rural health care providers and sheriff’s offices. Gnapp explained that there have been at least 10,000 documented complaints, but the complaints are only a “small subset” of the real number of failed calls to rural areas, which could be in the millions or tens of millions.

The second panel addressed possible resolutions. Panelists included Scott Booth (Verizon), Jill Canfield (NTCA), Martin Corso (TDS Telecommunications Corp.), Penn Pfautz (AT&T) and Rick Ratliff (Sprint). The primary means to address call termination problems appear to be through regulatory intervention, enforcement, industry standards or best practices; but the panelists differed as to which solution is most appropriate. Considering how diverse the sources and causes of call termination problems are, a combination of resolution mechanisms may be the best course of action going forward.

One of the biggest challenges is actually figuring out the source of the problem—without this key information, it is indeed difficult to remedy the situation. A “carrier list” of contacts at IXCs who will help rural carriers address and resolve problems has been created, but Canfield commented that the carrier list is only helpful if the customer complains, the originating IXC can be identified, and the originating IXC is on the list. She also said that it places the burden on the consumer, and Corso later added that business customers are especially reluctant to contact their customers and then tell them to contact their originating carriers—it is definitely a lot of trouble for all parties afflicted.

I thought it was interesting that the large ILEC panelists all seemed sympathetic and dedicated to working with the RLECs on these issues, but the ILECs have the capacity to invest millions of dollars and dedicated staff specifically to monitor and track down non-compliant parties. For example, Ratliff mentioned that Sprint has an email address for call termination complaints and “several staff” who just monitor complaints and “go after bad actors.” Buying expensive monitoring technology and hiring several full time employees to address call termination problems is a luxury that few—if any—small RLECs can afford right now, yet the number of complaints can reach dozens per day. I would imagine some RLECs could keep a full time employee busy by just addressing call termination complaints.

Differences aside, Pfautz insisted that AT&T “[makes] money by completing calls, not by dropping them on the floor.” Booth added that Verizon wants calls to be completed so consumers have a “positive experience;” and Sprint and AT&T are both dedicated to shutting down arbitragers and ending relationships with non-compliant intermediaries.

Will the pledges to take a hard line on arbitrage be sufficient, or does the FCC need to intervene? The rural panelists at the Workshop seemed to agree that the upcoming ICC reforms will not be a solution in themselves, and the ideal course of action may be a combination of best practices, monitoring, reporting and enforcement. Canfield stated that best practices are a good start, but not everyone will follow them so long as there are financial incentives not to; Corso added that monitoring alone is not an appropriate solution. Canfield also argued that the FCC has the authority and ability to issue forfeitures under the current call blocking rules, and these problems could be treated as de facto call blocking.

Overall, this Workshop was very interesting and definitely an important first step in getting the FCC’s attention and moving forward towards consensus and resolution. A number of states are also conducting inquiries on this issue; so hopefully industry, government and consumer stakeholders will begin experimenting with and implementing remedies.

Meanwhile, it would be great if the “bad actors” would take note that RLECs are not going to sit back and continue to let these problems reach an epidemic scale. The fact that a number of panelist and a large portion of the audience in attendance at the FCC came from all over the country really spoke to the gravity of this matter. Indeed the significance and somberness should not be underestimated—as an audience member who traveled to DC from rural Missouri said, “One death because of this issue is not worth the billions of dollars saved.”

The full video recording of the Workshop is available here.


FCC Finally Gets the Message about Rural Call Termination Problems  

After Months of Pleading by Rural Industry, FCC Announces Workshop and Task Force

On September 26, 2011, the FCC announced plans to hold a workshop on October 18 and launch a Rural Call Completion Task Force “to investigate and address the spreading problem of calls to rural areas that are being delayed or fail to connect.” The FCC’s announcement comes after months of letters, filings, and state efforts to catch the FCC’s attention on this growing problem. NTCA, OPASTCO, WTA and NECA have all been persistent about informing the FCC of call termination problems, and it looks like the FCC has finally gotten the message loud and clear—unlike many rural consumers who are not getting their calls and faxes.

In the September 26 press release, the FCC acknowledged that there has been a reported 2000% increase in call termination complaints between April 2010 and March 2011, and “Failed or degraded calls not only undermine the integrity of the nation’s telephone networks and frustrate customers, but they also pose a serious risk to public safety and harm the rural economy.”

A September 20 “Request for Public Workshop and Policy Statement on Call Routing and Termination Problems in Rural America” by NTCA ceo Shirley Bloomfield may have been the kick that the FCC needed. Bloomfield’s letter to FCC Chairman Julius Genachowski urges the FCC to “issue a clear and unequivocal policy statement” and conduct a public workshop. Bloomfield argues, “Consumers in rural communities deserve at least the same level of network reliability as urban consumers, and failures to deliver calls to rural America are just as worthy of examination in a public forum.” Bloomfield is referring to a recent FCC workshop on network reliability which resulted from network reliability issues being thrust in the spotlight after the recent East Coast earthquake and Hurricane Irene.

Bloomfield also explained that RLECs cannot handle the myriad call termination problems alone, and “Consideration and resolution of these issues can no longer be left to linger in endless debate, or in one-on-one operational discussions, or in behind the scenes industry workgroups, or in sporadic policy deliberations in small conference rooms” because these issues create “substantial risk for public tragedy and financial distress.”

In preparation for the October 18 Workshop, I thought it would be interesting to research recent association, carrier and state efforts to battle this pervasive, nationwide problem. I turned up a considerable amount of interesting information, summarized in the following timeline:

March 11, 2011 Rural Representatives meet with FCC: In this ex parte meeting, the Rural Representatives presented an overview of the rapidly increasing call termination problems experienced in a variety of states. 80% of respondents to an NTCA survey reported experiencing call termination problems. The Rural Representatives described the consequences of call termination problems for RLECs, businesses, consumers and public safety. Apparently, one business “invoiced its rural LEC for more than $50,000, citing lost sales from potential customers” when customers were repeatedly unable to reach the business by telephone.

April 4, 2011- Letter to Genachowski from Representative Robert Latta (R-OH): Rep. Latta explained that he represents the largest agricultural district in Ohio, which is served by 18 RLECs. Latta writes, “I am asking that you investigate the problem of incoming calls being terminated in rural areas and if unjust and unreasonable discrimination is occurring, if there is a violation of common carrier requirements, or if calls are being blocked.” Latta expresses concern that blocked or incomplete calls result in missed opportunities for small businesses. On August 2, FCC Chairman Genachowski responded saying that the FCC needs specific information, and “it is not clear if these calls are being dropped intentionally, or if there is a technical issue that prevents their completion.”

June 13, 2011- Rural Representatives send letter to FCC: This letter described in detail the call termination problems experienced by rural consumers, and hinted that magicJack and other Least Cost Routing (LCR) carriers may be at fault for some of the problems. The Rural Representatives described how difficult it is to identify the source of call termination problems, and that RLECs are often blamed even if they are not at fault (The ILEC Advisor: RLECs to FCC: Please Investigate Call Termination Problems, June 20, 2011).  

June 24, 2011- Oregon Public Utilities Commission Call Termination Workshop: This workshop included presentations by the Oregon Telephone Association RLEC members. Canby Telephone vp of network operations Brandon Zupancic presented a very interesting analysis of least cost routing. He argued, “Least cost routing, if implemented right, would benefit everyone. However, there are many unintended consequences of LCR!” Zupancic explains, “Some originating carriers route calls to LCR providers and those contracts stipulate that they will not complete calls to certain NPA-NXXs (due to costs to terminate in those areas)—but the originating carrier may not know that and keeps sending calls to that LCR provider destined for that terminating location.”

Zupancic also explains that rural customers and businesses are seeing significant problems with receiving faxes; and Canby has tested lines, tested inside wiring, verified filters, sent faxes to the afflicted customers from local lines, and even replaced customer fax machines with the company’s own devices only to see continued delivery failure. According to Zupancic, VoIP compression “creates excessive packet loss that fax machines cannot correct, so fax transmissions consistently fail at a high rate whenever they originate, transit, or terminate a VoIP/SIP network.”  To learn more about LCR, Zupancic's presentation is definitely worth a read (available here). The Oregon Public Utilities Commission announced a formal investigation into call termination problems on July 5, 2011. 

July 21, 2011- New Mexico Exchange Carriers Group presentation to NM Science Technology & Telecommunications Committee: Jeremy Graves, coo of Valley Telephone Cooperative, presented information about LCR and rural call termination problems in response to a request from the NM Science Technology & Telecommunications Committee. He stressed that RLECs cannot help customers resolve many of these problems, and the livelihood of rural residents and businesses is at stake. He explains that businesses, “in most cases, are solely dependent on their ability to receive calls. Calls to these businesses, when not completed, give the impression that they are closed and revenue is lost.” Graves presented the following chart which illustrates the nature of LCR:

September 7, 2011- Montana Telecommunications Association letter to FCC: MTA general manager Geoffrey Feiss writes, “It seems to me that a virus that has been afflicting telecommunications traffic nationwide for more than a year, which the FCC has been made aware of repeatedly, warrants at least as much attention as the also-important issue of intermittent loss of signal during natural disasters,” also referring to the recent East Coast earthquake and hurricane. Feiss includes letters from customers that highlight increasing problems in call quality, missed business opportunities, and concern about family members who cannot be reached by telephone.

September 20, 2011- Oklahoma Corporation Commission, “Making a Connection:” OCC announced that it sent a letter to the FCC supporting a July 20 National Association of Regulatory Utility Commissioners (NARUC) resolution to investigate call termination problems. NARUC determined that call termination problems “create negative public interest,” and “are antithetical to the public interest by creating confusion, isolation and frustration on the part of called parties and calling parties.” OCC is also conducting an inquiry.

These examples clearly illustrate that call termination problems are serious, substantial, and persistent. They are not a result of a technological defect in the RLECs’ networks, they are a result of regulatory loopholes and access charge avoidance schemes. Even though the FCC intends to reform the Intercarrier Compensation system soon, RLECs cannot afford any more delay on resolving call termination problems.

The failure to complete calls to rural customers on such a large scale weakens America’s entire telecommunications industry and creates inexcusable public safety risks in addition to lost business opportunities. The problems prevent family and friends from communicating with each other, and reflect poorly on an RLEC’s reputation. It is not only difficult for RLECs to troubleshoot these problems, but it is difficult to even explain to consumers what is happening when they cannot be reached by telephone or fax. How many everyday consumers would actually assume that a call isn’t completed because of least cost routing, much less understand it? More importantly, how many failed calls are not reported every day?

I, for one, am happy that the “call” to the FCC to address these problems went through. What do you think is the best course of resolution for rural call termination problems? Is ICC reform the solution, or should the FCC do more?


Western RLECs Support “Separate but Integrated” RLEC and ABC Plans

Western Associations Urge FCC to Adopt Consensus Framework and Strict Call Termination Rules

On August 24, 2011, the Western Associations (comprised of state telecom associations from California, Colorado, Idaho, Montana, Oregon, Washington and Wyoming) filed joint comments on the Further Inquiry in the Universal Service-Intercarrier Compensation Transformation Proceeding. In their comments, the Western Associations voiced support for the Rural Associations’ RLEC Plan for rate-of-return companies and presented some rather convincing arguments for strong call termination rules.

The Western Associations argued that the RLEC Plan is “a well thought out, integrated and comprehensive plan that represents significant compromise on the part of rural telecommunications companies across the nation,” and RLECs would experience less financial loss under the Consensus Framework of the RLEC Plan and ABC Plan than they would under the FCC’s initial USF/ICC NPRM framework. The Western Associations seem to understand that RLECs need to let go of some of the USF-enabled financial security of the past, for “the landscape is changing, and members of the Western Associations recognize the change must come” regarding USF and ICC. I found this notable, because the physical landscape of the states in the Western Associations is arguably the most expensive and challenging in the nation to build wired broadband, and I think this particular comment illustrates that these companies are being very realistic and reasonable about the future of USF.

The Western Associations emphasize that if the FCC adopts the Consensus Framework, two conditions must exist: the FCC should not pick and choose specific components of the RLEC Plan to adopt, and “it would not be appropriate to comingle aspects of the ABC Plan with the RLEC Plan and apply the comingled set of outcomes to the rural incumbent local exchange industry.” Although the ABC Plan was the result of broad industry negotiations including RLECs, it is really only applicable to large price cap carriers—the Western Associations note that “The ABC Plan and the RLEC Plan are carefully balanced to work together on separate, but parallel tracks taking into account very real differences between price cap and rate of return companies.”

The Western Associations provided some examples to illustrate how the RLEC Plan would result in revenue reductions, but not nearly as dramatic as the revenue reductions estimated under the FCC’s National Broadband Plan framework. Toledo Telephone Company calculated that it would see annual revenue reductions of $975,000 by 2015 under the FCC’s plan and annual revenue reductions of $275,000 under the RLEC Plan. I personally feel that $275,000 is still a substantial hit in revenue for a small company, but if it means the difference between defaulting on loans and laying off half the employees, then clearly the $275k hit might not the end of the world. The Western Associations agree, arguing, “while the RLEC Plan changes the support a rural company will receive, the change is manageable. The financial shocks of the NPRM proposals are not.”

I thought the Western Associations made an interesting point about the size of revenue reduction as a result of USF and ICC reform—they argued that companies should not lose more than 5% of their current USF support in a given year. They reason, “such a provision would also avoid losses in revenue that could negatively impact business plans, negatively affect the ability of a company to repay loans or have the negative consequence of preventing a company from obtaining new debt financing to pursue broadband deployment.” Although I agree with this reasoning in theory, I question how such a 5% annual reduction cap would work under the final rules. I also feel as though the FCC intends to make more significant USF reductions for companies that have been allegedly abusing the system, so a 5% reduction might not be sufficient to bring such companies in line. In other words, the bad actors might get a hall pass to continue receiving more USF support than needed.

The Western Associations took the opportunity to bring up an especially vexing ICC-related issue in their comments: least-cost routing abuse and call termination arbitrage. This is becoming a serious problem in rural areas, where calls are not being completed or experiencing quality problems to customers in rural areas, primarily RLEC customers. The Western Associations argue, “This abuse of telecommunications providers’ responsibility to complete calls is causing substantial economic and personal harm. Rural businesses are losing customers. Families, sometimes with sick loved ones, are unable to complete calls to one another.” They provided several convincing examples of this problem: a state patrol office in the Wahkiakum West Telephone Company service area repeatedly experiences calls not coming through; medical workers and pharmacies are not able to reach patients in rural areas; and a son of an elderly woman in the St. John Telephone Company service area could not reach his elderly mother, which resulted in emergency crews being sent to her home twice (for no reason). The Western Associations sternly state, “Someone in a rural community should not have to die to get this problem addressed.”

What is the solution to the call termination problem? The Western Associations urge the FCC to adopt the traffic signaling rules outlined by the Rural Associations, which “require complete population and end-to-end transport without alteration of call signaling records.” Furthermore, they encourage the FCC to equate call termination problems with call blocking, and issue severe penalties for companies who engage in this type of arbitrage. I personally feel that there is no technological excuse for any provider preventing calls from being completed in a rural area—it comes down to money and greed, and the problem has escalated to the point where regulatory intervention is now needed to correct a market failure.

Overall, I thought the Western Associations provided some convincing arguments and examples in favor of the RLEC Plan and Consensus Framework. The Western Associations appear to have a forward-looking and reasonable attitude towards USF/ICC reform, and they clearly are bracing for change and revenue reductions as a result of the reforms.

The Western Association’s comments are available here.


RLECs to FCC: Please Investigate Call Termination Problems

Rural Telecom Associations Alert FCC about Troubling Call Termination Complaints

You have probably seen the commercials for magicJack: $20 per year for unlimited calling through an easy-to-use device that plugs a traditional telephone right into your PC. Surely, this is a tempting offer for many budget telecom consumers, but it comes with a major caveat—calls intended for high-cost rural areas may not be completed. Last week, NTCA, NECA, OPASTCO and WTA (the “Rural Representatives”) filed a letter with the FCC pleading for an investigation into the dirty business of call termination problems, likely caused by magicJack and other “least cost routing” originating and intermediary carriers. Although specific information about the potentially guilty parties was redacted in the public version of the letter, the Rural Representatives included a screenshot from a magicJack FAQ website stating that “some restrictions in cost prohibitive areas may apply.” In other words, buyer beware, because magicJack customers may not be able to place calls to friends, family and business associates served by an RLEC. The letter describes that when call termination problems arise and are actually reported, it is often the RLEC who is erroneously blamed.

The letter, which was a follow-up to an earlier meeting with the FCC on the topic of call termination problems, outlined several specific problems that RLECs have been experiencing at a dramatically increasing rate over the last few months. The first problem is that calls ring on the calling party end, but they are delayed or nonexistent for the called party. Second, the calling party receives a message that the call cannot be completed, but the call never actually reaches the RLEC’s switch. Third, calls “appear to ‘loop’ between routing providers, but never reach the RLEC or tandem it subtends;” and finally, the called party sees incorrect or garbled caller ID information which may make the called party ignore the call completely. All of these problems are serious—the Rural Representatives argue that “the problems currently faced by customers in rural America fly in the face of every reasonable expectation of what the PSTN should be,” and “small businesses [lose] tens of thousands of dollars in sales because their customers cannot reach them.” Furthermore, the Rural Associations point out that these problems present a serious public safety risk, with “families being unable to communicate and check on the safety and well-being of their loved ones.”

The Rural Representatives provided considerable and telling statistics about these problems. Apparently, 80% of 200 RLECs surveyed had experienced problems of this nature; and between 2008 and April 2011, 10,163 customer complaints about these problems had been documented. Unfortunately, the Rural Representatives note that this number is just the “tip of the iceberg” because many of these problems are never reported. The statistic that I found most shocking was that call termination complaints have increased 2000% over a one-year period from April 2010 through March 2011. The following chart illustrates the dramatic increase in call termination complaints since 2008:

The Rural Representatives discuss how difficult it is for RLECs to identify the source of the problem, because there is often more than one “Underlying Provider” (wholesale IXCs, IP transport and “least cost routing” providers) utilized between the calling party at point A and the called party at point X. To add to the trouble of pinpointing the source of the problem, the “Retail Provider” (the source of the call—usually retail IXCs, wireless or VoIP providers) is often unwilling to work with RLECs for any number of reasons. The Rural Representatives included comments from RLECs illustrating the hoops that RLECs must jump through to cooperate with the Retail Provider and resolve the call termination issues:

  • “We leave messages with the originating caller, but often they don’t return our calls. When we are able to make contact with the originating party, they are not always cooperative, they just see it as our problem, and we should be able to fix it without wasting their time.”
  • “Most carriers will not talk to us because we are not the Customer of Record. CPNI rules prevent them from working with us unless their customer initiates the trouble ticket. So we must convince somebody that has never heard of us to call their long distance company and open a trouble ticket and give us permission to talk with them, and we must also request this person call us long distance to troubleshoot.”

The Rural Representatives asked the FCC to open an investigation and provide assistance to “get to the bottom” of these issues, because “RLECs are powerless to correct this issue on their own.” The Rural Representatives cite Section 201 and Section 251(a) of the Communications Act, previous declaratory rulings, and even the Net Neutrality rules as support for the argument that Retail and/or Underlying Providers cannot continue to play foul with traffic headed for RLEC customers. According to the Rural Representatives, a 2007 FCC declaratory ruling deemed that “no carrier, including interexchange carriers, may block, choke, reduce or restrict traffic in any way;” and the fundamental No Blocking rule in the Net Neutrality Order states that fixed and wireless broadband providers cannot block lawful applications, services or devices.  The Rural Representatives argue that Retail Providers are largely responsible for the problems, because they are the provider that “[sets] into motion the chain of events that caused the call to fail.” 

I believe that if these problems remain unresolved, there will be profound negative implications for the reputation of RLECs. With all the regulatory uncertainty and impending USF changes, RLECs cannot risk “looking bad” to consumers or the FCC. The average customer of magicJack or a similar VoIP service probably does not know about the roles of routing tables or call signaling, or what happens to a call in the split second it takes to reach the called party (that is, if it reaches the called party). When a call to an RLEC customer is not complete, the first response from calling and called parties is probably to blame the RLEC, which could ultimately threaten an RLEC’s very existence if customers drop their service as a result of these problems.

I also see a direct connection between these particular problems and “phantom traffic” problems outlined in comments filed on April 1, 2011 for the Intercarrier Compensation portion of the USF Reform proceeding. RLECs and other voice carriers are concerned that VoIP providers are masking or failing to include critical call signaling information as part of an access rate avoidance scheme. If the FCC were to impose strict call signaling information requirements, would some of these call termination problems—like the problem of called parties receiving garbled caller ID information—be mitigated? I certainly hope that the FCC takes the Rural Representatives’ letter seriously and opens an official investigation into these matters before more RLECs waste time, resources and personnel to troubleshoot problems that they clearly are not liable for. Meanwhile, I hope magicJack customers realize that they may be getting what they pay for, so to speak, with their $20 per year service—at half the cost per year of what most contract-service providers charge per month, some restrictions are bound to apply.

You can download the letter from OPASTCO’s Press Center here.