Protect 'Innocents' From Inclusion in Access Stimulation Definition, FCC Asked

Make sure small phone carriers with legitimate spikes in incoming calls don't get swept up in a coming FCC order redefining how phone companies are deemed access stimulators, said representatives of rural LECs and other small LECs in interviews last week and in docket 18-155. Chairman Ajit Pai's draft gets a vote Thursday (see 1909050043). The rules would shift financial responsibility for tariffed tandem switching and transport services away from interexchange carriers to the access-stimulating LEC for terminating traffic.

An FCC official acknowledged the lobbying efforts over the past two weeks. At issue is whether revenue-sharing is kept as a mandatory part of the definition before a carrier can be designated an access stimulator, and if not, whether the order adds rebuttable presumption. If it does, the agency would have to determine whether to include a time limit on answering such petitions and specify whether interexchange carriers could withhold revenue from the LECs in question until the matter is settled, the official noted Friday. A commission spokesperson declined to comment.

USTelecom is "excited to see the commission address this issue that's been hanging out there for over a year now," said Mike Saperstein, vice president-policy and advocacy. The Wireline Bureau took comment in August 2018 (see 1808060042). Some companies have found ways to game the intercarrier compensation system, Saperstein said. Since USTelecom represents large and small companies, it has a unique view, he said. "We recognize there are legitimate good actors in danger of being swept up" in the changes, he said. In looking at filings, "there seems to be an agreement among the parties" on recommended changes to the draft order, he added. USTelecom wrote officials Wednesday.

NTCA's primary concern is the change in definition of access stimulator that "eliminates the notion that you must have a revenue-sharing component" to fall into the category, said Mike Romano, vice president-industry affairs and business development. The rules would raise carriers' terminating-to-originating call volume ratio from 3:1 to 6:1 before it would trip the trigger that places one into the access stimulator category. Romano's concerned the draft definition could "sweep up a number of innocents."

Consequences for small carriers that fall into the new definition "are pretty severe," Romano said. They lose revenue from long-distance companies for terminating incoming calls, and could have to pay transport and tandem costs for the high-volume traffic. NTCA wants the FCC to more-strictly enforce mandates against access stimulation in place since 2011. If the agency adopts the new definition, NTCA wants it to add a "rebuttable presumption" so financial consequences don't hit those that aren't traffic pumping. Under such a scenario, if a small carrier can point to a legitimate reason for a spike, the burden would shift to the long-distance carrier to prove the smaller company was gaming the system, Romano said. He worries about telcos being removed from the National Exchange Carrier Association intercarrier compensation pool, losing access to USF money. The association met with FCC officials over the past week.

Being tossed from the USF pool is possible, noted Jeff Dupree, NECA vice president-government relations. Those carriers would be required to exit NECA's pools and tariffs. No current NECA carriers have revenue-sharing agreements with access stimulators, so none meet the current definition, he said.

Call Spikes

Small carriers can encounter high inbound calls during a natural disaster, mass shooting, or even a financial market swing, Leo Wrobel, CEO of FailSafe Communications, told us. He wants the FCC to add an exemption for emergency call traffic so sudden heavy volumes of call terminations don't hurt carriers.

Shifting the cost burden from long-distance carriers to smaller providers could hurt ancillary businesses, said Andrew Nickerson, CEO of Wide Voice Communications: "It's an incumbent-friendly policy that will hurt competition." He predicted smaller phone companies with a high level of incoming call traffic would be compelled to "find outbound calling in some shape and form" to balance their ratios, to avoid being designated access stimulators.

A common reason some RLECs have excessive interstate terminating-to-originating traffic ratios "is that the carrier has a call center or other legitimate business customer that receives many more interstate terminating calls than it originates," WTA filed Wednesday. "Members are also concerned that increasing trends by cellular customers to originate calls predominately on their mobile phones while using their residential wireline phones primarily to receive calls will push many more Rural LECs toward and over the 6:1 ratio within the foreseeable future."

Stakeholders shared other ways incoming call volume could spike without deliberate attempts, such as when a company in a very small market publicizes a job listing or when local hotels face a once-a-year busy period. In the example of a large agricultural equipment manufacturer drawing heavy call volume to inquire about potential employment, that's not scheming, Romano said: "It's economic activity."

Joseph RedCloud, Oceti Sakowin Tribal Utility Authority executive director, met last month with an aide to Pai to ask the agency to maintain intercarrier compensation for all traffic terminated by rural LECs. He told us recently that some tribal communities create jobs using cloud-based services because they lack resources to devote to facilities-based infrastructure, and punishing high-volume incoming call traffic could threaten carriers and other jobs in small communities. RedCloud said the new rules on access arbitrage would hurt Native American Telecom, a CLEC on tribal lands, which could lead to job loss and take away broadband access where there are no other options. In his statement, RedCloud called it "a travesty and an economic assault" to implement sweeping changes "in a historically swift manner." He recommended a gradual change over five years if the FCC does adopt the new rules.

Long-distance carriers including AT&T and Verizon met with commissioner aides in recent days to voice their support of the draft order taking on access stimulation. Sprint supports the order, too, and said it wouldn't object to waiver petitions with a 60-day opportunity for opposing comments. T-Mobile asked for clarity that "manipulating traffic flow to defeat the purpose of the 6:1 terminating-to-originating ratio will not be permitted."