CTIA Sees Ia. Dispute Illustrating Need for Intercarrier Compensation Reform
Weighing in on a fight between rural carriers in Ia. and the Bells over alleged call blocking, CTIA said the ever nastier fight (CD April 20 p4) shows why broad intercarrier compensation reform is needed. In that rumpus, small carriers claim big carriers wrongly blocked calls to their subscribers. Big carriers allege rural local carriers are allying with service providers to stimulate high incoming traffic volume and increase terminating access revenue. The Ia. carriers want the FCC to take up the fight as a stand-alone item not tied to the broader intercarrier compensation fight.
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“The Iowa rural carriers’ ’traffic pumping’ schemes demonstrate how rural incumbent LECs can and do overcompensate themselves through the current intercarrier compensation system,” CTIA said. This embodies the dysfunctional, discriminatory and regressive intercarrier compensation regime” the group loathes, it said: “AT&T’s description of the alleged scheme demonstrates the avoidance and arbitrage behavior that results from disparate intercarrier charges based on artificial distinctions among different categories of traffic.”
The fight shows massive problems crying out for reform, CTIA said. “These claims highlight the continuing administrative and economic inefficiencies of the existing intercarrier compensation regime,” CTIA said: “They also highlight incentives and opportunities created under the current intercarrier compensation system for carriers to maximize intercarrier revenues and minimize intercarrier payments through various forms of self-help.”
Family values groups wrote the FCC urging a clampdown on traffic pumping practices they say some rural phone operators use to profit on porn. The letter cites Business Week, which said some rural carriers getting USF funds are “entering into business arrangements with chatrooms and ’sex line operators’ to increase phone traffic and their revenue in exchange for kicking back some of the new money to their partners… While this may line the pockets of a few, it comes at a hefty cost to society.”