One of the items on tap for the FCC’s June 7 public meeting is a draft proposed rulemaking that addresses access arbitrage abuse of the intercarrier compensation (IC) system. The IC system is premised on the basic idea that rural local exchange carriers have small customer bases and correspondingly small amounts of per-minute traffic that are terminated on their networks. As the Commission’s proposal observes:
Access stimulation (also known as traffic pumping) occurs when a local exchange carrier (LEC) with relatively-high switched access rates enters into an arrangement to terminate calls—often in a remote area—for an entity with a high call volume operation, such as a chat line, adult entertainment calls, and “free” conference calls, collectively high call volume services.
Access stimulation thereby takes advantage of the IC system. Back in 2010, my blog post briefly explained: "FCC Needs Fast-Track Fix to Stop Traffic Pumping." The Commission made such fixes as part of its USF/ICC Transformation Order (2011). However, the Commission’s proposal points out that such arbitrage still takes place:
To circumvent the Commission’s rules, access-stimulating LECs have adjusted their practices, and now they support such services by interposing intermediate providers of switched access service not subject to the Commission’s existing access stimulation rules in the call route, thereby increasing the access charges interexchange carriers (IXCs) must pay.
The Commission’s draft proposal seeks “to eliminate financial incentives to engage in access stimulation.” This draft proposal seeks a worthy end in eliminating new access arbitrage methods, and the Commission should approve its release for public comment.
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