FCC Proposes Rule Clarifications to Stop Gaming of the Access Charge System

On July 14, the FCC voted to adopt a Notice of Proposed Rulemaking to address a new form of access stimulation arbitrage of the intercarrier compensation system that allegedly involves involving call flow IP enabled (IPES) Providers. 

Access charges are a vestige of the legacy intercarrier compensation system. As the Commission's Notice points out, access charges were intended to compensate carriers for use of their networks by other carriers. Although the rates were once cost-based and tied to normal call traffic volumes, they have since been capped. Some local carriers have exploited this by artificially stimulating terminating calls through arrangements with high-volume calling services such as "free" conference calling services and chat lines. According to the Notice, the resulting high call volumes generate revenues far in excess of costs that the access charges were designed to cover.

In its 2011 USF/ICC Transformation Order, the Commission adopted rules to stop the problem of access stimulation (also called "traffic pumping") for those terminating tandem switching and transport services that have not transitioned to bill-and-keep. (The problem was subject of a December 2010 blog post). And in 2019, the Commission updated those rules to prevent new arbitrager tactics. The update to those rules was upheld by the D.C. Circuit in 2021.

Based on input from interexchange carriers (IXCs), the Commission's Notice suggests the rules need to be clarified once more to prohibit new forms of access stimulation involving call flow IP enabled (IPES) Providers. Apparently, some IPES Providers have claimed that the Commission's Access Stimulation Rules do not apply to voice traffic that terminates to "IPES numbers." 

 

To address this apparent problem, the Commission's Notice states: 

[W]e propose that when traffic is delivered to an IPES Provider by a LEC or an Intermediate Access Provider and the terminating-to-originating traffic ratios of the IPES Provider exceed the triggers in the Access Stimulation Rules, the IPES Provider will be deemed to be engaged in access stimulation. In such cases, we propose that the Intermediate Access Provider would be prohibited from imposing tariffed terminating tandem switching and transport access charges on IXCs sending traffic to the IPES Provider or the IPES Provider’s end-user customer. 

To be sure, access stimulation is a complicated and even arcane subject. But there is no justification for gaming the intercarrier compensation system and sticking interexchange carriers with bogus charges. If IPES Provider-related arbitrage is taking place as alleged, then some kind of clarification of the rules by the Commission is in order. To that end, the Commission's vote to approve the Notice makes good sense.