The National Broadband Plan and Its Effect on Intercarrier Compensation

The details of the FCC’s National Broadband Plan have been, for the most part, widely reported since its release in mid-March. But one part of the plan of critical importance to many Tele-Tech customers has garnered little media attention. The broadband plan calls for the elimination of per-minute intercarrier compensation (ICC) charges over a ten-year period.

Most would agree that the current system is unsustainable. The reduction in the number of minutes, arbitrage in the form of phantom traffic and traffic pumping, and the financial incentive to force IP traffic onto the Public Switched Telephone Network (PSTN) to collect access charges all lead to a system that is in need of improvement. The National Broadband Plan addresses these issues and presents a plan for reform.

In the plan, the FCC recommends a three-stage “glide path” that eliminates per-minute ICC charges within ten years and establishes interim solutions to taper arbitrage created by the inadequacies of the current system.

Stage one, which takes place in 2010 and 2011, is the planning period. During this period, the FCC expects to adopt a framework for long-term ICC reform that gradually lowers per minute rates until they hit zero.

During stage one, the FCC also recommends the development of interim rules to reduce arbitrage. As an example, the FCC mentions the possibilities of prohibiting carriers from masking or stripping information necessary for billing, and adopting rules to reduce access stimulation, also known as traffic pumping. No additional detail is included on how the FCC plans to prohibit these activities. Further, the plan calls for the FCC to address ICC rules related to VoIP traffic.

Stage two, taking place from 2012–2016, is when the reforms adopted during stage one will be implemented. Carriers’ intrastate terminating switched access rates, the highest of rates under the current regime, will be gradually reduced to a level equal to the current interstate terminating switched access rates over a period of two to four years. This can mean a 65% to 80% drop in per-minute charges for intrastate switched access depending on the type of carrier. After the intrastate rates have been reduced to interstate levels, the FCC could reduce interstate rates to reciprocal compensation rate levels. This is expected to result in equal per-minute terminating rates for all carriers.

Stage three takes place from 2017-2020. In this final stage, the plans expects that the “elimination of per-minute above-cost charges should encourage carriers to negotiate alternative compensation arrangements for the transport and termination of voice and data traffic.”

ICC is a major revenue stream for many carriers, particularly those serving rural areas. As per-minute ICC charges are phased out, the FCC plans to offset this revenue loss by allowing gradual increases in the subscriber line charge (SLC). And, federal subsidies will remain available under the newly created Connect America Fund (CAF). The plan states, “When calculating support levels under the new CAF, the FCC could impute residential local rates that meet an established benchmark. Doing so would encourage carriers and states to ‘rebalance’ rates to move away from artificially low $8 - $12 residential rates that represent old implicit subsidies to levels that are more consistent with cost.”

As we’ve seen in previous attempts to reform ICC, any plan is likely to be challenged. This time, the FCC recommends, within the plan, that Congress could amend the Communications Act to make the FCC’s authority to reform ICC explicit, which could reduce some of the legal challenges to the FCC’s planned actions.

We want to hear your thoughts on the FCC’s ICC reform plan. Please join the conversation and let us know what you think!

NANPA Annual Report

The 2009 NANPA Annual Report is now available and may be accessed under the "Reports" option of NANPA’s website homepage (www.nanpa.com).

Okay - so we're not perfect!

That’s right, sadly, our twenty-six months of 100% accuracy has come to an end. Now, I have to say, I’m still unbelievably proud that Tele-Tech achieved such a phenomenal milestone – and, I thank our team for all their efforts.

So - now we start again! A new challenge is on the horizon. Can we meet – even beat – our two-year record? Our path to perfection (again) begins; and, in doing so, we’ll take pause to examine what errors were found and how they occurred. This is what we’ve discovered thus far:

• We found errors in our data for Extended Local Calling (ELC) exchanges in Texas. Here’s what happened – we pull ELC exchange information from the Texas Public Utilities Commission; and, unfortunately, the TX PUC didn't update the spreadsheet with a few specific exchanges, and a tariff update is not generally issued for the additional of a few ELC exchanges. The result is that we were not aware these ELCs were local until CenturyTel and Embarq merged and the new company, CenturyLink issued a new tariff on 1-1-10., The new tariff included the ELC exchanges in question. Since this discovery, we have been evaluating comparison tools and will incorporate the most effective in a filtering process to identify changes within new tariff documents.
• An error in an extended metro calling area was not discovered during our normal internal verification process, and was therefore released to our live data set. Because we feel this instance to be a bit uncharacteristic, we find it a good example to incorporate into our mock calling area exercises for Tele-Tech researchers. Certainly, we hope to use this error as a learning experience; but, to ensure it doesn’t happen again, we have also implemented additional verification procedures.
• Finally, errors were made because of a cross-state border exchange. Essentially, there is a Virgilina, VA, and a Virgilina, NC, with the same coordinates. Erroneously, we did not include Virgilina, NC, in the local calling areas for rate centers that included Virgilina, VA, as local calls. We are making both programming and reporting changes that will alert when there are rate centers with the same coordinates (but not included in the same calling area).

Now, we often reference our "Quality Story", and I’ll do so again by saying… we have a sincere believe in conducting a full examination of errors made! And, especially after going so long without any errors – we really wanted to get to the source of those recently discovered to ensure we put precautionary steps in place preventing reoccurrence. So…. we pulled that swinging spotlight out and we’re rotating our employees under the glare – kidding! BUT, we’re not kidding about our committed belief that examining errors is our best teacher in allowing us to determine how the error happened -- and, how to adjust our processes and/or software so that the same type of error cannot happen again.

So, we’re no longer at 100% perfect accuracy – but, we enjoyed the ride so much, we’re determined to take it again! And – as we say in our 12-step program for addiction to data quality, we strive to make successful processes repeatable…. so, we start anew, with our twenty-four month accuracy rating now at 99.94%.

Nebraska 308 Rate Center Consolidations

Update information received from NANPA on 3/15/10, is pasted below:
"Per the direction of the Nebraska Public Service Commission, Commission Order 4246, the following rate center consolidations will take place effective June 15, 2010. The HYANNIS, ARTHUR, ASHBY, BINGHAM and WHITMAN rate centers will be consolidated under the HYANNIS rate center. The MERNA and ANSELMO rate centers will be consolidated under the MERNA rate center. The THEDFORD, BREWSTER, BROWNLEE, DUNNING, HALSEY, PURDUM and SENECA rate centers will be consolidated under the THEDFORD rate center. "

NANPA Planning Letter (PL) 404 - Sint Maarten, Netherlands Antilles - 721 NPA Delay

The Government of St. Maarten, NA, has requested a delay for the introduction of the 721 NPA. Previously, PL 396 outlined a timeline targeting 5/31/10 for this introduction, but no current information is available regarding a new implementation schedule. For more information, please visit www.nanpa.com.

NANPA Planning Letter (PL) Number 403 - Oklahoma - NPA 539 to Overlay NPA 918

The Oklahoma Corporation Commission approved an all services overlay as the relief method for the 918 NPA area on 1/4/10. The new 539 NPA will serve the same eastern portion of the state currently covered by the 918 NPA (including communities such Bartlesville, Clayton, Cushing, Fairfax, McAlester, Miami, Muskogee, Okemah, Poteau, Sallisaw, Tahlequah and Tulsa). The overlay timeline was identified as:

• 08/07/10 – Start of Permissive 10-Digit Dialing
• 10/01/10 – Earliest Date to Order Central Office Codes in New 539 NPA
• 03/05/11 – End of Permissive Dialing and Start of Mandatory 10-Digit Dialing
• 04/01/11 – Earliest New NPA Central Office Code Activation date; and, Effective Date of the New 539 NPA

Although subscribers may use either seven- or 10-digit dialing for local calls within the overlay area during the permissive dialing period, 10-digit dialing is encouraged. Additionally, when preparing for overlay area code relief, carriers are strongly encouraged to prepare their switches to begin sending 10-digits prior to the mandatory 10-digit dialing conversion date for customers.

The dialing for both 918 and 539 NPAs will be as follows:
~ Local Home NPA (HNPA) or Foreign NPA (FNPA) Call … 10-Digits (NPA-NXX-XXXX)
~ Toll HPNA or FNPA Call … 1+ 10-Digits (1+ NPA-NXX-XXXX)
~ Operator Services HNPA or FNPA Call … 0+ 10-Digits (0+ NPA-NXX-XXXX)

International and domestic carriers should ensure network-wide activation of the new 539 NPA prior to 4/1/11. Verification of proper routing may be tested from 1/4/11 through 5/2/11 by dialing 539-539-1539. For additional information, visit www.nanpa.com.

Georgia 678 NPA-NXX Codes Exhausted

On 2/26/10, NANPA announced that all assignable NXX codes in the Georgia 678 NPA have been utilized. As such, service providers may now request NXX codes in the Georgia 470 overlay NPA code.