Free Calling Adversaries to Battle at FCC
Adversaries in the free-call fracas are moving their dispute to the FCC. AT&T wants the agency to stop “traffic pumping scams.” Small LECs want the Commission to stop the big carriers from blocking their calls. The sides are setting up meetings with agency officials, the latest round in the rumpus between Ia.-based free calling services and major phone companies that say they're footing the bills through unusually high access charges. Rural LECs collect the access charges, passing part of the money to the calling services that spur phone calls through free conferencing, international calling and adult content.
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“Unscrupulous” rural LECs are violating Communications Act limits, causing network congestion and pocketing universal service subsidies as they rake in millions from the free call schemes, AT&T Exec. Vp James Cicconi told the FCC in a May 4 letter. Cicconi called it “disgraceful and offensive” that rural LECs keep getting the beleaguered Universal Service Fund’s money. “As more and more LECs enter into these schemes, the drain on the Universal Service Fund and those who must contribute to it will only increase,” Cicconi said.
AT&T asked for a meeting with commissioners “as soon as possible to discuss potential solutions to this urgent problem.” The company didn’t file a rulemaking petition, leaving the solution to the FCC. But it warned the agency that the “scams” probably will multiply because more rural LECs are expected this summer to quit an access charge pool run by the National Exchange Carrier Assn. (NECA) so they can earn higher access charges by allying with free-call services. The NECA pool sets access charge rates at about 2 cents a minute, but rural LECs partnering with free calling services charge 13 cents or more, AT&T said. Terminating access is charged, but some international calls aren’t ending up in Ia., instead being “merely routed through the traffic- pumping LECs’ exchanges,” Cicconi said.
Meanwhile, at least CEOs of 6 Ia. telecom companies, including CLEC Great Lakes Communication, will meet with FCC officials to enlist agency help in fighting call blocking by the big telecoms. AT&T Wireless/Cingular, Sprint and Qwest have blocked free-call numbers -- though AT&T recently eased up to focus attention on underlying regulatory issues. In a Wed. release Great Lakes said it has started a campaign “to spur state legislators, representatives in Congress, U.S. senators and… public interest groups to write the FCC commissioners to help them understand the severity and impact of this calling blocking on their constituents.”
The CEOs will meet April 18-20 with FCC commissioners and their staffs, said Washington attorney Jonathan Canis, who is representing them. “We're asking the Commission to take action similar to the Madison River case” when the FCC stepped in to stop Madison River Communications from blocking ports used for VoIP, Canis said. “Informal inquiries” were made to FCC staff but the only recourse offered was mediation, which the rural LECs spurned because it takes about 90 days, Canis said: “We need more immediate action.” Ia. LECs also have a suit pending in U.S. Dist. Court, N.Y.C., against AT&T for not paying access charges, he said: “It’s a classic bullying tactic. First they refuse to pay access charges and then they rachet it up to call blocking. Both of these self-help tactics have been deemed illegal.” Great Lakes Pres. Josh Nelson said the Bells have been withholding access charges since Nov.
Nonprofits rely on free conferencing services to reach volunteers, said Great Lakes. Frank Tamborello, co-chmn. of the Cal. Hunger Action Coalition, said blocking can impede his organization’s planning for Hunger Action Day, May 8. “We were recently blocked when a group of members… scheduled a call but half the callers were unable to access it,” he said: “These moves by the large carriers are appalling.” Great Lakes’ “conference calling business model is straightforward -- we partner with conference calling companies that bring us the customers and we, in turn, supply the communications and pay them a marketing fee for their service,” Nelson said: “As a small Iowa-based telephone company, we know how important it is to stand up for the ‘little guy,’ or, in this case, the non-profit organizations, universities, religious groups and small businesses that… rely upon our free conferencing partners for their communications.”
AT&T’s Cicconi said the calls aren’t “free” but are paid for by big companies and their customers. If the schemes continue, AT&T alone will pay about $250 million in extra access charges this year, he said. AT&T and others have sued the rural LECs, “but given the ease with which these schemes are implemented and shifted rapidly to other locations, it is clear that after-the-fact, case-by-case litigation could never fully protect the public interest,” Cicconi told the FCC. The free-call trend is spreading beyond Ia. to S.D., Minn. and elsewhere, he said. “Our issue was never with our customers but with the unscrupulous carriers and the services they fund through unlawful kickbacks of artificially inflated access charges,” said an AT&T spokesman.