8YY Access Charge Reform NPRM Presentation by Inteliquent, Inc. (WC - - PowerPoint PPT Presentation

8YY Access Charge Reform NPRM

Presentation by Inteliquent, Inc. (WC Docket Nos. 18-155; 18-156) January 27, 2020

Relationship of Recent FCC Actions to 8YY Access Charges

Access Arbitrage Order established cost-shifting principle for “free” traffic

• Cost-shifting principle
• Party stimulating allegedly “free” calls should bear terminating access charges
• 8XX service likewise is a "free" number assigned to an enterprise or end-user account, and

provision of a "toll-free” number “stimulates” calls

• Initial impact of new rules, from Inteliquent’s observation of traffic flows:
• No reduction in MOU, but traffic is shifting from multiple rural CLECs to a limited number of

rural CLECs and IPES providers

• Rural CLECs previously identified as access stimulators and still receiving traffic appear to be

claiming they are outside the scope of access stimulation rules

• If calls are terminating to entities outside the scope of the rules, the overall cost of delivering

access stimulated traffic is currently unchanged

• Impact on 8YY
• Current FCC policy is consistent: whether 8YY or “free” conferencing calls, party stimulating the

call should bear cost of access charges; a change to this paradigm would be inconsistent with the access arbitrage reform

• Further data on impact of access arbitrage reforms during 2020 could inform 8YY

policymaking, as both proceedings focus on alleged ICC abuses

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Relationship of Recent FCC Actions to 8YY Access Charges (cont…)

In December 2019, the FCC approved a new VoIP Symmetry Declaratory Order. This recently approved Order clarified how a LEC can charge for 8YY access functions performed by it or its VoIP Provider Partner. The impact on originating access charges is expected to be meaningful.

• The Declaratory Order essentially impacts originating access charges. Guidance on charges:
• If providing facility to premises, end office switching
• If not providing facility to premise, tandem rate
• The LEC can charge for the functions it or the VoIP Provider Partner actually perform (or

the functionally equivalent service)

• Impact on 8YY
• This new Order has been in effect for less than two months
• This change impacts VoIP providers, one of the largest and fastest growing end user

segments

• Likely will dramatically decrease 8YY access charges for iVoIP calls by ~ 50%
• Full scope of cost reduction will become clearer as the year progresses

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Relationship of Recent FCC Actions to 8YY Access Charges (cont…)

The FCC is facilitating and championing STIR/SHAKEN, now against the backdrop of statutory deadlines. Timeline

• TRACED Act establishes defined timeline for implementation of STIR/SHAKEN, including

key date of June 30, 2021 Impact on 8YY:

• STIR/SHAKEN will improve detection and deterrence of spoofed calls, which is a known

source of fraudulent toll-free traffic pumping.

• By facilitating detection of spoofing, will assist authorities in targeting any remaining toll-

free traffic pumping operations for prosecution Conclusion: Access arbitrage rules, the VoIP Symmetry Declaratory Order, and STIR/SHAKEN implementation will have significant impacts on industry and practices in the 8YY space. The FCC should evaluate these impacts carefully before changing 8YY access charge rules.

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8YY Reform Proposals

If FCC nevertheless moves forward with 8YY rule changes in the near-term, it should: Adopt the weighted national average tandem switching rate of $0.0017, exclusive of nonrecurring and recurring interconnection charges. Adopt national rate for 8YY originating end office charges. In the event FCC lowers rate below national average, any reduction should occur in a transition of at least four years. The final rate should not be lower than the benchmarked tandem rate. Cap database query charges at the national weighted average and limit the number of dip charges to one per call.

• Database query charges should be set at the national weighted average rate of

$0.004248 per query, as calculated by Inteliquent and referenced in the 8YY FNPRM.

• Any lower rate should be phased in during a transition of at least four years.

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Q& A

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