Least-Cost Routing Threatens Rural Phone Call Completion 205
New submitter kybred writes "Rural landline users are increasingly having problems with incoming calls not completing or being dropped. The culprit may be the bargain long distance carriers penchant for 'least cost routing' combined with the conversion of the Universal Service Fund to the Connect America Fund. From the Fine Article: 'Rural phone companies are the victim here," Steve Head says. "They charge a higher rate to terminate calls as it costs more for them. Shoreham Tel gets beat up because everyone calls them and says something is wrong with your system, but it's not. We've been through all of their lines and equipment and there is nothing wrong with it; it's the least-cost routing carriers.'"
Side-effect of ending traffic pumping? (Score:5, Informative)
Re:to be expected (Score:5, Informative)
Actually, they do. In return, they get things like rights-of-way for running their lines and placing their equipment in areas which are highly profitable.
The telcos have no right to make use of public resources to simply "skim the cream."
Re:to be expected (Score:4, Informative)
You're missing the point. These people HAVE phone service, but due to the way phone companies share the money that the calling customers pay for a call across networks, some inbound calls do not connect. When you pay your phone company to call someone on another network, your phone company pays that other network to connect the call. Phone companies charge different rates for that. When there's a mismatch between what the originating network expects to pay and what the terminating network asks, then the call is dropped somewhere along the line where a least cost long distance provider decides that the pay is not enough to cover the costs and render a profit. The callee never knows and the caller just experiences a call not going through.
Yup - That's Us (Score:5, Informative)
I live in southwest Montana and we're serviced by a rural telephone co-op. I work in Big Sky, Montana, and you might recognize that name because it's one of the biggest ski resorts in the country. This problem didn't really exist three years ago and has increased significantly in just the past year. For those of you unfamiliar with rural telephone co-ops, here's a smattering of what it's like.. because it's QUITE different than dealing with carriers or even your local CLEC:
1. Rural telephone co-ops are exempt from the 1995 Telecommunications Act. That means all sorts of things, one of which was they were until very recently exempt from providing E911 service. (This is something your local PSAP probably takes for granted. We're about 15 years behind the times.)
2. We can't call a lot of Google Voice numbers. I'm not sure why. Possibly it's because the local co-op has a problem with their dial plan settings, that happens. However, some Google Voice numbers do work. It's just weird.
3. There's a lot of companies that provide hosted toll free numbers and provide both ACD-like services as well as collecting ANI so you can run all kinds of nice reports. We use services like that and increasingly we've run into a lot of problems because sometimes they outright can't transfer calls to our local DID's. Typically those kind of companies use cheapo LD carriers, but they also usually have a few PRI's with major carriers like AT&T. We usually have to request they change their default routing to use one of those carriers instead.
4. On the flipside, we have surprisingly good Internet service. Three years ago we put in a 50x5Mbps connection and this year we augmented it with a 26x1. All of that service costs us $500 a month. That's not as spectacular of a deal as it was 3 years ago, but considering where we are, it's pretty impressive. At home, I've got fiber to our house - not bad for a community of 838 people.
Re:RURAL MEANS THE BOONIES !! (Score:4, Informative)
No internet in the boonies, so how you expecting skype to work? magical skype dust?
The ONLY option for broadband for most rural people is satellite internet. and upload is typically isdn speeds AND you have a minimum of 3000ms latency. which blows to hell skype calls.
Re:"Free" market fail (Score:4, Informative)
You can't just telll the LD carriers "you must complete this call" if doing so costs them more than they charge.
The long distance carriers should take "you must complete this call" into account when setting their price.
Likewise, the small rural phone companies must receive enough revenue to maintain their operation.
Currently high fixed costs of maintaining the infrastructure are covered by higher per-call costs instead of higher monthly fees. Of course higher monthly fees won't be popular with people living in rural areas, but it would more accurately reflect the actual costs.
The only way this is going to get fixed is if sane regulation is brought to bear.
According to the article, there is regulation on paper but it is not enforced.
RTFA (Score:3, Informative)
The rural areas already have service installed and wire/firbe pulled to their homes. They have no need for federal assistance and who they voted for has NOTHING to do with this. (Can we please get past this election stupidity.)
The issue is that because the routes to rural services cost more, many carriers and long distance providers will not route calls to them. That means that when Jr. moves to NYC and leaves Granny in BFE, Jr. can't call Granny. She has service and she can call him in NYC, but Verizon or L3 doesn't route calls back to BFE because they deem the route cost too high.
There are two appropriate solutions:
1. Verizon eats the higher cost of the route. They "lose" money and won;t do that.
2. Verizon passes the higher charges onto the customer. That's "hard" and since the customer is on a "Free Nationwide Long Distance Plan" they are likely to take issue if Verizon charges them extra.
Re:to be expected (Score:5, Informative)
Yes, and the more that the farmers have to pay for communications, the more they'll have to charge you for food.
They already charge me for food. You mean charge more, I assume, but I'm fine with that. Even if we want to help some people who can't afford food, it's much saner to subsidize that (possibly with food stamps) than doing a crazy scheme of indirectly taxing and subsidizing everyone.
The Internet is not a luxury for farmers these days any more than it is for any other business. We're constantly being bombarded with news stories about how, by virtue of various data services farmers make themselves more productive.
Great! If it makes them more productive, that just means it actually costs them less.
One way or another, however, you - the farm products consumer - end up footing the bill for it. The question is, do you want farmers to have to pay for their data services at retail rates, one farm at a time, or wholesale rates, through some sort of organization?
However they want, I don't presume to decide for them. Farmers are not children, and they are much more informed than me about their local rates and whether it'd make sense or not to form a co-op.
Re:Side-effect of ending traffic pumping? (Score:5, Informative)
These rural phone companies also host free teleconfrence centers and chat lines. The goal is to have lots of callers with lots of time on the service. Many phone companies don't like the heavy drain of money to fund these free services. Low cost and free phone services are the first to pull the plug. Alternative phone services simply refuse to pay termination fees for low cost or free phone services to those rural companies. If you want to see this first hand, use Google Voice and call a free confrence room hosted in Iowa. It won't go through. Most VOIP servies block this money hole. ATT tried to block or charge LD fees to call these services, but the court blocked them.
http://www.techdirt.com/articles/20090925/1607516327.shtml [techdirt.com]
Re:Pay for your own infrastructure (Score:4, Informative)
No, he's just pointing out that they're hypocrites.
Re:RURAL MEANS THE BOONIES !! (Score:5, Informative)
They don't have to. You and I are paying for it with the Universal Service Fund, or Connect America Fund, as TIL it's called. The carriers are trying to increase profits by making that fund a profit, instead of using it for what it was originally designed for - to bring affordable phone service to those living out in rural areas. To me, this should be handled the same as a tax evasion or fraud case. It is a government enforced "tax" after all, and if one penny of that fund goes to anything other than to provide service to the rural community, someone should go to jail.
Lets just get over the fact that there is going to be a profit, OK?
Nobody builds a telephone company to break even or run at a loss. Get over it.
You are basically saying that these rural phone companies can't take any profit unless they forego the fund.
The fund is there to level the playing field so that rural customers can afford telephone service, because without it the customer to infrastructure ratio would make it unprofitable to provide service at all. The fund is there PRECISELY to make it possible to provide the service to these areas AND a profit to the phone company owners. It is working as intended.
Universal Service Fund isn't even directly involved here.
I suggest you RTFA again.
Least-cost routing can lead to dropped calls. What happens essentially is when one dials into Shoreham the call may be routed through, for instance, an ATT router, and is then handed off to one of the hundreds of discount long-distance carriers. When this carrier’s computers quickly calculate that the call is a money loser because Shoreham Tel is allowed to charge a fraction more to access its lines, the secondary carrier simply drops the call.
The problem is unscrupulous call routing services that do not fulfill their contractual obligation to route the call if the only route available has a slightly higher cost.
They simply drop the call, and notify the carrier that the call ended. (They lie).
These call routing services are middle men, responsible only to the carriers with which they contract. They are virtually unregulated.
This is strictly a contract law problem. The big carriers need to hold those call routing services feet to the fire, or use their own call routing facilities.
Re:RURAL MEANS THE BOONIES !! (Score:5, Informative)
I'm currently a member of an electric cooperative and it does all of those things you imply are the sole province of for-profit organizations. It maintains a capital fund for operations, maintenance, replacement, and expansion. Nobody pays dues. We pay our electric bill. The bill is itemized with two items: the actual cost of the electricity we consume, and a daily availability fee that maintains that capital fund and pays for the employees and plant. I pay 1/3rd to as little as 1/4th what people a mile away from me who fall in the for-profit electric company's operating area pay, and I get MORE reliable service. This is not a made-up claim from my co-op, either. This is statistics from the state PUC.
The co-op is 71 years old and has better plant than the for-profit company in the region. If state law could be changed to allow the co-op to enter incorporated cities, the for-profit company would very likely go out of business in the state. The for-profit company lobbies heavily on a constant basis to prevent just that.
Nor is the co-op small. It collects just over $100 million in revenue annually.
Yes the co-op has debt. It's long term debt commensurate with the size of the organization, and the rates are far from usurious. The co-op has an excellent credit rating. Having and servicing such debt is a normal business practice and the co-op does it for the same reason a business does: it benefits the co-op. In truth, the balance sheet looks quite similar to a for-profit corporation of similar size, with the exception that there is no line item labeled Net Profit. There is nothing wrong with charging money to provide service, maintain standards, expand as needed, and generally take care of business. The co-op intentionally charges a little more than required to maintain the capital fund, then five years down the road, pays out capital fund refunds of the overage to its owners: me and my neighbors.
I suppose, once upon a time, paying the initial investors had a place in the balance sheet. They don't anymore. The co-op can pay off initial investors, instead of forever having a vampire sucking money out of its balance sheets at my expense. There is no small, privileged group of investors who get to pull money out of the organization just because they had money 70 years ago. More to the point, there is no small, privileged group of investors with voting control of stock who gets to fuck up the organization and its service for their sole short-term financial benefit. Everything is wrong with "making money" on utilities, water, electric or indeed, telecommunications, and that last is one of the main reasons applicable today.
There are co-ops and then there are co-ops. A co-op with correctly written bylaws is incredibly robust. Non-profits are neither simplistic nor short sighted when set up properly and run well.