If the Phone Doesn’t Ring, It’s Rural America
[imgbelt img=callchart.jpg]In trying to avoid fees that support rural phone service, communication companies have unintentionally created big headaches for rural residents getting calls from cities. Can the FCC help fix the problem, or will the U.S. phone system hang up on rural America?
This “rural call completion” problem, which also includes connections with very bad sound quality, is getting scrutiny from the Federal Communications Commission.
The problem “causes rural businesses to lose customers, cuts families off from their relatives in rural areas, and creates potential for dangerous delays in public safety communications in rural areas,” according to the FCC.
An Unexpected Bug As We Upgrade the Phone System
Where did this problem come from, and why does it keep getting worse despite recent efforts by the FCC and phone companies to address it?
The answer lies in the transition of the phone system from its traditional circuit-switched technology (called “time division multiplexing” or “TDM”) to a new technology based on Internet protocols (IP) called “voice over IP,” or just VOIP.
[imgcontainer left][img:phone3.jpg]The FCC has a way to track complaints about incomplete or poor-quality calls to rural communities. There's a "frequently asked questions"page and a form to report complaints.
To the extent most people have heard of VOIP, they know it as the technology that lets companies like Vonage and MagicJack replace your traditional phone with a broadband connection. But cable operators and other providers that offer what looks like traditional telephone service use the same VOIP technology. Recently, both AT&T and Verizon have announced plans to convert their existing traditional phone systems to VOIP. The FCC’s technical advisory committee has predicted that over 90% of the phone network will be VOIP by 2018, with less than 10% of the phone system using traditional TDM-based phone service.
Companies like VOIP for a lot of reasons. It’s cheaper to run and offers more services than a traditional TDM-based network. In addition, because the FCC does not regulate VOIP as a traditional telephone service, companies offering what looks like a traditional telephone service – but using VOIP instead – avoid many of the responsibilities and consumer protections that apply to traditional phone services. Many states have passed laws totally deregulating IP-based services and prohibiting state public utility commissions from regulating VOIP.
That’s a very attractive package for communications companies and encourages them to switch from traditional phone service to VOIP. But it also means that when problems like rural call completion come up, they can persist a long time before enough people notice to get the FCC involved. And even then, it’s not clear what the FCC should do – or legally can do – to fix the problem.
IP And Rural Call Completion
For 100 years, we have been committed to the concept that everyone in the United States is entitled to get phone service at an affordable rate, no matter where they live. Serving rural areas is much more expensive than serving urban areas, and rural networks have fewer subscribers to cover these costs. To make sure that rural areas can affordably support phone companies, the FCC set up a system of mandatory fees that urban networks pay to keep rural phone service viable. This includes requiring phone companies in urban areas to pay a “termination fee” and other forms of “access charges” to rural phone companies whenever someone on the urban phone network places a call to a rural phone network.
The result is that urban phone networks and urban subscribers subsidize rural phone service. In exchange we get a phone system that covers the entire country. This is one of the reasons our phone system has been the envy of the world and why nearly everyone in the country has a phone.
To make this subsidy system work, phone companies need to know where a call came from and what type of call it is so they can charge the right amount. In the old phone system, which uses fixed circuits, this is easy. But IP-based systems are designed to use many different routes to reach their destination. This is part of what makes them cheaper and more efficient than traditional phone systems. Also, unlike traditional phone service, where companies have to reveal their phone routes and their prices for routing traffic, IP-services are not regulated. Companies negotiate their own prices to handle phone calls, and these contracts usually prevent companies from sharing this information.
In the last several years, businesses called “least cost routing” companies have sprung up. These companies promise phone networks to find the least expensive way to route their phone calls. The phone companies themselves don’t know how the least cost routing companies are routing the phone calls. They just trust them to do it.
Since completing calls to rural areas is expensive, least cost routers generally try to find long, complicated routes that will minimize the termination fees and other charges by making the call look like it comes from someplace with lower fees. This introduces something called “latency.” The lengthy routes mess up the IP-based phone call, causing long breaks in the signal that the traditional phone network (operated by a rural phone company) interprets as dead air or a disconnect.
[imgcontainer left][img:level31.jpg]Level 3, a long distance carrier, has entered a settlement agreement with the FCC.