Least-Cost Routing Threatens Rural Phone Call Completion

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.'"

Comments

RURAL MEANS THE BOONIES !!

[Anonymous Coward]

So what did they expect ??

Re:RURAL MEANS THE BOONIES !!

[Anonymous Coward]

They expect to receive the service they paid for. Same as those living in the middle of a 5 mil+ city.

If the company can't provide them with the service, they shouldn't have sold it. I doubt on their contract says anywhere that X% of the calls will be randomly dropped.

I see one solution for them, for those companies I mean. Skype or something similar. Calls anywhere in the world for a flat fee. Bypass those "carriers" entirely.

Re:RURAL MEANS THE BOONIES !!

[Lumpy]

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:RURAL MEANS THE BOONIES !!

[Cyberax]

So are they going to PAY for the service? The real price, not the subsidized cost. No?

Thought so.

Re:RURAL MEANS THE BOONIES !!

[K. S. Kyosuke]

I have a suspicion that if everyone had to do that, many people would be in for a nasty surprise.

Re:RURAL MEANS THE BOONIES !!

[bjwest]

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.

Re:RURAL MEANS THE BOONIES !!

[amorsen]

If the company can't provide them with the service, they shouldn't have sold it.

The company is providing perfect service. Outgoing calls are working great.

Incoming calls, however, are not reaching the company. There is nothing the company can do about that.

The reason for the problem is that providers get money for handling incoming calls, and rural telecoms get more (they have more infrastructure to maintain per billed minute). Regular customers tend to pay the same price to call all of the US, and so the cheaper providers end up actually losing money on calls to rural areas. Therefore (some of) the other providers do everything in their power to avoid that cost, including dropping expensive calls on the floor or degrading quality, in the hope that the caller will either switch to a cell phone or that the two ends will decide to reestablish the call in the other direction. Incoming calls are practically always profitable.

Re:RURAL MEANS THE BOONIES !!

[icebike]

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 !!

[Areyoukiddingme]

While you are otherwise correct, I do have to complain about one thing you said.

Nobody builds a telephone company to break even or run at a loss. Get over it.

Yes they do. It's called a cooperative. It's legally (and actually) a non-profit. They're relatively common in the rural southwest, because even with the USF, it was impossible to attract a for-profit carrier to the region. I still have my membership certificate for one in Texas I used for a while.

Personally I think all utilities should be run as co-ops. Extracting a profit for a life-essential service like water is wrong. Fortunately most states still have avid Public Utilities Commissions that strongly regulate water utilities, but all it would take is some asshole shouting "deregulate" long enough and that could change. And that would be unfortunate.

Re:RURAL MEANS THE BOONIES !!

[bjwest]

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.

I have no problem with them making profit, that's what the monthly fees are for. The USF is for building and maintaining the infrastructure, or helping to build and maintain it - it should not be used to pay for that infrastructure building and maintenance in full. Nor should the USF in any way be used to pay anyone's salary, other than those maintaining the lines and poles, and again, not in full. It's supposed to help not provide.

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.

I suggest you RTFA again.

Yes, I got off into a tangent on the USF usage. I don't believe anyone should be made to lose money providing a service. They should be allowed to charge a bit more for that call, informing the caller beforehand that it will cost a penny or two more per minute for this call, allowing them to terminate if they wish. This will, of course, have to be watched, otherwise you'll have the phone companys adding on a charge even when it wouldn't over-cost them.

Re:RURAL MEANS THE BOONIES !!

[icebike]

Cooperatives generally don't make a good business model, except among relatively small groups of co-dependent people. They succumb too easily to the "Tragedy of the Commons", neglect, and resistance of the membership to new investment. Too often the turn into declining organizations, with disintegrating physical plant, due to neglect or under-funding, and most end up being sold to some for-profit company.

But even co-ops have to find investors to fund new infrastructure. You can't wait till everyone in the community ponies up their dues when the main water pump dies. So they borrow money, usually at usurious rates, and externalize the profit to the banks.

Its a myth that co-ops don't seek profits. They do, but not for themselves or the membership, they just hand all profits to some one else.

There is nothing wrong with making money on water utilities, It guarantees there will be interest and funds available to keep the system up to standards, expand as needed, pay the initial investors, and generally take care of business.

Don't fear profit. Doing so is simplistic and short sighted.

Re:RURAL MEANS THE BOONIES !!

[Darinbob]

One of the conditions given to AT&T before they were granted a monopoly was to provide universal service. Now that pure market forces are in place instead, that goal is dropped. It won't be just rural areas, what about dropped lines in poor areas of cities.

Re:RURAL MEANS THE BOONIES !!

[icebike]

I have no problem with them making profit, that's what the monthly fees are for.

Well, that's not how I read your prior post where you said: The carriers are trying to increase profits by making that fund a profit,

By and large the carriers don't benefit much from USF. Over all, they are net PAYERS. Its the small local/rural phone companies that receive this money, as well as schools, hospitals, and the poor (via government subsidized life line service connections. (And, ...running and ducking... Obama Phones).

You said:

The USF is for building and maintaining the infrastructure, or helping to build and maintain it - it should not be used to pay for that infrastructure building and maintenance in full. Nor should the USF in any way be used to pay anyone's salary, other than those maintaining the lines and poles, and again, not in full. It's supposed to help not provide.

Check again what the Goals of the USF are.
Offsetting higher operational costs, including salary, are certainly a central part of those goals.
Quoting linked article:
       

advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas

Profit is merely one component of costs. Its the cost of borrowing money. The fund was never envisioned as only providing initial investment for infrastructure. It Always had the goal of supporting operational costs.

As for your idea of charging a bit more for calls into such regions, NO, this was a conscious decision that we as a society made when the USF was set up. We chose, wisely or unwisely, to level the playing field with respect to communications cost. Undoing that now would return us to the 1940's where the cost of a call to a town 40 miles away could exceed the cost of a call across country. What we have now allows local and long distance prices to be so cheap that its not worth the phone company even billing for it any more.

In a perfectly free market driven society, differing fees would be the normal expectation. But telephone services, rural electrification, water, sewer, have never lent themselves to a competitive free market model. (Even if they did, nobody wants six water companies and four phone companies trenching through neighborhoods simply to provide competition.) We, as a society, devised other means to substitute for the lack of competition as a means of regulating profit. Public Utility Commissions are the result where pure market economics don't quite fit easily.

Re:RURAL MEANS THE BOONIES !!

[Areyoukiddingme]

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.

Re:RURAL MEANS THE BOONIES !!

[Qzukk]

If the company can't provide them with the service, they shouldn't have sold it

The company is providing the service just fine. It's the other companies' faults that they don't want to let calls go through to this company.

Reminds me a whole lot about the whole network neutrality thing. If Ed Whitacre was still at SBC/AT&T, I'd expect the next thing we see would be an article from him about how these rural people shouldn't get to use his networks for free.

Re:RURAL MEANS THE BOONIES !!

[clm1970]

Everything old is new again. 100 years ago give or take these rural phone companies were born out of the fact that these towns were "forgotten" by the growing carriers. Seems to be history repeating itself in that they get the sloppy seconds.

Re:RURAL MEANS THE BOONIES !!

[Rich0]

Agreed. This is hardly the first time that the phone system has had a dumb regulator-imposed pricing system imposed. Often they're lobbied for by phone companies leveraging for an advantage, and sometimes it backfires. In this case rural companies diminish the value of their service by getting the ability to charge more to terminate calls, thus causing other companies to refuse to do business with them.

A previous example that comes to mind also involved termination fees - when competitive local carriers started to take off the big phone companies lobbied for the ability to charge to terminate local calls, figuring that since they had most of the numbers they'd collect most of the fees. Then competitive companies started contracting with ISPs to give really cheap incoming-only lines for modem banks, and started billing the major carriers for tons of fees.

It seems like passing along costs is the fairest option. Either let rural consumers pay more to bear the costs, or let those calling them pay more to reach them.

Re:RURAL MEANS THE BOONIES !!

[cheater512]

Err isn't the entire point of the subsidized cost to make it affordable in rural areas?

Re:RURAL MEANS THE BOONIES !!

[icebike]

Credit Unions are another obvious example.

But you have to admit, You are also in the distinct minority.

As I said, "Cooperatives generally don't make a good business model,".

That you can find an example of some that do only proves the rule.
It is still unusual to find the co-op model in vary many medium to large scale industrial undertakings.

Re:RURAL MEANS THE BOONIES !!

[jbo5112]

The rural company has it's hands tied by the US Government to offer a certain quality of service for a reasonable price. A big part of the problem is that some of the least cost routing companies are illegally routing the more expensive intrastate (within the state) long distance calls out of state, and creating new interstate calls using VoIP. The interstate calls are governed by the Federal government and have to be billed at a lower rate. There's enough evidence to see that it's happening but enough for a court case, and very few companies can do the data analysis, even if they had the data.

Further complicating the issue, most places the rural companies are connecting up to equipment owned by the big players, who are the ones profiting from the lawbreaking least cost routing companies. The one or two states where it's owned collectively by the rural companies, the public utilities commission and whoever else would be involved, don't care enough to pursue the issue.

Re:RURAL MEANS THE BOONIES !!

[jbo5112]

A lot of rural phone companies have gotten government subsidies to build out broadband service. It may not be available in the boonies yet, but the nearby villages have it. The goal is to get broadband to everyone eventually (government's version of ASAP), so we can get rid of the old, expensive behemoth of the telephone network. Paying to run room size computer/electronic systems to route calls for 1000 people seems a little foolish in 2012, when the possible traffic would fit on a 100Mbit duplex ethernet. You can also run VoIP using 3G broadband, where available. I've never tried on anything slower, but 2.5G well exceeds the 8kbps (each direction) that VoIP can be compressed to, as does good dial-up.

Fixed line broadband penetration map from end of 2010: http://virulentwordofmouse.files.wordpress.com/2011/10/broadband-us-map2.jpg

Re:RURAL MEANS THE BOONIES !!

[ApplePy]

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.

Not necessarily. I was in a small town (~500 pop.) in the middle of nowhere not long ago, where the local telco provides 15Mbps synchronous 'fiber-to-the-farm' for cheaper than my metro-area 6/1.5 cable. I'm jealous.

Return it to Public Infrastructure

[Herkum01]

I had to deal with this in our corporate PBX, we connect to a provider who does god-knows-what with the call. They do this least-cost routing, but when the call does not arrive it is on the customer to figure out WTF is going on. The provider saves .01 cents on your phone call and the customer pays for the call AND the support! What a way to run a business.

Re:Return it to Public Infrastructure

[PlusFiveTroll]

It's up to the customer(s) to get together and test the different phone services that are doing this and make a detailed case to the FCC and FTC. If a irrefutable case can be made, one of the above organizations will fine the telco in question, hopefully for a large enough amount the telco decides it's not worth it.

Anyway, if you think this is happening complain to the FCC.

Re:Return it to Public Infrastructure

[TheRedSeven]

So if that provider is Verizon, and they save the .01 cents say, 100,000,000 times, that means they're saving about $1,000,000.00. Right?

Re:Return it to Public Infrastructure

[icebike]

So if that provider is Verizon, and they save the .01 cents say, 100,000,000 times, that means they're saving about $1,000,000.00. Right?

RTFA.

The provider is not Verizon. If Verizon had a presence in these small towns there wouldn't be a problem. Its precisely because Verizon has no direct
route to these small rural companies that this problem has developed. Verizon hands off said calls to contract carriers who accept the call, calculate the price, and promptly drop the call. Verizon is none the wiser. The receiving party never gets the call, and is none the wiser. The calling party is left wondering WTF?

From TFA:

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, a Verizon 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.

Re:Return it to Public Infrastructure

[rtfa-troll]

It's up to the customer(s) to get together and test the different phone services that are doing this and make a detailed case to the FCC and FTC.

This is totally impractical. In order to test for this problem you need to make automated repeated long calls from many different locations towards a particular number and prove that it is statistically much worse than other numbers elsewhere. The only people who have this capability are the phone companies and even they don't all do it that widely.

Now that this has been reported, basically the FCC should demand that carriers, especially cheap VOIP providers, start testing it and audit them to make sure that they do.

Re:Return it to Public Infrastructure

[Anonymous Coward]

But you can read that entire lengthy article and you won't find the name of a single one of these "hundreds of discount long-distance carriers". It's strange that none of them are identified.

Re:Return it to Public Infrastructure

[icebike]

Yup, but Google will find scads of them for you.

Apparently, most of these are basically voip to pots gateways. You need an internet connection and a few trunks from the local phone company you want to serve.
Easy and cheap to set up and get into business.

Re:Return it to Public Infrastructure

[doghouse41]

I think that you will find if you do the math (correctly) the figure is only $10,000.
Still a reasonable sum, but worth breaking the phone system for?

Re:Return it to Public Infrastructure

[Anonymous Coward]

So if that provider is Verizon, and they save the .01 cents say, 100,000,000 times, that means they're saving about $1,000,000.00. Right?

RTFA. The provider is not Verizon.

Whoosh

Re:Return it to Public Infrastructure

[Anonymous Coward]

whoooooosh

Re:Return it to Public Infrastructure

[TheRedSeven]

Whoosh!

Re:Return it to Public Infrastructure

[Anonymous Coward]

woosh

Side-effect of ending traffic pumping?

[IamTheRealMike]

Traffic pumping is/was a practice that essentially let rural US phone companies suck money directly out of large carriers bank accounts. The various regulations in place over the telecom industry meant that companies like AT&T couldn't do anything to stop it.

Re:Side-effect of ending traffic pumping?

[faedle]

That's the irony here. Least-cost routing is one "equal and opposite reaction" to the "sender pays" system and the way calls are billed at termination.

Many of the rural exchange operators signed deals with carriers like Level3 who operated large dialup modem pools in rural exchanges near big cities are looking for ways to use that interconnect. It's really hard to feel "sorry" for these rural phone companies when they went out of their way to get this traffic in the first place 10-15 years ago, and now have these same carriers representing a significant chunk of their business instead of just 1-3%.

Re:Side-effect of ending traffic pumping?

[Technician]

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

"Free" market fail

[Jawnn]

If the telecom industry had not been regulated, people who lived in rural areas would have have gotten phone service. One might rationally argue along the lines of "Too damned bad. Move to town, ya hick.", but most people would not. The phone service is a utility, a vital one. As such the phone company was granted certain benefits (rights of way for the stringing and later, burying, of cable, for example). In exchange it agreed to wire rural areas. There's more involved than just that, but you get the idea. Without regulation, things would have been a mess, with consumers held hostage. Regulation can fix this scenario too. It's complicated though. You can't just telll the LD carriers "you must complete this call" if doing so costs them more than they charge. Likewise, the small rural phone companies must receive enough revenue to maintain their operation. And of course, wireless muddies things even further. The only way this is going to get fixed is if sane regulation is brought to bear.

Re:"Free" market fail

[icebraining]

People don't need to move, they just need to pay enough so that their carriers won't charge higher fees for incoming calls.

Saying "regulation can fix this scenario" without specifying how is senseless. The bottom-line is, any regulation you impose in this case just passes the extra costs from rural citizens to everyone else. Therefore, if you as a society think that cheaper phone service is indispensable, you just impose a tax on everyone's phone bill and use it to subsidize rural users.

Personally, I see nothing wrong with having people pay the extra cost of living in the rural areas. Not to mention that other stuff (e.g. land) is cheaper than in the cities.

Re:"Free" market fail

[MtHuurne]

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.

Re:"Free" market fail

[Anonymous Coward]

Income is also lower. So they are squeezed on both ends, lower income and higher cost of services. This causes a growing disparity between rural and urban citizens. That is bad for a society. Being a selfish piece of garbage and saying they should simply pay much more so that everyone can avoid pennies is exactly the kind of attitude which is causing this country to degenerate into a shithole. Perhaps when you watch your family gang-raped by these odious proles you care nothing about while your house burns down around you, cooperation will finally seem like the better choice.

Re:"Free" market fail

[Anonymous Coward]

I live in a city 1 hour drive from Sacramento, CALIFORNIA and most people still are on dialup, 56K modems, and have no CELL phone reception.
So I agree, until the government FORCES the Teclo oligolpoly to provide us service they never will.
All US citizens should vote the whoring congress people out, so the next batch will listen to us instead of the telco oligopolies

Re:"Free" market fail

[icebraining]

I'm not from your country. But in any case, fine, I'll subsidize phones if they subsidize the much higher rent and land prices

Re:"Free" market fail

[Anonymous Coward]

Please feel free to stop spouting socialist bullshit on my Rural Citizen behalf. If it costs more, I'll pay more. If the cost becomes prohibitive, I'll stop paying. I'd rather go wireless or even not have a phone if it means stealing out of someone else's pocket to get it. You know why all those fly-over states are red rather than blue every four years? Because we're not assholes who think we're entitled to what we haven't earned.

Re:"Free" market fail

[kelemvor4]

Saying "regulation can fix this scenario" without specifying how is senseless. The bottom-line is, any regulation you impose in this case just passes the extra costs from rural citizens to everyone else. Therefore, if you as a society think that cheaper phone service is indispensable, you just impose a tax on everyone's phone bill and use it to subsidize rural users.

Personally, I see nothing wrong with having people pay the extra cost of living in the rural areas. Not to mention that other stuff (e.g. land) is cheaper than in the cities.

I disagree, when you have a complex problem saying that using a means to force action that has yet to be determined can be the start of getting things done. Then you need to form some sort of committee and work out what the best option is and it will likely end up being some kind of new rules to the game. The fact that the problem exists proves that self regulation of the market is not working in this instance and the government will have to step in in order to prevent the citizens from getting screwed by the market failure. Just because GP doesn't have the final answer at this time doesn't mean his comment was senseless at all.
Look on the bright side, when YOUR business finds a way to solve this with a new (presumably unregulated) technical solution you get to make a shitload of money! In the meantime, the government is going to have to hand down an edict that again makes things work for everyone.

Re:"Free" market fail

[icebraining]

There's no market failure. The market isn't a magical way to create free lunches. It costs more to get a line to rural areas, and someone has to pay for that.

"The government has to step in" is a meaningless statement. The government doesn't have a magic wand that can make rural connectivity as cheap as urban. The only thing they can do is pass the costs to everyone else.

Re:"Free" market fail

[kelemvor4]

There's no market failure. The market isn't a magical way to create free lunches. It costs more to get a line to rural areas, and someone has to pay for that.

"The government has to step in" is a meaningless statement. The government doesn't have a magic wand that can make rural connectivity as cheap as urban. The only thing they can do is pass the costs to everyone else.

This isn't a case of the market charging people more in rural areas, it's a case of the market failing and not providing service to people in rural areas. It's more than just an inconvenience - telephone service can be the difference between life and death in emergencies. It's probably much more important than electricity.

Re:"Free" market fail

[Miamicanes]

The solution is actually pretty easy and straightforward... get fiber close enough to 99% of Americans to achieve at least 512kbps down and 192kbps up (minimum guaranteed sustained level of service for each end user into the nearest NAP, with the expectation that real-world speeds would be 4-8 times faster, and "end user" defined in a way that guarantees that a house with 4 human inhabitants could get 2mbps down and 768k up of guaranteed aggregate bandwidth into the nearest big-city NAP), and establish a regulatory framework that lowers the barriers to entry for anyone who wants to get connected to that fiber -- ideally, low enough that even an end user willing to throw down a kilobuck or two for hardware could do an end-run around everyone standing in the way and put his own fixed wireless antenna & transceiver on the (possibly) government-owned tower at the nearest fiber point if necessary. Then resell access to his adjacent neighbors if he felt like it.

Allow companies like AT&T and Comcast to buy wholesale access to that fiber and lay their own fiber, coax, or even just repurpose copper pairs... but ensure that if push came to shove, end users could show them their middle finger, leapfrog over them at their own expense, and peer into the government-laid fiber on the same neutral terms as AT&T or Comcast themselves. Where possible, the government could encourage those big companies to lay the fiber instead, and give them low-interest long-term loans that are contingent upon them offering access to end users on the same neutral common-carrier terms... but also giving the FCC (or its delegate) the authority to seize and operate that infrastructure directly if the company becomes unwilling or unable to (kind of like how the FDIC can seize a bank when it becomes insolvent, and operate it directly under receivership to prevent disruptions for customers who depend on it.

The government shouldn't try to be the ISP of last resort for poor Americans, but it SHOULD strive to eliminate what would otherwise be insurmountable structural barriers to end users who fall through the cracks of AT&T/Comcast's business plans, and lower the bar enough to allow highly-motivated end users to take matters into their own hands without having to depend upon AT&T or Comcast for the solution.

Re:"Free" market fail

[Anonymous Coward]

If you, as a group, view such a subsidized service as stealing from other people, why do you keep using it? Why haven't you all, en mass, stopped using the local, subsidized telephone service and bought satellite phones where you know you are paying for it yourself? Or would people not stop using it until the price actually reflected the cost, because when given the option, most people will take the cheapest option and ignore external costs imposed on others, regardless of the color of their state. So they would need an outside authority to force costs to actually reflect what they are doing, to make the decision for them since they won't do it themselves...

Re:"Free" market fail

[Anonymous Coward]

Really, you're making the hypocrisy argument...?

When will people learn..it's not an argument, it's at best an attack on the person.

I'm perfectly capable of holding some belief that "X is wrong", and then using the benefit of X without being a hypocrit.

That just makes me rational and not an idiot.

If somebody does something wrong, and it has a positive outcome, I should use it to mitigate the damage. I may even have an ethical responsibility to do so.

If I think that the presence of foodstamps is wrong -- but I qualify ... I'm going to use them. That doesn't make me less of a person or dishonorable. That makes me someone who uses the benefits for which society has made me eligible.

Don't like it? All you need do is also vote against it.

I'm not going to give up a benefit every other person enjoys just for the sake of my own argument. That would be idiocy.

So yes -- people in red states are perfectly freaking capable of rationally, logically, and ethically voting against programs they themselves use.

Don't sprout bullshit about how they won't do it themself. They shouldn't do it themself. It would be stupid to.

Re:"Free" market fail

[Anonymous Coward]

The market did not fail here. Rather, rural people were upset with the market costs. They CHOSE to live far away from everything, then balked at paying for the infrastructure necessary for phone calls, etc.

They basically lobbied to have people who chose to live in cities pay to prevent them (rurals) from paying the costs of living so far away.

Rural people get the benefits of living far away from dense areas, ie., quieter, possibly less pollution, looser zoning regs, etc. The downside is that they live far away from everything, so everything that they need from the cities can be more expensive ie., anything that involves physical infrastructure-wiring, roads, piping, etc.
They also have to drive farther to get into town-should city people be required to subsidize their fuel a well?

City people choose to live in denser areas-they get the noise, pollution, and less flexibility with zoning. On the other hand, they are closer to things, to they typically pay less and have to drive shorter distances. They reap the rewards and have to bear the burdens of their choice(s).

Rural people apparently get to reap the rewards and benefits of living far away, yet they are somehow entitled to transfer their burdens to everyone. Seems disturbingly unfair. Maybe rural people should be required to pay "urban/suburban housing subsidies" that go towards offsetting rent costs in denser areas.

Re:"Free" market fail

[Anonymous Coward]

The point wasn't so much that it makes a person a hypocrite, but that they need an outside authority to make such decisions for them, because they are incapable of following through themselves. Your reply seems to be in agreement in that regard.

Regardless, you are correct in saying that if a person says "X is wrong" they can do X without being a hypocrite... if only admitting what they are doing is wrong. If they claim it is wrong, and then claim to do the same thing without being wrong themselves, that is the definition of being a hypocrite though.

To me, that doesn't make someone an evil, dishonorable person anyways. It just weakens the argument, that they don't seem to care about the problem if they don't take steps themselves to mitigate the problem. If rural people thought it was a great travesty to take money from urban people to pay for their phone service, they would stop using it, even if it doesn't completely stop the problem, it would mitigate it. Otherwise, it becomes more of a "Well, someone should fix that at some point... but I don't care that much to make any changes in my lifestyle."

Might as well complain about how people shouldn't let their dogs crap in a public park without being cleaned up, but continue to let your dog crap there until it is made illegal, because you are going to use that benefit as long as possible.

Re:"Free" market fail

[rmdingler]

Satellite phones are subsidized for the most rural of residents, too....as is rural electric service. Should not our country brothers and sisters enjoy modern conveniences such as electricity, phone service, and internet while they grow our subsidized corn, soybeans, and cotton?

Re:"Free" market fail

[Anonymous Coward]

Actually, you city slickers aren't aware that we country mice are already paying two to four times as much for telephone service and internet connectivity as you. It's been like that for decades.

Re:"Free" market fail

[Immerman]

The problem is finding non-whoring politicians to replace them with. After all they have to pay for all those campaign ads somehow...

Re:"Free" market fail

[amorsen]

So they are squeezed on both ends, lower income and higher cost of services. This causes a growing disparity between rural and urban citizens.

If they can earn more money in the city, then that is probably because the benefit they provide to society is higher in the city. We are all poorer because rural citizens are underperforming their potential.

That is certainly not something we should subsidize even more.

Re:"Free" market fail

[DarkOx]

telephone service can be the difference between life and death in emergencies.

So can living an hour closer to a hospital. What's point? There are risks, costs, and many benefits to living in any place. Weigh them and take your choice.

Should we have to build a ER in every small town? Do we need a fire station within 5min of ever country house along some road? Where do you draw the line? I have relatives that would probably be alive today if they had access to better emergency services and communications. I don't fault society though, they chose to live where they lived and loved living there.

Re:"Free" market fail

[amorsen]

The long distance carriers should take "you must complete this call" into account when setting their price.

The challenge is that other carriers can swoop in and pretend to be regular customers, sending precisely the most expensive calls to a provider but using other routes for the rest of the traffic -- "cherry picking". Carriers will typically deactivate the accounts when they discover the cherry picking, but that is a whack-a-mole game. The carriers can just price all calls at slightly above the highest possible termination fee, but then they would not be competitive.

The US can consider itself lucky in one way: there are no ridiculous termination fees for mobiles. Europeans have laughed at the US for years for making people pay for incoming calls, but Americans definitely have the last laugh.

Re:"Free" market fail

[rtfa-troll]

If they can earn more money in the city, then that is probably because the benefit they provide to society is higher in the city. We are all poorer because rural citizens are underperforming their potential.

Or alternatively; the benefit they provide to society in terms of stability of food availability, particularly in wartime; in terms of distributing the population and providing places for support and evacuation in the case of a failure of a city; in terms of maintaining culture and crop variety and a bunch of other things, are not measurable by normal market economics.

Re:"Free" market fail

[realityimpaired]

Cell phones are subsidized, in a way, but sat phones aren't. Sat phones cost the same to provide service no matter where in the world you are, because putting a satellite in the sky is a fixed cost and covers geographical area. They are limited in terms of how many customers a given satellite can handle, but the cost per customer for putting a satellite in the sky doesn't change regardless of whether a customer is in New York City or Alert.

Cellular phones, on the other hand, have a different set of problems entirely... there is a limit to how many connections a tower can handle, so towers are more densely placed in cities, but there is also a maximum radius that a tower can reliably serve. In rural/low density areas, it's unlikely that a given tower will be anywhere near the maximum population it can handle, and the per-customer cost to service that tower goes up. The cost of the rural towers is, in effect, subsidized by the urban customers, because the rural customers pay the same monthly rates.

Re:"Free" market fail

[Bengie]

Quite a few people in the country side are farmers. Are you saying we should punish farmers? Why not just get rid of public education while we're at it?

Getting farmers connected is important, enough so that Minnesota is spending its own money to run 100/100 fiber out to farms that are 35 miles outside the city.

Re:"Free" market fail

[MtHuurne]

The challenge is that other carriers can swoop in and pretend to be regular customers, sending precisely the most expensive calls to a provider but using other routes for the rest of the traffic -- "cherry picking". Carriers will typically deactivate the accounts when they discover the cherry picking, but that is a whack-a-mole game.

From the article it seems that is already happening: those low-cost carriers that do not drop the call often forward it to another carrier, who makes the same tradeoff and forwards it again and in the end no-one connects to the recipient.

The only real solutions I can see is to either have uniform termination costs or have different quoted prices for routing a call depending on where that specific call is going. It seems the FCC is choosing the former, but that's a long-term solution. I'm guessing the latter would require significant changes to the systems directing and billing calls so that wouldn't be a short-term solution either.

Re:"Free" market fail

[ineffablepwnage]

Most people who live in rural areas would gladly pay more for almost any service that's up to par, whether it's phone, internet, or cell coverage. The problem is it isn't available. I live not too far out of a decent sized city (for a rural area), and there's no cell coverage or internet available at my house (apart from unreliable dial up, which these days doesn't really count since doing anything on the internet besides browsing text sites requires a faster connection). The issue isn't subsidizing rural areas to cover the cost, it's the companies who have been granted special privileges to provide service to everyone aren't providing service to everyone.

Re:"Free" market fail

[Darinbob]

Regulation did fix the mess, past tense. It wasn't until AT&T was broken up for straying too far from what it agreed to and market forces took over that things started becoming a mess again.

Re:"Free" market fail

[amorsen]

There is no fundamental reason why those benefits are non-measurable. Some of them sound rather dubious. Stability of food availability? How is that helped by having inefficient subsidized farmers?

Re:"Free" market fail

[icebraining]

Not subsidizing Internet access is punishing? I guess I'm being punished!

Getting farmers connected is important

If they agree with that, I'm sure they'll invest in it. Farmers aren't stupid.

Re:"Free" market fail

[amorsen]

The only real solution is to lower the actual termination costs by using cheaper technology. I.e. cell phones below 500MHz. I am having trouble imagining a place with low population density where that isn't cheaper than maintaining copper cables.

Keeping long copper lines alive is not sensible. They cannot provide decent Internet access and they are too expensive for phone use. Do you know if mobile providers get the same great termination fees?

If the market won't do it on its own because of the distortions, the FCC should simply mandate that all termination fees must fall 10% a year. They can make fees below 1c/minute exempt from the rule if they are feeling generous.

Re:"Free" market fail

[icebraining]

Good or bad, that regulation did what I said it can do: it imposed a cost on everyone else to subsidize more expensive lines.

Re:"Free" market fail

[Bengie]

Except the farmers probably can't afford the initial connection, but the state sure thinks it's worth while. The state is expecting to actually increase overall income, but the farmers won't notice much. Kind of funny how the individual won't see much benefit, but the group as a whole does.

Re:"Free" market fail

[chriscappuccio]

The real problem is that the regulatory structure (OPPOSITE of free market, FYI) forcing high rates for intrastate calls in rural areas. Both unscrupulous phone companies charging ridiculous amounts of money to complete calls, and unscrupulous long distance providers doing insane least-cost routing tricks to evade regulatory charges like sending the intra-state call to Eurpoe.

Re:"Free" market fail

[zippthorne]

Then they charge more for the food they ship.

It all comes fairer out in the end if everyone pays for the cost of their own services, as long as it's actually possible to apportion the bill properly.

Re:"Free" market fail

[Rich0]

Uh, I'd be clearing an extra $1000 a month or so in mortgage payments if I lived in an area where the cost to run phone lines was a concern. I think with that money I could afford to pay a few extra bucks for phone service.

Face it, living costs money. I'm all for basic income for those who have no way to earn an income, but why not give people the price messages they need to make wise choices?

Re:"Free" market fail

[Anonymous Coward]

History disagrees with you. When AT&T refused to set up rural exchanges in the 1930s, local coops were formed to do so. But then Ma Bell was hurt at how much they were losing, and went to the courts to take over rural exchanges.

Re:"Free" market fail

[Anonymous Coward]

But they can't charge more, the buyers will just go to an external source (outsourcing of food), and the land will revert back to forest. There are many who think this is good, but it is extremely short sighted.

Re:"Free" market fail

[Anonymous Coward]

So, I've been paying a monthly fee for my phone for 20+ years, are you saying they haven't made their money back for running that line to my house yet? I will probably continue to pay that same monthly fee for the next 20-40 years as well, will that pay for it? So how many months of payments do I have to make before they make a profit from me? Now, what exactly are their costs for that line to my house initially (oh, did I mention I had to pay a big "installation charge" to have that line installed in the first place, so not exactly sure how much they have left to actually make to come out ahead... but I guess that's why my phone bill goes up 5-10% every couple of years (gone up $10 in the last 4) right?).

At some point we have to stop and say, wait, why are we pointing fingers trying to blame people for the pennies, while somewhere the dollars are being skimmed off....

Re:"Free" market fail

[icebraining]

That's why farmers form cooperatives. If the poor, illiterate farmers around here could, they can too.

My guess is that the farmers just got someone else to pay for their Internet connections, but I don't know enough about that case to tell if this is true.

Re:"Free" market fail

[rmdingler]

Satellite phones were in fact subsidized by some gov't. entity in rural southwest Texas as recently as a couple of years ago for ranchers there. I don't know if the program is still in place, or whether the subsidizing entity was county, state, or federal...but some ranching friends of ours were able to acquire a couple for next to nothing because cell service is virtually nonexistent in many areas.

Re:"Free" market fail

[Anonymous Coward]

If that is the case and you still have moral objections to subsidization for rural folk, then just get a normal satellite phone account and not apply for/accept the subsidization. The satellite phone company won't know if you are some rural person using it because of lack of cell coverage or other issues if you don't tell them, and they will be happy to charge you the normal rates.

Re:"Free" market fail

[Anonymous Coward]

> Personally, I see nothing wrong with having people pay the extra cost of living in the rural areas.

Fine. We'll be adding a 'telecom subsidy charge' to every train car full of food that we provide for people who live in urban areas and can't be bothered to provide for themselves.

Re:"Free" market fail

[hazem]

They are non-measurable because you can't put a specific value on them. At best, you can put a range of possible values depending on what happens.

The value of a stable food supply can only be measured when it's needed and not present. When you have a famine, it's easy to measure the cost in lives that not having that food supply incurs. When you have plenty of food and no emergencies, then on the books, it appears to be a cost with no benefit.

The fire extinguisher cost me $20. But if I never have a fire, then it's a "loss". I can only truly measure its value when I do have a fire and can measure the true value of what was saved by having it, or what was lost by not having it.

From a risk management point of view, it's probably worth the extra cost of building a flexible food supply system because the potential costs of not having it when we need it is very high. But until we have that famine, it only shows up as a cost.

Re:"Free" market fail

[Jawnn]

You are ignoring (again) the value gained by the telco's in being granted a virtual monopoly, given rights of way, etc. That was part of the deal too. And let's not forget the windfall the telco's were given when the very first round of regulation covering broadband services came into being. That money was pocketed and never seen again. No, what we need is real regulation, with real teeth. Not that we're likely to see it in our lifetimes. The combination of the most powerful lobby on the hill, legislator ignorance of the issues, and consumer indifference will see to that.

Re:"Free" market fail

[icebraining]

I'm not ignoring them; those are the regulations that created the problem in the first place, and you're now talking about putting more band-aids over it instead of fixing it.

It was the AT&T monopoly regulation that screwed-up the market, letting inefficient rural providers live off easy rents for decades, and now that new, smaller players entered the market, the rural providers are unable to offer decent rates.

You're talking about monopolies and the most powerful lobby, but how exactly do the small long-distance carriers - the ones pointed as dropping the calls - have that?

to be expected

[LodCrappo]

if you live where there are few people, you must either pay a premium for dedicated services or go without.
this isn't new. unless I've missed something, the telcos have no obligation to lose money servicing a handful of remote locations.

if you chose to live in the middle of nothing, you probably are not surprised by the lack of off broadway shows, public transportation, and a wide variety of other things that require a certain population to turn a profit. why should telco services be any different.

Re:to be expected

[msauve]

"the telcos have no obligation to lose money servicing a handful of remote locations"

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

[Anonymous Coward]

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.

Re:to be expected

[Anonymous Coward]

if you choose to live in an urban area, you must either pay a premium to provide _basic_ infrastructure to rural/agrarian areas or go without food.

your move.

Re:to be expected

[Anonymous Coward]

last I checked I paid them for the food I eat. They don't pay my city taxes to get things like government and industry, so they should pay me or go without things like government and college educations for their children.

Re:to be expected

[Anonymous Coward]

Right, so we'll just wall you up in your city and check on your status in about five years.

What's that? One big community? Cooperation? No, sorry... if you chose to live in the middle of a concrete jungle, then you should expect to see a complete lack of food, water, and fuel.

Re:to be expected

[Lumpy]

Sounds like a plan, so when is the telcos going to pay back all that public money we gave them to build out the rural system?
Because they owe all of it back WITH INTEREST if they go with your really stupid plan.

Re:to be expected

[sjames]

Good luck with that eating habit when the farmers move to the city.

Meanwhile, I guess if the telcos are not going to have any special responsibilities anymore, they get no special privileges.It seems there's a minor matter of all that copper they buried in my yard without paying rent. I guess I'll sell it on ebay.

Re:to be expected

[davester666]

... least cost long distance provider decides that the pay is not enough to cover the costs and render a large enough profit...

FTFY

Re:to be expected

[icebraining]

Last time I checked, people in cities paid for all of that.

Re:to be expected

[icebraining]

If some farmers move to the city, the others will raise their prices, and then the city people will have the choice of lowering their consumption or paying more, instead of being forced to pay for everyone in rural areas, regardless of whether they actually produce food or not.

Re:to be expected

[RabidReindeer]

Yes, and the more that the farmers have to pay for communications, the more they'll have to charge you for food.

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.

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?

Re:to be expected

[Anonymous Coward]

It goes both ways..
People in rural areas have to pay for beltways, bridges, tunnels, stadiums, subways, security and police in the populated areas too..

I say this as someone from northern VA that pays for a very high percentage of services that that are used elsewhere in the state.
Including this massive road http://www.roadstothefuture.com/US29-Lynchburg-Madison-Heights.html in a sparcely populated area while here in congested northern VA we can not "afford" to build any roads or improvements without selling out to companies to make for profits on HOT lanes.

Re:to be expected

[icebraining]

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:to be expected

[Anonymous Coward]

Bring it.

There are farms near urban areas. There are also various methods to grow food in cities.

I think what rural people are truly afraid of is having to absorb the full costs and then pass those onto their customers, and have those customers truly understand the REAL costs of buying from so far away.

Right now, portions of rural existence are subsidized in a slightly hidden, involuntary way. Rural people use this to keep their costs appearing low.

While the perceived costs would go up, the actual costs wouldn't change much at all. What it would do is give people who really believe in buy local or grow local, the ability to truly compete now that their competitor(s) aren't being subsidized.

Farmers may also find that they can't squeeze out much of a living if they simply eat their own food and don't sell it to city folks.

Re:to be expected

[sjames]

Yes, because more expensive food is so good for everyone! Especially the poor. The sooner we starve them out the better!

Meanwhile I'll be off practicing some free market with that 'abandoned' copper in my yard!

Re:to be expected

[icebraining]

As I said elsewhere, if we want to help the poor buy food, we should do just that, and not use a crazy scheme that helps them only very indirectly, and wastes most of the money.

That argument is just a different type of "think of the children!!"

Re:to be expected

[amorsen]

Long distance providers are extremely competitive, I cannot see them dropping a call they would make even 0.1 cent on.

Re:to be expected

[Anonymous Coward]

Yeah, right. That's why I pay city income tax and a rent that would have made me shit myself 15 years ago when I lived in the boondox. That's why my city is a net contributor to every possible budget that we even have anything to do with.

Re:to be expected

[Anonymous Coward]

We have a winner.

Re:to be expected

[amorsen]

Yes, because more expensive food is so good for everyone!

Yes, that is pretty much correct. Free market (i.e. more expensive) food prices is a good way to ensure that the food provided is what people want. Random subsidies distort the market, and distorted markets tend to produce the wrong things.

Especially the poor. The sooner we starve them out the better!

Helping the poor should be done directly, not by distorting markets. One solution which involves very little administrative overhead is citizen's income.

Food cannot be entirely left to the free market; demand is too inelastic and supply too unpredictable for that. Government-run granaries have solved that problem for thousands of years.

Re:to be expected

[Anonymous Coward]

If it makes space for a call they can make 0.11 cents on, they'll drop their mother.

Re:to be expected

[amorsen]

True, but why would a long distance provider have limited capacity?

Re:to be expected

[swalve]

Except that no they don't. They think they do, but tax money almost always flows from the urban areas out to the rural ones. Rural infrastructure costs more per capita.

Re:to be expected

[chriscappuccio]

You aren't really looking, then. The providers that you pay are paying someone else. Nobody runs their own worldwide network. Somewhere, someone cuts corners, for one of many reasons. Whoever sends calls to them gets screwed. The example telco in this article should figure out who the major call dropping problem carrier is, and refuse to accept calls from them at all. There is probably one or two bad actors in each case that fuck it up for everyone.

Re:to be expected

[chriscappuccio]

The same reason your internet connection has a limited capacity. It's called "reality". It starts with Shannon's theorem.

Re:to be expected

[amorsen]

Long distance carriers, certainly the cheap ones, have gone VoIP. Phone calls are only about 100kbps worst case, and if you don't care about quality you can go much lower than that. A 1Gbps pipe can handle at least 10,000 simultaneous calls, and even at the razor-thin margins of long distance carriers it is easy to afford 10Gbps if you are dealing with 10,000 simultaneous calls. On top of that comes the traffic costs, but 100kbps is 750 kB/minute. 0.1 cent/minute is at least an order of magnitude more than the cost of traffic.

The more expensive carriers can hit limits because they expect more from it and therefore buy more expensive guaranteed capacity. However, they also have much higher margins so they can afford to upgrade.

Re:to be expected

[sjames]

So the free market is what we need for food but food cannot be left entirely to the free market?!?

Re:to be expected

[sjames]

So what say you abiout the copper? Shall I be expecting rent from Ma Bell or shall I be selling some copper?

Re:to be expected

[icebraining]

You shouldn't expect anything because I don't make public policy, less alone in your country. But if they're using your land to connect other people, I don't see why you shouldn't get some benefits from it if you want to, like a discount on your fees.

Re:to be expected

[amorsen]

We need to distort the market enough that people do not starve when the harvest fails one year. We do not need to pay people living in rural areas for making phone calls -- that makes farmers who happen to make phone calls more competitive with farmers who don't, and there is no guarantee that the farmers who make more phone calls are the ones who produce the most needed products.

Which is what I wrote already.

Re:to be expected

[sjames]

My point is that the phone companies cannot claim they are not getting anything in return for their obligation to provide universal service.

As for compensating individuals, they would need to negotiate each case separately and would have to pay actual money (since a property owner might not opt for phone service). The net result is that we would have never developed a telephone network, electrical grid, or internet.

Re:to be expected

[sjames]

Interestingly, farmers being able to communicate easily and cheaply is closely tied with gathering and disseminating the information needed to predict and sometimes avoid crop failures.

It is notable that without distortions to the market, telephone service would only exist in urban areas and it might or might not be possible to call someone long distance at all. It would be necessary to have more than one phone since some networks wouldn't talk to others.

Re:to be expected

[Reziac]

I'm wondering what the cost of food would be if this tax flow didn't happen.

Re:to be expected

[amorsen]

The cost of telecommunications is completely trivial today compared to the value of crops. Satellite service can fulfil that need.

The topic of article is that it is "necessary to have more than one phone since some networks [won't] talk to others."

Re:to be expected

[sjames]

If it's that dirt cheap, why do people get so burned up about subsidizing it?

Re:to be expected

[amorsen]

I never said it is dirt cheap, I said the cost is trivial compared to the value of crops.

The subsidy is not specific to communication related to "gathering and disseminating the information needed to predict and sometimes avoid crop failures."

If it is necessary for the functioning of society that farmers have phone lines, then by all means run a government bid to provide phone service to farmers. Or start a government phone company to provide the service. Or nationalise the telecoms backbone or send in the USACE, if that is what it takes. I am a leftist, Big Government doesn't scare me. But either way, do it properly, get the money for the project in through taxes and give the money out through the budget so it is plain for all to see what is going on. Hiding taxes and subsidies on phone bills is just lying to people, it prevents reasoned discussion of the costs and benefits, and it causes just the kind of weird results that this article talked about.

Even if done right, I would still most likely be against the subsidy, but all it would take to convince me would be a few proper scientific studies.

Re:to be expected

[swalve]

The price would more accurately reflect the cost. People would make different choices.

Re:to be expected

[Reziac]

Pretty much what I had in mind, tho I do wonder how much of a change it would really cause. Only about 5 cents a pound more would make meat and milk production reasonably profitable, rather than their present marginal profit. So... likely wholesale food prices would go up, but not by much, if this tax flow went away.

Re:to be expected

[sjames]

Universal connectivity is, in itself, a value for society. I would support community ownership of the network (but would permit competing systems). Given the current political allergy to government actually providing public services, that seems difficult to accomplish. Given that, the subsidy is probably better than not doing anything.

Least Cost Routing, not ICBA Routing

[Anonymous Coward]

Hang on - it's 'least cost routing'. That means you do it for as little cost as you can mange, not that you only do it as long as it costs less than some arbitrary threshold.

If you can't route it for more than what you charge (on average) then you're not charging enough. You can't just drop the call!
 

Re:Least Cost Routing, not ICBA Routing

[Anonymous Coward]

Hang on - it's 'least cost routing'. That means you do it for as little cost as you can mange, not that you only do it as long as it costs less than some arbitrary threshold.

If you can't route it for more than what you charge (on average) then you're not charging enough. You can't just drop the call!

Sure you can, as long as the FCC doesn't catch you.

Re:Least Cost Routing, not ICBA Routing

[rtfa-troll]

If you can't route it for more than what you charge (on average) then you're not charging enough. You can't just drop the call!

The way this is being described it's very likely that the carrier of the person calling the rural subscriber doesn't even know this is being done. Notice that they describe calls completing and then being cut off. In the statistics those look like successful calls. Probably even more so because I will bet that the carrier in the middle reports a normal call end back in each direction.

What's happening is that some intermediate carrier is promising to deliver the call for a very cheap amount; signing a contract with the VOIP carrier which is doing the least cost routing and then profiting by droping those calls which wouldn't make mone.

The "Least cost routing" isn't directly to blame. It's a cheap and dodgy intermediate carrier woul is doing exactly what you say they shouldn't in a way that nobody can easily spot.

Scapegoat

[Spazmania]

Baloney. If least cost routing were at fault VoIP services like Vonage would fail long before a rural telco. Whatever the problem is at Shoreham Telephone it has nothing to do with least cost routing and everything to do with their technical infrastructure and choice of direct vendors.

Re:Scapegoat

[Jmc23]

Why would Vonage fail? Are you saying that the profitability of Vonage lies in not well connected rural areas?

Re:Scapegoat

[anon mouse-cow-aard]

You didn't read the article. It's not IP level least cost routing, it is Voice traffic carriers picking the "cheapest" (in terms of the complicated inter-phone company charging rules.)

Re:Scapegoat

[Anonymous Coward]

Seeing as I know the guy who built their infrastructure, and he's one of the best network guys in New England, it ain't their infrastructure that is the problem.

Re:Scapegoat

[chriscappuccio]

Wrong. The rural telco as the call destination represents a high cost. Vonage as a destination often does not.

Re:Scapegoat

[sunderland56]

The article is flawed - it calls the algorithm least-cost routing. In reality, it is a fixed-maximum-cost routing:

if (cost_per_minute > ARBITRARY_CUTOFF)
        drop_call();

Re:Scapegoat

[TClevenger]

Baloney. If least cost routing were at fault VoIP services like Vonage would fail long before a rural telco. Whatever the problem is at Shoreham Telephone it has nothing to do with least cost routing and everything to do with their technical infrastructure and choice of direct vendors.

I like how the "state representative" in the article gets cut off in the middle of a conversation with a customer, and then says, "Phone calls here get cut off."

That sent up a red flag for me. Is he suggesting that these cheap carriers are completing the call and cutting him off minutes later? Maybe the call costs are an issue, but I'm wondering if there isn't something else going on at Shoreham as well.

No wonder......

[Anonymous Coward]

Imagine that. I can't terminate a call to your little telco for less than 2.9-3.6 cents per minute. I CAN'T get away with charging customers this. The only real solution is to send calls to the CHEAPEST carrier available and average out the losses against a more popular calling destination.

What burns me is this guy bitching about call quality terminating to their telco BECAUSE of the telco's outrageous termination rates. Then the guy tries to play it off on the PUC, meanwhile knowing full well that they submit the rates for approval before the commission who sets the MAXIMUM rates.....

Re:No wonder......

[Anonymous Coward]

What burns me is this guy bitching about call quality terminating to their telco BECAUSE of the telco's outrageous termination rates.

But if we don't charge long-distance carriers ridiculous termination rates, we'll have to charge our customers who choose to live in the boonies the cost of providing phone service to the boonies!

Re:No wonder......

[tibit]

Like, um, duh?

Re:No wonder......

[chriscappuccio]

Well put.

This is in the US, right?

[Anonymous Coward]

Just checking... Not relevant to the rest of the world eh.

Re:This is in the US, right?

[lennier1]

Stuff going on in countries with a less developed communications infrastructure can still be of value to the rest of us.

Re:This is in the US, right?

[rtfa-troll]

Nope; there is very much related bullshit going on more or less everywhere (except direct international calls which cost so much that nobody wants to drop them). It's just more visible in the US 'cos the rest of us are too lazy or beaten down to compain.

Re:This is in the US, right?

[qbast]

In Europe? I don't think so.

Re:This is in the US, right?

[rtfa-troll]

Yes; More so in Asia. However in Europe there are also some really interesting dodgy VOIP providers particularly incoming towards moible providers (note that call completion costs lots more towards many mobile operators than it costs their own customers .. see if you can think of a business plan based on that). The problems are a bit different, but there is a whole load of interesting stuff that comes out from deregulation.

Personally I think we are getting pretty close to the stage where we will have to give up on POTS. There are just too many security and structural problems whilst the whole cost structure is becoming impossible and at the same time it is becoming fully dependent on VOIP and so doesn't realy provide any stability advantages over IP telephony. I just hope that someone makes this as a decision and makes sure that we get proper emergency services and security on IP before POTS collapses.

Re:This is in the US, right?

[qbast]

If you sign up with dodgy VoIP provider, you get dodgy service, no big surprise here. However at least in Europe you don't get situation when you have "normal" operators on both sides of the call, but calls still fail due to some low-cost middleman.

Re:This is in the US, right?

[Anonymous Coward]

Neither it happens in US. It's all about definition of "normal" and how much people are actually willing to shell out for their service.

I buy service from Verizon, I pay them quite reasonable big bucks for it, and I don't mind doing it at all - haven't had a call dropped / incomplete by Verizon in my whole life.

There is a difference in what you get if you pay $50 a month for this and what you get if you pay $5 a month. Yes, it costs me more but I like to be able to call people that I want to call when I want to call them, and be able to understand what they are saying as well having them understand what I'm saying.

Part of it is that

[kilodelta]

The little local companies that completed the calls were getting astronomical call termination rates. They milked the cow until it was dry.

So we need to revisit the termination scheme for telecom. Otherwise what will happen is that you won't be able to complete calls into the backwaters of the U.S. Only serves them right for getting greedy!

Re:Part of it is that

[Anonymous Coward]

How high are the termination fees? And who sets the fees?

Just for comparison, effective today the new termination fees to landline numbers in Germany are between 0.25 and 0.61 euro cent. The fees are set by the federal network agency and of course with every fee reduction the carriers are bitching.

Re:Part of it is that

[Anonymous Coward]

Accoding to the wiki article on traffic pumping, termination rates to rural carriers can be as much as 10 to 20 cents per minute. Although generally they average around 3 to 5 cents per minute.

Re:Part of it is that

[Anonymous Coward]

IIRC, less than 2 cents, except for rural carriers, some of which charge exorbitant rates because the regulations let them.

Yup - That's Us

[vinn]

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:Yup - That's Us

[Anonymous Coward]

If you got fiber to your house why are you bothering with regular telephones AT ALL.

Cut the phone, use skype or something and that's the end of it.

Re:Yup - That's Us

[aaarrrgggh]

Can't the co-op terminate calls with anybody they choose? If you have a pipe, why wouldn't you tunnel SIP to the provider with the best/cheapest fees? "Peer" with local co-ops directly, and maybe even set up a clearinghouse for co-ops that brokers interconnects with the LECs and CLECs.

Re:Yup - That's Us

[Anonymous Coward]

Then the best phone for you, if internet is so good is VOIP like Vonage.
Why mess around I am no expert but I bet there is VOIP for the business end of phone systems too.

Re:Yup - That's Us

[vinn]

There's some things I don't understand, but this is my take:

1. I have no idea why some Google Voice calls don't terminate. Something at the IXC / ILEC level probably comes into play and I don't understand how IXC's work here and what the relationship really is between our co-op and the ILEC (originally US West). My guess would be they're small and without much depth.
2. Regarding, "If you have a pipe", do you mean us or the carriers? The reason we're not tunneling SIP is we have a traditional PBX (actually 4 of them interconnected with VOIP trunks internally and all sharing a PRI and some analog CO trunks for outbound). So we can't terminate SIP directly. Furthermore, because our local telco is a rural telephone co-op, and like I mentioned, exempt from the 1996 Telecommunications Act, * we have no number portability *. At all. Anywhere. So all of our published telephone numbers, which are very important for our business, would have to be ripped and replaced. (Not quite as bad as it seems because we could pay for call forwarding and probably still save some money, but still.. it's a pain in the ass.)

Regarding why our rural telephone co-op doesn't tunnel SIP to providers with cheap/best fees. Well, I don't know. Heck, maybe they even have started doing that. I suspect they don't though. It's also possible that there are things that come into play with the Universal Service Fund and FCC regs that give them extremely low-priced connections to big providers, so much so that perhaps SIP providers would be even more expensive. That's just speculation.

3. Regarding "peering", in the telco world tradionally that's an IXC function carried out at the ILEC level. Like I said, I don't really know how that works here.

However, peering on the data side is actually pretty cool and I do know how that works. A while back, all of the rural telephone co-ops in Montana got together and formed Vision.net . They pooled their resources and Vision.net acts as the ISP for those co-ops. So they're the ones that peer with the big pipes to the outside world. I believe all of those services are unregulated, so one of the side effects is our rural telephone co-op requires any unregulated data service to be purchased with regulated phone service - then the co-op gets USF money for providing a line to the customer, which they couldn't do otherwise. Anyway, here's a service map for our state: http://www.vision.net/network-services/transport-services/transport-services-map

Re:Yup - That's Us

[vinn]

See my other reply for more details. But specifically:

1. We don't really have a home phone. My wife and I only have cell phones. However, we are required to have an analog telephone line because we have Internet service at home. We don't use it, but the rural telephone co-op ONLY sells their Internet service bundled with phone service. Let me repeat that - it's not possible to purchase unbundled DSL here. They are not an ILEC, so someone like Covad has no access to the local loop. Since they have a monopoly, they can require that and further, because phone service is regulated by the FCC and by providing it, the rural telephone co-op gets USF funds. I think they get like $50 a month from the USF just for providing phone service to our house that we don't use. That's on top of the $45 a month we pay for the PHONE service. So technically I could hook up an analog phone in the house, but I don't want to deal with another phone number in my life, there's no reason for it.

Realistically, there are no other Internet providers here. Satellite is too slow, we use too much data for our 3G cell service. We don't have cable. So our service at home is super expensive compared to elsewhere, but it is pretty good. Their pricing is super weird, so at work we have relatively inexpensive service for what we're getting.

2. Regarding at work, see my other reply. We can't port our numbers to another provider, and that's a problem. Switching numbers is a pain in the ass, but it's something we'll likely contemplate in the next year as we both clean up our published numbers (we used to have over 50 published numbers, I think we're down to about 10 now.) Setting up call forwarding on 50 numbers for a few years would be really expensive, but for 10 numbers it becomes feasible.

Re:Yup - That's Us

[Anonymous Coward]

I have no idea why some Google Voice calls don't terminate.

Very simple. When caller and callee are customers of different phone companies, the caller's phone company pays the callee's phone company for their part of the connection. This is called the termination rate. Some networks charge more than others for terminating inbound calls to their customers. Some networks refuse to connect calls to networks which charge high termination rates.

Re:Yup - That's Us

[realityimpaired]

You're paying $500/mo for phone+internet. I'm paying less than $60, and have never had the kind of problems calling other carriers like you describe. You are getting faster Internet speeds than I am, but I could get a 10mbit upload and half the download you're getting, and still keep my monthly bill under $100/mo, without needing to switch from DSL, and if I really needed the faster download speed, my provider will let me use MLPPP to bind multiple lines.

You may consider it a good deal, but I don't. I would consider $500/mo to be prohibitive, actually, as that's more than I pay for the loan on a new car. To put it another way, you're paying almost as much for your phone as I am for my rent in a major city. Admittedly, I'm paying 1/3 of the rent for the house we're renting, but I could get a 1br apartment in roughly the same area for the same, and the house is within walking distance of the downtown commercial district where I work (3mi), as well as another couple of major commercial districts(0.5mi and 1mi respectively), and a quarter mile from a beach, too.

In other words: you're getting shafted. It may be a good deal for where you're living, but it's a terrible deal for anywhere that has real competition and providers fighting for your business.

Re:Yup - That's Us

[Reziac]

Ah, thanks for the info... am moving back to the area (probably around Three Forks) after a long absence, and was wondering what sort of internet service I'd be stuck with/in hock for.

Re:Yup - That's Us

[Anonymous Coward]

You missed the fact that GP is a commercial customer with multiple lines, PBX's, and numbers.

My guess is that GP is also getting the full bandwidth cited, not "rate limited in practice but marketed & sold as the theoretical max bandwidth" like a typical residential-grade service oversubscribed DSLAM.

Pay for your own infrastructure

[alen]

The boonies are usually red areas that vote republican and spout off nonsense about being independent of Obama and the evil liberals who suck up all the money

Here is your chance to practice what you preach
Pay for your lifestyle

Re:Pay for your own infrastructure

[Anonymous Coward]

How can they when they are taxed of any money they could possibly have to pay for condoms for Sandra Fluk?

Re:Pay for your own infrastructure

[Anonymous Coward]

did Rush allow you to swallow his jizz?

Re:Pay for your own infrastructure

[Anonymous Coward]

Are you telling me that, swallowing the jizz is a privilege, not a right?

Re:Pay for your own infrastructure

[DNS-and-BIND]

So, they voted the "wrong" way and now we get to take revenge on them? How does that work?

Don't worry though - any overly bright kid with Future Farmers of America, 4-H Club, or ROTC on his college admission will be refused entry to the Ivy League. Like you say, it's important to punish these people for living in rural areas.

Re:Pay for your own infrastructure

[Microlith]

So, they voted the "wrong" way and now we get to take revenge on them? How does that work?

No, he's just pointing out that they're hypocrites.

Re:Pay for your own infrastructure

[Loopy]

Here is your chance to practice what you preach
Pay for your lifestyle

What the hell do you think we did before people got all up in our junk with taxes to support the inner-city welfare state? Here's a hint: counties didn't have road-grade equipment until recently, let alone right-of-way zones. We managed to make it through the industrial revolution with limited support from Washington and lower taxes; funny we can't live without 'em today, isn't it?

Also, guess what? Our fire department (what there is of it) doesn't see a dime from county, state or federal taxes: it's all volunteer. We also don't see a dime of federal money for sewage, water, etc. So, tell me again what my taxes are paying for?

Re:Pay for your own infrastructure

[Solandri]

"Practice what you preach" only works in totality. Say I'm a landlord and raise the rent from $700/mo to $800/mo, but I now pay for the utilities instead of the tenants having to pay. If a tenant complains that he'd prefer to pay his own utilities and keep his rent at $700/mo, I cannot make him pay his own utilities and raise his rent to $800/mo and say I'm just making him practice what he preaches. I cannot consider what I want and what he wants, take only the parts which favor me, and truthfully call it making him practice what he preaches. I'm gonna have to let him pay his own utilities but keep his rent at $700/mo.

Re:Pay for your own infrastructure

[speedlaw]

Ethanol subsidies, wars in foreign lands, money to support governments that hate us. Oh, and send your kids (the military is high percentage heartland kids).

Re:Pay for your own infrastructure

[Myopic]

That article was hilarious! It's long so let me paraphrase for Slashdot readers who don't have time to read it all: "Rural parents refuse to teach their children science, history, sociology, or critical thinking; then invent a conspiracy theory to explain why their kids can't get into college".

Re:Pay for your own infrastructure

[the eric conspiracy]

Generally the rural Red states get more back from the government than they pay in taxes.

Re:Pay for your own infrastructure

[LordLucless]

They're only hypocritical if they're allowed to exempt themselves from taxes imposed by the party they didn't vote for.

Re:Pay for your own infrastructure

[Anonymous Coward]

Actually the article (you did RTFA, didn't you) was about a town in Vermont. Which is about as blue as it gets.

Re:Pay for your own infrastructure

[DNS-and-BIND]

Keep the hatred going strong, my friend. After all, they totally deserve it.

59 percent

[fermion]

Let me say this as nicely as I can. 59% of rural votes went for Romeny. In my state, while Obama won the urban counties, the win in many rural counties was way North of 60%. Now, what were they voting for. Were they voting for smaller government and lower taxes, or just voting against minorities who steal tax dollars. I don't know, but the reality is that these people voting for a candidate who did not support the federal government building infrastructure that makes the US urban areas strong. So why do they expect the urban people to pay taxes so they can get cheap calls?

And cheap calls is all it is. They want to pay the same as everyone else. Look, I spent a lot of time living in rural areas in the US and elsewhere. I know the issues. I know the costs. But I am not asking anyone else to pay costs that I choose in incur. In other countries you have phone service. You just pay for a cell phone. And if you have to you pay for a booster station. That is all there is too it. There are very few areas in the US that have no cell reception, and I am sure most would work with a booster. Hell, in my house I don't have good cell reception. Do I go to the feds and demand a personal booster?

If you want reliable phone, do what others have done. Form a cooperative. Pull fiber to the community, and then have the individuals pull wire to their properties. Say this is too expensive, say that the feds should pay for it? Well them maybe you should vote for a liberal government who will tax enough to fund it?

What I feel is really funny is that somehow taxpayers are expected to foot the bill so that people can just pick up the phone whenever they want to just to chat, and we are expected to pay for that entitlement. Give me a break. When I was growing up we often did not talk to our extended family. Why? Because it was expensive and we could not afford it. Maybe once a week on sunday morning, but that was it. I guess we had the advantage is that we were literate so we wrote letters.

I normally am much more receptive to these complaints. We are a rich country so we should have universal reliable communication, health care, education, transportation, teleportation, rib eye, Helly Hansen clothing, but given that those people just voted in great majority against it, it seems a little over the top.

Re:59 percent

[Anonymous Coward]

Stop with all this reality crap, the rich old retired ranchers want it both ways. But prefer to bitch about the damn dirty minorities stealing their money...

it's why I consider most republicans uneducated bigots.

Re:59 percent

[PhamNguyen]

Let me say this as nicely as I can. 59% of rural votes went for Romeny. In my state, while Obama won the urban counties, the win in many rural counties was way North of 60%. Now, what were they voting for. Were they voting for smaller government and lower taxes, or just voting against minorities who steal tax dollars. I don't know, but the reality is that these people voting for a candidate who did not support the federal government building infrastructure that makes the US urban areas strong. So why do they expect the urban people to pay taxes so they can get cheap calls?

Hold up a second. Are you suggesting that which presidential candidate a particular geographical regions voted for, should affect federal spending on that region? That is seriously insane. And your insinuation that people living in rural areas are racist is also similarly ridiculous.

Re:59 percent

[Anonymous Coward]

Why wouldn't that be the case? In the last 4 years there has been regulation and taxation on business/industry that didn't support Obama while tax cuts and hand outs for those that did. I'm sure you heard GE pay no taxes anymore, most of that from policies on "green energy" specifically designed to help them do that. Or take the guitar industry, Gibson Guitar (not a DNC supporter) has been raided twice and had over a million dollars of wood seized. Fender, a union pro-DNC shop, does the same things with wood and was not raided once or had anything seized.

We live in a dictatorship where if you don't support the right guy anymore you will be destroyed. The original poster is merely saying what is already factual.

Re:59 percent

[LordLucless]

Were they voting for smaller government and lower taxes, or just voting against minorities who steal tax dollars. I don't know, but the reality is that these people voting for a candidate who did not support the federal government building infrastructure that makes the US urban areas strong. So why do they expect the urban people to pay taxes so they can get cheap calls?

Because, despite who they voted for, they didn't get smaller government and lower taxes. What you're saying is that the people who vote for low tax/small government should still have to pay the high taxes imposed by the successful ideology and not benefit from the things the government spends that tax on.

The conservative position consists of two points: low taxes and individuals paying for their own services. You can't impose high taxes, and then accuse them of betraying their ideals when they demand they actually get some services for those taxes you've forced them to pay, contrary to their ideology.

Re:59 percent

[cduffy]

We live in a dictatorship where if you don't support the right guy anymore you will be destroyed. The original poster is merely saying what is already factual.

There are a lot of Republicans working in government service, and a lot of Republican senators trying to guide investigatory committees to find evidence of corruption. Conspiracies of this sort wouldn't stay secret.

Re:59 percent

[Anonymous Coward]

I've noticed this tendency as well. Rural areas (typically poor) tend to benefit a great deal from the social spending favored by "liberal" (the Democratic Party). Whereas few of the people in urban areas (typically middle class or better) tend to benefit from the social spending. I suppose the poor are more visible in urban areas, so people don't want them living in abject poverty; while in rural areas they're out of sight, out of mind. Funny contrast there.

Surprise!

[faedle]

Customers want to pay a cheaper rate for phone calls. Imagine that!

Wouldn't it be great if we had a defacto monopoly that made sure that there was adequate revenue from long-distance calls to subsidize local service in rural areas, so that it wouldn't cost $300 per month to have a telephone? High-volume users would, of course, be paying for all the infrastructure to complete calls. It might even have side effects, like if phone calls were more expensive it might cut down on telemarketing (because it would be less profitable). There'd be a lot of accountability in the system by default, as one company would be in control of all aspects of the call. If something broke, the customer had one number to call (hey, maybe make it an easy to dial number like 611 or something!), regardless of whether the problem was with their instrument, their local loop, or a trunking problem on the long distance lines. We'd need, of course, to regulate this company to ensure that they don't use their monopoly power excessively. But the upside is, this company could be (in effect) a research and development powerhouse. Who knows. This company might even do something radical like invent microelectronics as we know it, or create a powerful operating system that everybody emulates.

Wait.

Re:Surprise!

[rmdingler]

I've always thought there should be a mod for crafty.

Re:Surprise!

[RR]

But the upside is, this company could be (in effect) a research and development powerhouse.

Ah, I remember the days. The tail end of them, anyhow. On the one hand, AT&T was a major sponsor of research. On the other hand, they had a low tolerance for innovations in communication that did not come from them. Remember Carterfone? There's a reason the Internet was not developed by AT&T and their friends at the ITU.

Back then, long-distance phone calls were rare, and overseas phone calls were shunned for their huge expense. There's a reason the corporate masters of AT&T decided to hang onto the long-distance business when they were broken up. But with deregulation, long-distance phone calls have become affordable, and we don't even think twice about calling across the country.

I'm not sure what would have been better. On the one hand, the Internet has been hugely innovative. On the other hand, 2001 was supposed to give us video phones from AT&T, but the proliferation of standards (H.323, SIP, AIM, Skype, Jabber, FaceTime, et cetera) has certainly not given us ubiquitous video calls. I guess I could console myself with the thought that AT&T would have made video calls so expensive that I wouldn't have been able to afford it, anyway.

RTFA

[Anonymous Coward]

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:RTFA

[Anonymous Coward]

"Free Nationwide Long Distance Plan". read that again. You are saying it is ok for Verizon to sell a "Free Nationwide Long Distance Plan" and then refuse to route certain calls because it is to expensive.
I call that fraud. It is bait and switch. They can either not sell the plan at all or increase the price of it to cover their costs.

Re:RTFA

[Waffle Iron]

No, the actual fair and correct solution is:

3. Rural customers' bills are increased to the point where they cover the extra costs for small-scale operations and more miles of wire per house. This may mean charging the rural customers per-minute for incoming long distance calls.

Telcos from the boonies then have the funds so they can afford to charge their peers reasonable market rates for routing calls. Calls don't get dropped anymore.

Re:RTFA

[Anonymous Coward]

"Free Nationwide Long Distance Plan". read that again. You are saying it is ok for Verizon to sell a "Free Nationwide Long Distance Plan" and then refuse to route certain calls because it is to expensive.
I call that fraud. It is bait and switch. They can either not sell the plan at all or increase the price of it to cover their costs.

No I'm not OK with it. It is fraud, but Verizon et al are perfectly OK with it. Their wireless divisions are also OK with limiting "Unlimited" service.

Re:RTFA

[DarkOx]

Right in this case its not the rural customer that is being subsided here. They are paying for their service, and their operator is providing termination to other carriers. Its these other carriers who don't like the rates. The problem is they want to offer unlimited nation wide long distance dirt cheap. Well then they either need to charge more or eat some margin when customers make high cost calls to rural telephone operators.

The problem is not the folks in BFE, it Jr. in NYC is not willing to pay the costs to make a call there, or is carrier isn't.

Re:RTFA

[DarkOx]

Why is more reasonable to charge loop customers more but not carriers? Seriously if Verizon and AT&T want to offer sell unlimited nation wide LD they should either build out the last mile infrastructure themselves or pay the MARKET rate for call termination in that area.

Re:RTFA

[Waffle Iron]

Because those *particular* loop customers, who are way out there in the boondocks, cost more to connect to. The people out there enjoying all that open space and fresh air should pay the higher cost of their lifestyle choices themselves.

AT&T and Verizon don't need to buy anything from anyone if they don't want to.

Re:RTFA

[TClevenger]

"Free Nationwide Long Distance Plan". read that again. You are saying it is ok for Verizon to sell a "Free Nationwide Long Distance Plan" and then refuse to route certain calls because it is to expensive.

I call that fraud. It is bait and switch. They can either not sell the plan at all or increase the price of it to cover their costs.

I'm not sure why phone companies get a pass. Unlimited long distance that isn't unlimited, unlimited data that isn't unlimited. If the FCC isn't going to step up and nail these companies for false advertising, maybe the FTC should.

Re:RTFA

[DarkOx]

The do if they want to connect calls for their customers to those loops. If they can't offer unlimited flat rate long distance, they should not do so. I don't see why you feel the local telco operators should be forced to structure their revenue in any particular way.

Just like makers of safety razors sell the bodies cheap because they know they can get the revenue from the blades, all these local carriers are doing is selling loop cheap because they know they can charge enough to cover their costs for call termination.

The bigger carriers are just being dishonest by dropping the calls. They either need to tell their customers we can't give you flat rate because our own cost structure is not flat. When you want to call Nowhereville population 64, its going to be a few bucks more an hour because thats what the telephone operator there charges. Otherwise they need to eat the cost or tell their own customers they won't terminate the calls as why. They could encourage them to write and suggest they encourage their local carrier to revisit their pricing structure.

You seem to think the person paying for the destination loop is the customer where LD is concerned and its not true.

Re:RTFA

[Waffle Iron]

I don't see why you feel the local telco operators should be forced to structure their revenue in any particular way.

A company choosing not to deal with you because you're overpriced is not forcing.

The bigger carriers are just being dishonest by dropping the calls.

Look again at the fine print in your service agreement; I just did. They clearly state that they don't guarantee that any service they provide will actually work at all, and you have no recourse if it doesn't.

They're obviously taking full advantage of that part of the agreement in this case. That may be slimy, but it's not legally dishonest. They told you what might happen, and if you don't like it, you don't need to sign up with them.

Like I said, if the overpriced rural telcos don't want to get their calls dropped, they need to figure out how to operate while charging NATIONAL market rates to connect. The only logical way to do that is charge the people who choose to make themselves hard to get to for the extra costs.

Of course in the real world, this won't happen. The rural telcos will cry to Uncle Sam that they're being abused. Then they'll probably convince the congress that's been gerrymandered to over-represent rural districts to impose government-decreed social engineering on this market, yet again force the urban population to subsidize the lifestyle of rural phone users.

Re:RTFA

[DarkOx]

I never said what the big carriers are doing is illegal, I said was dishonest. If they don't have the intention of terminating calls anywhere the rates are higher than the norm I think dishonest be marking "unlimited flat rate LD to anywhere", even if they have legally covered themselves with some fine print. Unlimited flat rate LD is what presented in the audible component of the television spots and the readable type face on the shiny mailers.

They should either drop the anyway or the flat rate part, of the pitch if they really want to be what I would call forthright. I am not naive though I don't really expect anyone's advertising to be exactly forthright; and I do think we should keep our standard of business buyer beware, if someone fails to read the fine print its their own damn fault.

I still disagree with you on the economics of who should pay for what. I don't have a dog in this fight but I used to live in place that had a rural bell operator. If you put the added costs on the loop side, than heavy users get subsidized by light users. I did not receive all that many LD ( it was expensive for everyone back then ) calls from friends or family, but it was sure nice to be able to do so. Had loop costs been higher I'd probably have done without a line (pay phones still existed then so I could have made the occasional call from Main St). Local calls were of little use either, frankly you went downtown for one reason or another pretty much every day and when its sub 10min walk from one end of town to the other, you don't need to "let your fingers do the walking", want to know if a shop or business can take care of something for you? might as well walk in and ask.

Frankly I think its much fairer and more sensible to draw as much of the required revenue from tariffs on inter-exchange calls. That way it stays cheap for everyone to have a loop. If loop costs get to high people would drop service; pretty soon you'd have no end points to terminate calls at. Charging more for loop makes no sense for a local bell, as it actually degrades the usefulness of the system.

Finally I don't think this is a case of city folk subsiding rural bell users, its more a case of they (they are placing the call after all) want to communicate by phone with someone in the middle of know where are being asked to pay real costs of doing so, part of which is to maintain a perhaps little used stretch of copper across the last 15miles making it possible. Unfortunately rather than using a little intelligence and computerization to jump in an say something to the effect of "This is a hard case call termination, there will be an additional 3c/min surcharge do you wish to continue) the call just gets dropped. Seems like a problem as much with the oligopoly of a few big national carriers, as with the monopoly that the local bell operator might be.

The real victims are the customers

[Anonymous Coward]

I work for a small rural telecom, and we deal with this issue quite literally every week. Someone who lives out in what most would consider the middle of nowhere, ends up having a call completion issue. And who do they blame? Their telephone company, of course. After all, we provide the telephone service, and people assume that a paid service is supposed to just work. Telling these people to move back to a city is ridiculous also, as many of them are running farms or performing other (sometimes astronomy related work in my state) tasks that can't be done in a city.

The real problem is that long distance providers often don't want to even work with us on the issue. We can call up CenturyLink, for example, and they will tell us that they're unable to work with us directly. We have to tell person A, who initiated the call that person B was unable to receive and is complaining about, that they need to complain to CenturyLink. The person who initiates the call that did not go through properly has to initiate the complaint. And why would they do that, since they're able to call everyone else without issue? Clearly person B has an issue with their service.

In short, it's a giant cluster-f. I'm tired of having to tell people who pay money for their service that some larger telecom can't get its sh*t together. Meanwhile, we check every copper line from the CO to the customer sometimes because we want to give the benefit of the doubt and ensure the customer isn't having another issue, and it comes down to call completion problems. Honestly, I think the FCC should be forcing long distance carriers to pay for the time wasted due to their incompetence. The issue would get fixed a lot faster that way.

Re:The real victims are the customers

[Anonymous Coward]

I would suggest auto-trace every call at dial time so the computer records know where it failed, or at least that it got through your equipment and out the other end.

Re:The real victims are the customers

[Anonymous Coward]

This would work fine if the problem were on our end. The problem is on the other end, the calling customer's long distance carrier doesn't complete the call properly to our exchange. CenturyLink would have to do the auto-trace, and there's no way in hell they'll enable that for every line they have.

The problem is, when we trace the issue on our end, we find that the call was routed to the wrong exchange on CenturyLink's end. If we get CL on the line and work with them, they fix the routing, and the problem goes away for about a week. After that week, the problem reoccurs.

The problem of using Skype

[Anonymous Coward]

Apart from the fact that Microsoft has access to your call history, is that for calls from Skype to non-Skype numbers have to experience what we here in the UK call the 'last mile'.
This is the POTS line that the Telco supplies and are increasling reluctant to support in the USA. Some of my friends live in the boondocks near Ely Nevada. Calling them is pure pot luck. I get through to other friends in Kazakhstan more reliably.

(POTS = Plain old telephone service).

As an aside, BT (The incumbent UK Telecoms supplier) has just replaced all the Poles and All the overhead wires in my street. As a result, my broadband went from 60Mbits to 85Mbits just because the line losses went down from 15dB to 8dB.

What is the solution to this problem for rural/boonies users in the US?
Apart from setting up your own local carrier and encouraging WiMax type cell infrastrucure (and possibly get sued by the likes of AT&T) or even your own microwave links, there is not much you can do.
A close friend of mine own 16K acres about 3 miles south of the nearest highway. He has a microwave link to a relay tower. IT cost him $12K to install. The telco wanted $35K to install a line capable of 19.2K dialup. When the local carrier found out they threatened to sue him for breaking their local monopoly. As he is a retired Corporate Lawyer, they soon backed down. Even so, the endpoint of the link that connects to the relay tower is no longer his property despite him funding it completely.

Spanning Trees

[CyberRacer]

Haven't the telcos ever heard of "Lowest Cost Spanning Trees?". This is what's done in internet routers to prevent exactly the kinds of infinite loops causing the problems there. Spanning trees still provide the carriers with the best available pricing for a given set of call end points over the available routers, but also ensure that infinite loops don't occur within the network, thus providing proper connectivity to the end user.

Re:Spanning Trees

[rtfa-troll]

This is a far more complex situation than that. Much closer to BGP than mere STP

In a simple way; imagine that your neigboring multi-layer router is very well connected but has a memory problem on that means that 30% of the IP packets through it outgoing on certain outgoing ports get lost.

When you build your spanning tree you get what seems to be complete connectivity, however, when your users send connections to destinations which route through those ports on your neighbor router then their connections work terribly.

This is not something which can be solved by the individual other router (first customer's carrier) or end router (the rural carrier); Only by identifying which router is causing the problem. The problem with that is it requires work and is probably not profitable; See the previous AC posting.

I have GMAVT (Waitsfield Telecom) 'service"

[Lawrence_Bird]

Nice people. They try hard. But. Their services are overpriced and not reliable. You are forced into a landline, like it or not, to get dsl. (that landline runs 17.50 plus about 7.50 in FCC garbage which is pretty much what Verizoff charges in other locations). The DSL service is marginal. What is described as 'up to 6 Mbps' is in fact.. (for me) below 3 as the data transmission is unreliable faster than that. Their cable service is.. dreadful? Often goes out of service for long periods. While we all understand the economics of remote/rural telecoms, people should also keep in mind that Waitsfield Telecom has actively fought to keep other providers out of our service area. They could have competition but they have made sure they do not have it. The years of nobody else wanting to try to serve our area are gone over but as customers, we are denied those choices becasue it would likely mean the wend of Waitsfield Telecom.

Re:I have GMAVT (Waitsfield Telecom) 'service"

[Cornwallis]

I'm over the mountain from you in Cornwall and experience about the same thing. (The article from the OP was from our local paper.)

In fact, Shoreham Telephone doesn't exist anymore. It was bought out by OTT from Maine and since then our DSL service has become a bit less reliable at about the same speed as you but with what I suspect is a higher cost. We have ongoing DNS issues now and just have to live with it. We do have the option of wireless service through a co-op (as mentioned above in one of the postings but it is even less reliable than our DSL.)

I am sure it goes back to the time a few years back when Verizon abandoned Vermont rather than invest in the needed infrastructure upgrades to provide 20th Century-grade service!

What scares the hell out of me is how dependent we are (I'm IT in healthcare) on this failing infrastructure. At my office we lose calls all the time and our provider is no help at all. All the new toys are a lot of fun when they work but knowing how this works is the greatest incentive to stay healthy so I won't have to rely on the new electronic records all the healthcare geeks are promoting. I often miss the reliability of the old Bell System!

Re:I have GMAVT (Waitsfield Telecom) 'service"

[Lawrence_Bird]

my understanding is that one of the larger cable outfits wants to go into Fayston and "eastern" waitsfield but GMAVT/WCTC have had a hissy fit and are fighting it tooth and nail. If you recall the discussion a few weeks back about rural internet service, many of these outfits have sweetheart deals from the federal government that gives them substantial cash and it is structured so that they are best to maintain the status quo (someone gave a very good explanation of the money and (dis)incentives. One of these is that they are given exclusive "rights" to an area. Thus competition and alternatives for the customers are not available and the incumbent can offer as good or as bad a service as they like.

toll quality calling

[speedlaw]

I know I'm showing my age, but I really miss toll quality calls. You know, the polar opposite of the typical...hello....it'sssss bbbsx ... ble b. sors and then....s t boob bleeep blorp. So we'll meet then. bye....click

I must be missing something

[CharlieMurphy]

"When they can't get through they'll call us and ask us to check the lines, and we do and they are working properly, so then they'll ask us if we can go out and see if the person is OK because they aren't answering their phone," she says. "And we'll do that because we're concerned, too."

This example seems a bit fishy. Even the local telco can't call their customer, so in this case its just because they aren't answering their phone, not due to routing issues.

mail

[shentino]

Isn't this USF kinda the same idea as the US Postal Service getting a monopoly on mail delivery?

The whole point is to prevent a business from milking the cheap spots and leaving the rural areas out in the cold.

Considering abusive monopoly practices I would love for the phone system to be nationalized just like the mail.

The problem is not least cost routing ...

[GNUALMAFUERTE]

The problem lies with Verizon and AT&T. I speak from a decade of experience working for carriers. Verizon, AT&T and other behemoths actively discriminate against small carriers, by enforcing several policies that make it impossible for them to purchase direct routes. Logic says that a straight line is the shortest path, but in the current state of telephony, it's sometimes prohibitively expensive.

Things Verizon requests for an interconnect:

  - Lots of traffic. The prepaids are huge, that alone eliminates over 75% of all carriers.
  - Proprietary bias. They prefer H.323 and other obsolete technologies. Their H.323 implementation (up to and including codecs) is designed to work mostly with cisco, and is not very asterisk-friendly.
  - If you request SIP as a more rational approach to interconnection, sales will screw with you for weeks. When you finally manage to get authorization for a SIP interconnect, they notify you the traffic quota for SIP is even higher, requiring an increase in the monthly prepaid. Then they just send you an example cisco configuration and a few doc files with misleading information.
  - Then the bureaucracy starts. If you aren't connecting with cisco equipment, and you aren't prepaying shitloads of traffic, they'll drive you insane with red tape.
  - When you go through the cisco file you end up understanding what you need to interconnect with them:
                - They will send and accept traffic from ONLY ONE IP, through an IPSec tunnel. If you require additional IPs, it'll mean another interconnection, and it'll cost you. And, yes, that's right, you have to send your SIP signalling through an IPSec tunnel, then reinvite all media. But they'll only accept reinvites to pre-defined hosts (up to 8), so you can't reinvite traffic directly to your customers, and therefore you must afford all the extra bandwidth costs associated.
                - Of course, getting such a setup to work will require some testing and debugging, which will be extremely hard as their support department refuses to work with you or give you any feedback if you aren't using cisco/nortel/netgear etc. If you are using FOSS, you are SOL.
  - Finally, going through all this steps will take anywhere from 45 to 90 days.
  - Let's say you need to migrate one of your server (common in 99% of all carriers, since they don't own a fucking datacenter, and they collocate their equipment). Or you need to add a new one. Adding a new server will take at least 30 days. Just changing the IP address of one of your servers will take ~15 days.
  - Even after you've got everything working, they'll do stuff such as sending you an email saying they'll discontinue the platform you are working on in 15 days, and you need to migrate. Or you need to stop using a particular codec. Or you need to change some other arbitrary thing. That'll, again, make you loose traffic, and therefore money.

AT&T, BT, and all other industry behemoths have similar practices. Some will even force you to collocate equipment at their locations. This means It's extremely expensive for small carriers to purchase directly from them. So they buy from other carriers. But again, this other carriers are still too small to purchase directly from the actual Tier-1 bastards, so they purchase from somebody else too. In the end, It's cheaper to buy from some small provider that is still bigger that still has 2 or 3 hops before getting to the big guys than purchasing directly from them. That is Verizon's fault.

So, yeah, you end up purchasing from some carrier with huge latency, and poor peering, but he offers you a simple IAX2 trunk right away, you can send traffic from any IP, you can just call support, and there are no traffic quotas. You can just prepay through paypal as you go. And that's better than having to deal with verizon.

This is just one of many reasons why I don't work on telephony anymore, and one of the reasons I try to call PSTN lines as little as possible.

This guys are hypocrites, blaming others when they are the only ones to blame.