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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.'"
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.
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.
"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."
"National Security is the chief cause of national insecurity." - Celine's First Law
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.
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.
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.
----- obSig
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
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.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
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?
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.
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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.
--- Keep the choice with the user..
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.
Sig Battery depleted. Reverting to safe mode.
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.