Rural Carrier: Traffic Pumping Isn't Easy Issue

Members of the U.S. House of Representatives Energy and Commerce Committee expanded their investigation into so-called voice traffic pumping schemes this week, by sending a series of questions to 24 small telecom providers accused of the practice.

But executives with one small carrier targeted by a committee letter say they're confused about why lawmakers are investigating a practice that's perfectly legal.

Executives with Aventure Communications, based in Sioux City, Iowa, also questioned why the committee is conducting its own investigation of the practice, sometimes called access stimulation, when the U.S. Federal Communications Commission has an open notice of proposed rulemaking on the issue.

Small carriers that partner with free conference calling services and share the access fees are providing a legitimate product, said Tim Jenkins, vice president at Aventure. "It's a very well-known practice that's gone on for years," he said. "The [large carriers] three or four years ago decided this was their ultimate issue."

Aventure, started in 2005 to provide broadband service to rural areas near Sioux City, has provided lines for conference calling services, added James McKenna, Aventure's president. "We follow the rules," he said. "If they want to change the rules, change them, and we'll follow those rules, too."

Large telecom carriers, including AT&T and Qwest Communications International, have been complaining about traffic pumping for more than two years. The practice, as described by the large carriers, takes advantage of high access charges -- the fees telecom carriers charge each other for carrying each other's traffic -- billed by some small carriers.

Some rural carriers have partnered with free conference call services and adult chat lines to drive traffic to their networks, the large carriers have complained. The small carrier then bills the larger carrier for the traffic that comes from its network, based on inflated access charges, AT&T, Verizon and Qwest have said. The small carrier then shares profits with the conference call or chat line services.

AT&T in 2007 complained that some rural carriers were charging larger telecoms access charges as much as US$0.13 a minute.

The committee letter, signed by Chairman Henry Waxman, a California Democrat, and two other senior lawmakers, said they've heard complaints that some rural carriers are charging access fees "well in excess of what the market would typically demand."

In addition, large telecoms have alleged that some rural carriers "engaged in practices designed to increase call volumes and access-charge revenue do so by providing free calling services for indecent or pornographic content," the letter added.

Although Aventure responded to a request for comments on the lawmakers' letter, executives from three other small carriers sent the letters did not respond to voice mails seeking comment.

But the disputes over access stimulation aren't quite that simple, McKenna said. Although at least two large telecoms told the House Energy and Commerce Committee that they have access-charge disputes with Aventure, his company bills the same access-charge rates as the National Exchange Carrier Association (NECA), an organization representing many small carriers that negotiates access charges through the FCC.

NECA provides the standard access-charge structure for small carriers, and through a process at the FCC, large telecoms can challenge those rates when NECA proposes them each year. Some small, incumbent carriers chose not to participate in NECA and instead charge their own rates, but as a competitive local exchange carrier, or CLEC, Aventure must set its access rates no higher than surrounding incumbent carriers, McKenna said.

All this means Aventure, although it does partner with some conference calling services, can't collect exorbitant access charges that the giant telecoms say fuel traffic pumping schemes, McKenna said.

Aventure is simply using the resources it has to run a business, McKenna said. "It's just like you taking advantage of a tax break," he said. "The [large] carriers don't like it. They want everything for themselves, and nothing for anyone else."

Even if Aventure charges the NECA rates, it's still taking advantage of rates designed to compensate low-volume rural carriers, countered Steve Davis, Qwest's senior vice president for public policy and government relations.

"If they're saying, does Qwest want to share revenues with porn providers or conference calling providers, then no," he said.

Davis called Aventure's arguments "complete nonsense." Traffic pumpers are gaming the system, he said.

"What they're doing is they're charging high rates to terminate calls, and then they're artificially manufacturing extraordinary volumes for either porn services or free conference calling services," Davis said. "The NECA rates were set with an anticipation of this being a rural area with high costs and low volumes. They're keeping the extremely high rates, but increasing the volumes to extraordinary levels."

In August, the Iowa Utilities Board found traffic pumping practices illegal at several small carriers, and the FCC has ruled against one carrier's practice, he noted.

"It's a scam," Davis said. "Just because no one's ... caught them yet doesn't mean what they're doing is appropriate or lawful."

Davis cheered the House committee for looking into the issue. The FCC has an open notice of proposed rulemaking on access fees, but the agency opened the notice in October 2007 and has not taken action yet.

"I support any investigation into this conduct," he said. "The more facts that come to light, the more light that's shed on this behavior, the simpler it will be to address it."

The committee first began looking into traffic pumping after Google, in late 2009, announced that its Google Voice service would block calls to some rural telephone numbers because of high access charges. AT&T then accused Google of violating network neutrality principles, even though the search engine provider has pushed for net neutrality rules for broadband providers.

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