An October 9 FCC Report and Order has shifted intercarrier compensation for toll free 8YY calls to a bill and keep system. According to the Commission, this will significantly reduce the level of arbitrage and fraud undermining the current compensation mechanism that has long supported toll-free calling.
The order, as a transitional step, combines separate 8YY transport and tandem switching charges into a single access charge capped at $0.001 per minute. It also transitions charges for 8YY data base queries needed to route 8YY, to $0.0002 over almost three years.
According to Chairman Ajit Pai, “the complex carrier-to-carrier billing system underpinning these services has encouraged robocallers to make massive numbers of illegitimate calls to toll free numbers and enabled other arbitrage practices that have driven up costs for consumers and businesses.”
The FCC also said that this order is another step toward the Commission’s commitment to move all intercarrier compensation to bill and keep. It advised carriers to look to existing mechanisms, such as CAF ICC, to recover lost revenue.
While a bill and keep compensation mechanism for access charges on 8YY calls may not cause serious problems for many ILECs, it could be devastating if – or when – applied to all intercarrier traffic. That level of bill and keep will pose a serious threat to the federal mandate of Universal Service at affordable rates.
