Rural Telcos Grapple to Identify Phantom Traffic

“A third of our traffic we are not getting any compensation for” because UTC cannot identify the originating carrier, says Bivens, who dubs the unbillable calls “phantom traffic.”

Bivens is dealing with a relatively new problem. He says BellSouth Corp. stopped paying UTC last summer for terminating calls, telling the Tennessee telco it needed to directly bill the wireless carriers and CLECs originating the traffic.

Many calls bound for rural Tennessee are routed through a BellSouth tandem switch before they are passed on to the independent phone company. But Bivens, former chairman of OPASTCO (Organization for the Promotion and Advancement of Small Telecommunications Companies), says BellSouth previously paid UTC the tariff rates for terminating such calls.

“I don’t have a problem with billing the [originating] carrier,” he says, “so long as I know who the carrier is.”

Bivens is not alone in dealing with this problem. Consultants say rural phone companies in other parts of the country can’t identify the originating carrier for a significant portion of the traffic they terminate.

Bill McBride, vice president of regulatory analysis with Fred Williamson & Associates Inc. in Tulsa, Okla., says his firm has conducted studies in Arkansas, Kansas and Oklahoma that show independent phone companies can’t identify which carriers to bill for 3 percent to 10 percent of all the traffic they terminate. This has always been a problem to some extent, McBride says, but “it has increased dramatically in the past few years.”

Consultant Glenn Brown, president of Chandler, Ariz.-based McLean & Brown, agrees. He says because carrier identification and records are missing, “We’ve got an intercarrier compensation system that is on the brink of becoming dysfunctional — if [it’s] not already.”

Some companies allege their peers have intentionally stripped or manipulated call detail records to avoid paying local phone companies access fees. Last year, MCI’s biggest rivals accused the No. 2 long-distance phone company of bilking them out of millions of dollars in access charges by manipulating or abolishing call detail records, including the automatic number identification (ANI); and by routing long-distance traffic over trunks only dedicated to carry local phone calls. MCI said an internal investigation revealed no foul play. The U.S. Attorney’s Office and FCC are investigating the matter.

“I think it would be fairly easy for the FCC, for example, to remind people if you do tamper with the label of an interstate message you are tampering with interstate commerce and that’s a crime,” Brown says.

Says McBride: “My guess is [caller ID information] is being intentionally removed in a lot of cases, but we have difficulty proving that.”

Fraud aside, experts cite other reasons why local phone companies frequently can’t identify which carrier originates a call. For example, Bivens says some CLECs don’t have carrier ID codes. And Mike Harper, project manager for business intelligence with BellSouth, says wholesale carriers sometimes don’t pass along call detail records. Harper says BellSouth can’t identify the origin of 20 percent of its traffic.

About four years ago, BellSouth acquired a system to detect more accurately where its calls were originating. BellSouth previously depended on carriers to tell the company what percentage of traffic was interstate. “We knew that some of the carriers were not totally accurate in the percentages they gave us for the traffic,” Harper says. “We are not trying to collect more than we should have.We are just trying to make it right.”

Mark Gailey, president and general manager of Totah Telephone Company in Ochelata, Okla., says he can’t bill other carriers for 568,000 minutes a year because he doesn’t know where the calls originate. Assuming traffic is billed at two cents per minute, he calculates Totah is losing more than $11,000 a year. That doesn’t look like a monumental loss but “we are a small company,” Gailey says, “and that number is growing everyday.”

The unidentified traffic is routed through SBC Communications Inc. before it is passed along to the rural phone company. Gailey says Totah used to have an agreement with SBC by which it would bill SBC for unidentified traffic. That agreement is no longer in effect.

“It’s amazing, this problem reared its head after that agreement expired,” Gailey says.

Consultant McBride says he is seeking to persuade SBC to help rural phone companies identify the phantom traffic. “To date, they say they are willing to work with us,” McBride says, “but we haven’t made a lot of progress toward that.”

SBC spokesman Dave Pacholczyk says the company has told other carriers it is willing to help them locate where traffic originated. He says it’s possible some traffic destined for other local carriers may be coming to SBC over local trunks. “We’ve already told carriers that think they’re getting toll traffic from us over local trunks to let us know, and we’ll be willing to cooperate with them to ID the source of any such traffic so they can take steps to collect what they believe they’re owed for terminating access,” Pacholczyk says.

“Meantime, we’re championing state legislation to press for correct ANI to be passed along so we and other ILECs can identify the traffic correctly,” he adds. “Getting the offending carriers to the table may be another issue, but we’re willing to help since we’re in a similar situation.”

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