On October 7 the FCC released a new Report and Order about toll-free access charges, in response to concerns about arbitrage causing inefficiencies and excess costs in the system.
I’ve written before about toll-free traffic pumping, which is one of the FCC’s concerns. They’re also seeing situations where calls are inefficiently routed from rural areas, and sometimes dipped multiple times, simply to increase the costs. These charges are all ultimately passed along to the owners of the toll-free numbers.
The FCC is concerned that business owners and consumers are ultimately subsidizing those carriers engaged in arbitrage – and so they’re changing the rules to remove the incentives.
Their goal is to completely remove compensation for originating carriers, and this report and order took steps in that direction.
So here’s the plan.
- Effective immediately, all originating end-office and tandem switching rates for toll-free calls are capped at their current rates.
- As of July 1, 2021, all intrastate originating 8YY end office access rates that exceed the comparable interstate rates will be brought into parity.
- Tariff will be set at .001 per minute transport access rate.
- 8YY Queries are capped at .004248 per query
- July 1, 2022, 8YY Queries cap reduces to .002224 per query
- July 1, 2023, 8YY Queries cap reduces to .0002 per query
In “approximately three years” the FCC intends for all originating end office access charges to be bill-and-keep. In other words, you won’t receive any compensation for originating toll-free calls.
What does this mean for local carriers?
The over-arching message is this: if you receive compensation today for originating toll-free calls, that’s going to disappear over time – so make sure you’re planning for that.
Therefore, it will no longer be worthwhile to do anything complicated with toll-free calls. If you had found ways to boost your revenue (or were passing your traffic to a SIP carrier that’s giving you unusually high compensation), then know that this likely won’t last for long. So in the future just keep things simple – perform the dip and route the calls accordingly.
It’s possible that you may need to make changes to your billing system to take into account these changes, so be planning for that as the tariffs change.
The FCC anticipates that if you lose justifiable revenue as a result of this, it will be possible to recoup that lost revenue through a combination of access recovery charges and universal service support.
If you want more information, check out the full FCC document or chat to your friendly cost-consultant – i.e. not us. (Every time I read about these billing and financial questions I’m glad that our work is focused on the technical side of things, as these legal documents make my head hurt…)