FCC issues an order on Least Cost Routing LCR

On October 28, 2013, the FCC adopted a Report and Order and a Further Notice of Proposed Rulemaking (FNPRM) in its proceeding designed to develop rules to address problems in the completion of long-distance calls to rural end user customers.

Call completion has become a significant problem for rural customers served by rate-of-return ILECs who assess high terminating switched access charges. To combat this, IXCs, LECs and VoIP providers often employ intermediate providers that offer to deliver long-distance calls to terminating providers at a comparatively low cost.

Associations representing rural customers have suggested that the call completion problems may arise from the manner in which originating providers set up the signaling and routing of their calls, and that many of the call routing and call termination problems are caused by intermediate providers.

The original call completion NPRM proposed measures to improve the Commission’s ability to monitor the delivery of long-distance calls to rural areas and aid enforcement action in connection with providers’ call-completion practices as necessary. These measures would strengthen the Commission’s ability to ensure a reasonable and non-discriminatory level of service to rural areas.

The proposed rules would apply to LECs, IXCs, CMRS providers, and interconnected VoIP providers.

In its new Report and Order, call providers are required to record, retain, and report rural call completion data to give the FCC the information it needs to investigate the call completion problem. In addition, as soon as the new rules take effect, providers will be barred from transmitting an audible signal to a caller’s handset when the phone on the receiving end of the call is not actually ringing. As a result, callers will not hang up prematurely and providers will get better information about call performance.

The Order also includes a safe harbor provision with incentives for providers to improve their call completion practices and performance.

The Order includes the following provisions:

  • Providers with over 100,000 lines that make the initial choice as to how to rout a call must retain data for six months and file quarterly reports
  • False audible ringing is prohibited (signaling that leads the calling party to believe the phone is ringing at the called party’s premises when it is not)
  • Providers taking advantage of the safe harbor, which incorporates an industry best practice to limit the number of intermediate long distance providers to two, will receive the benefit of reduced data retention and reporting obligation
  • To encourage providers to have all the mechanisms in place to ensure calls to rural areas are completed, such as by meeting all industry best practices, providers will also have the option of requesting waiver to have their retention and reporting obligations further reduced.

The FNPRM seeks industry comments on additional reforms pertaining to autodial traffic, intermediate providers, and other safe harbor options and reporting requirements. We will have more details when the text of the Report and Order and FNPRM are released by the Commission.