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10-Nov-2016 06:37

is a controversial practice by which some local exchange telephone carriers in rural areas of the United States inflate the volume of incoming calls to their networks, and profit from the greatly increased intercarrier compensation fees to which they are entitled by the Telecommunications Act of 1996.

Under the regulatory mechanisms of the Telecommunications Act of 1996, wireless, and long distance carriers (such as AT&T, Sprint, T-Mobile US, or Verizon) pay access fees to local exchange carriers (LECs) for calls to those carriers' local subscribers.

AT&T’s complaint alleged that Jefferson violated Section 201(b) of the Communications Act of 1934 because it “acquired a direct interest in promoting the delivery of calls to specific telephone numbers.” AT&T also argued that the access revenue-sharing arrangement with the chat-line provider was unreasonably discriminatory in violation of Section 202(a) of the Act, because Jefferson did not share revenues with all its customers.

The FCC rejected both these arguments and denied AT&T’s complaint.

These services typically include phone sex and conference call providers, which expect a high volume of incoming calls.

Notably, these service providers do not need to establish a physical, local presence in order to route their calls in this way.

The Iowa Utilities Board issued its final order in 2009 in a complaint proceeding brought by Qwest and intervened by AT&T and Sprint Nextel against eight rural telephone companies in Iowa.

Except for one call blocking finding against Sprint, the decision was unfavorable for the rural carriers, which may have to return the fees they received for calls directed to traffic-pumped services by Iowa residents.

In 1996, AT&T filed a Section 208 complaint with the FCC against Jefferson Telephone Company, a rural incumbent local exchange carrier (ILEC) based in Iowa, which entered into a commercial agreement with a chat-line provider.Individual telcos are free to opt out of this process.For the first two years, they are then free to bill interexchange carriers directly at an initially-high rural rate of five to thirteen cents a minute.Many wireless and land line customers now have unlimited long-distance plans, and thus the entire inflated cost of using these services is borne by their long-distance carrier.and has warned that it may have to raise its customers' calling plan prices unless regulators address the issue of traffic pumping.

In 1996, AT&T filed a Section 208 complaint with the FCC against Jefferson Telephone Company, a rural incumbent local exchange carrier (ILEC) based in Iowa, which entered into a commercial agreement with a chat-line provider.Individual telcos are free to opt out of this process.For the first two years, they are then free to bill interexchange carriers directly at an initially-high rural rate of five to thirteen cents a minute.Many wireless and land line customers now have unlimited long-distance plans, and thus the entire inflated cost of using these services is borne by their long-distance carrier.and has warned that it may have to raise its customers' calling plan prices unless regulators address the issue of traffic pumping.As of 2014, IPKall offered "free" Washington (state) numbers to voice over IP subscribers anywhere on the Internet, but chose to discontinue services after May 1, 2016.