Small Iowa Carriers Take Call Blocking Complaints to the FCC, Hill

A group of Ia. LECs and CLECs this week was on Capitol Hill and at the FCC to meet with staffers for all commissioners on their complaints of call blocking by major carriers. The small carriers want the FCC to take emergency action, as in the Madison River case, in which the FCC acted to stop Madison River Communications from blocking ports used for VoIP (CD April 6 p3). AT&T and Verizon, meanwhile, denied the claims, saying the telcos were artificially inflating access fees.

The Ia. carriers have been wrangling with AT&T, Qwest and Verizon, who they say began withholding payment of access charges in late 2006. Seven Ia. LECs filed in U.S. district court seeking collection of the charges. The Ia. companies say as a result, starting in early March, the Bells as well as Embarq began to block traffic headed for the rural LECs.

“We are faced with patently unlawful action conducted against us and other rural LECs by the country’s largest telephone companies,” the companies said this week in a letter to the FCC. Major carriers “continue to block calls to hundreds of telephone numbers assigned to the rural Iowa LECs and to LECs in other rural states,” they said: “This action is causing unprecedented and irreparable harm to rural LECs and their customers.” The Ia. companies said while in recent days the carriers have begun to unblock some numbers, “at the date of this writing, call blocking is still occurring in Iowa and in other rural states.”

The Ia. companies listed examples of charitable bodies they say were affected by call blocking. Big carriers “just don’t play by the same rules,” Ronald Laudner, CEO of Ia. LEC OmniTel Communications, said: “If they were to not pay their bill on the first day it was due and I was to block and every other telephone company was allowed to do that… I think that the disruption in the network would be tremendous. You would see the network go down.”

As many as 2,000 complaints about call blocking have come to the FCC, said Jonathan Canis, attorney for the Ia. carriers, and commissioners’ staff have been receptive and happy to hear the small LECs’ side. The companies believe the law is on their side, he said: “I can give you a list of precedent as long as your arm that says call blocking is absolutely prohibited, thou shalt not call block. What we've got is massive illegal conduct, collusively, by the biggest carriers in the country.”

An AT&T spokesman questioned the Ia. companies’ version of events, noting that AT&T brought up the dispute with the Ia. carriers in an April 4 letter asking the Commission to stop “traffic pumping scams.” “The facts are pretty straightforward,” the spokesman said: “Through misrepresentation, these carriers establish excessive access charge rates and then collude with adult chat and conference calling services to dump extremely high calling volumes to specific phone numbers, and then they split the spoils.”

“The blocking issue is moot. AT&T is not blocking any phone numbers,” the spokesman added: “Our issue was never with our customers but with the underlying regulatory issue - - the unscrupulous carriers and the adult chat and calling services they fund through unlawful kickbacks of artificially inflated access charges. If left unchecked, these scams will impact the ability of every carrier to offer consumers affordable unlimited calling plans.”

Verizon, meanwhile, sent the FCC a letter Thurs. disputing claims by the Ia. carriers. Verizon said the Ia. letter “masks the true nature of the ’traffic-pumping’ operations undertaken by these carriers - schemes that involve deliberate misrepresentations to this Commission in the rural LECs’ tariff filings.”

Big carriers are the victims, Verizon said. “Verizon and other carriers are forced to pay excessive terminating access charges to the rural LECs who, as a result, are able to entice conference and chat-line providers into their jurisdictions by offering kickbacks,” the Bell said: “The rural LECs agree to share a portion of their surplus access revenues with the conference and chat-line providers, which then advertise and market their services as ‘free’ in order to drive up demand. This creates a windfall for both sets of entities.”