Friday, June 6, 2008
Traffic-Pumping Needs a Stompin' ?
Here's an interesting story from USA Today - Long Distance giants like AT&T, Verizon, Sprint and Qwest are upset that some rural carriers are taking advantage of them. How? By using a practice they call "Traffic-Pumping" - routing urban calls to rural areas for the higher fees they generate.
Here's how it works: If a call is routed through a rural telco, the rural company has the right to (and does) charge a high fee for the call to go through their networks. By creating telephone services like adult chat in rural areas, these big companies have to pay the rural operator more for that call to go through. The problem is that these large, urban telcos want to sell unlimited long distance plans and they find it hard to make money if their customers call rural areas.
It sounds like, by doing business the way they are permitted to, rural carriers are interfering with the way the big telcos want to do business now. So they gave this "practice " a sinister-sounding name and went to the government for relief, rather than negotiate or find a new way to market their products.
Big telecoms decry high costs of 'traffic-pumping' - USATODAY.com
Posted by Dan Gallant at 10:20 PM
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Most of the calls only pass through these Iowa telephone companies to a voice over IP gateway to another company in a totally different jurisdiction.
The intent to allow small rurals to charge high access fees was intended to help defray the costs of serving these rural customers.
The calls are not destined for rural subscribers in Iowa. They're just passing through.
In these schemes, it is not the rural customer who is getting the benefit; it is the small telephone company that is making the money by gaming the system.
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