Traffic Pumping

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: "Savage, Christopher" <ChrisSavage () DWT COM>
> Date: November 30, 2009 10:27:21 AM EST
> To: CYBERTELECOM-L () LISTSERV AOL COM
> Subject: Re: Traffic Pumping
> Reply-To: Telecom Regulation & the Internet <CYBERTELECOM-L () LISTSERV AOL COM 
> >

> This is one of the fundamental problems with regulating prices.   
> Prices
> send signals to profit-motivated players.  If regulators allow me to
> charge [x] for some activity and my cost to do it is [x-k] the only
> rational business response is to do everything I can to encourage the
> activity to occur.
>
> It follows that any activity on the part of a regulated company to
> encourage an activity for which there is a regulated rate, is
> near-conclusive evidence that the rate is too high.
>
> Back in the day, we at Bell Atlantic solved this problem for  
> intrastate
> access fees in a simple way.  It would work as follows:
>
> 1.  The RLEC has to state its costs of providing access service.   
> Let's
> say it is $1,000,000.
>
> 2.  Look at last year's access business for the RLEC.  Let's say that
> 40% of the minutes came from AT&T, 40% from Verizon, 8% from Sprint,  
> and
> 2% from everybody else.  Then AT&T and Verizon each cut the RLEC a  
> check
> for $400,000, Sprint coughs up $80,000, and everyone else comes up  
> with
> $20,000.
>
> In other words, the number of (today) chargeable access minutes don't
> get charged on a per-minute basis; instead they simply are counters to
> determine what proportion of the RLEC's cost each user of access
> services has to pay.
>
> Any reason why this wouldn't work to end traffic pumping?
>
> Chris S.
>
> -----Original Message-----
> From: Telecom Regulation & the Internet
> [mailto:CYBERTELECOM-L () LISTSERV AOL COM] On Behalf Of Charles Jackson
> Sent: Monday, November 30, 2009 10:04 AM
> To: CYBERTELECOM-L () LISTSERV AOL COM
> Subject: [CYBERTEL] Traffic Pumping
>
> Traffic pumping has come up from time to time on this list.  A recent
> FCC
> Order (24 Nov) sheds some light on these practices.
>
> See http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-103A1.pdf
>
> Here's an interesting quote:
>
> In 2005 and 2006, Farmers entered into a number of commercial
> arrangements
> with conference calling companies for the purpose of increasing its
> interstate switched access
> traffic and revenues. Under the agreements, conference calling  
> companies
> sent their traffic to
> numbers located in Farmers' exchange and, in return, Farmers paid the
> companies money or other
> consideration. The agreements resulted in a substantial increase in  
> the
> number of calls bound
> for Farmers' exchange. As a result, the amounts of Farmers' monthly
> bills to
> Qwest for
> terminating access charges rose precipitously.
>
>
>
> Chuck



-------------------------------------------
Archives: https://www.listbox.com/member/archive/247/=now
RSS Feed: https://www.listbox.com/member/archive/rss/247/
Powered by Listbox: http://www.listbox.com