With new reporting requirements, FCC begins effort to crack down on rural call impairment.

Acting with impressive speed (a mere nine months after issuing the underlying Notice of Proposed Rulemaking (NPRM)), the FCC has adopted new rules designed to increase its ability to monitor, and correct, the “frequent and pervasive” problem of failed telephone calls to small towns and rural areas. The new rules mark an important first step toward safeguarding the integrity of our nation’s telecommunications network and protecting the consumer’s right to communicate without service provider interference or intrusion. The FCC has done the right thing, giving priority to the rights of consumers to have their calls completed without interruption or degradation.

The new data collection and reporting requirements – adopted in the face of extensive lobbying by large telephone companies seeking exemptions that would have rendered the new rules useless – should provide the FCC with the tools to uphold the social compact between carriers and consumers. In the words of the new FCC Chairman Tom Wheeler, the Commission is looking to “make networks work for everyone.”

Whom do the new rules apply to? “Covered Providers” – defined here as any provider of long distance voice service that makes the initial long distance call path choice for more than 100,000 domestic retail subscriber lines. So long as the 100,000 line threshold is met, a Covered Provider can be an ILEC, CLEC, interexchange carrier (IXC), CMRS provider, or a voice over Internet protocol (VoIP) service provider – both one-way and two-way VoIP. (Some VoIP providers argued that the FCC didn’t have the authority to impose rules on them; the Commission rejected those challenges.)

Contrary to the FCC’s original proposal, a Covered Provider can be a reseller (as opposed to the first facilities-based long distance carrier involved in the call). For example, if the first facilities-based IXC that receives a call from the calling party sends all calls to a reseller which decides how to route the call, then the reseller is the Covered Provider; in that example, the first facilities-based IXC would not be required to submit the reports. 

However, any originating long distance voice service providers that (a) serve more than 100,000 domestic retail subscriber lines, but (b) are not required to file quarterly reports, must still file a one-time letter with the FCC explaining that they do not make the call path choice. The letter must also identify the providers to which they hand off calls. This one-time letter must be filed with the FCC by the time Covered Providers begin to record the required call attempt data; the letter must be served on the provider identified in the letter as having the reporting obligation.  

What will Covered Providers have to do when the new rules take effect? Record, and retain for six months, information about each intrastate and interstate call attempt to a rural incumbent local exchange carrier (ILEC) operating company number (OCN). The information to be recorded includes the identity of any intermediate provider to which a call is handed off, but it does not include information regarding call attempts to customers of non-rural ILECs, competitive local exchange carriers (CLECs), commercial mobile radio service (CMRS) providers or VoIP.  

On the first day of the month that is at least 20 days after the new rules become effective, Covered Providers must begin recording the call attempt data required by the new rules. Once per calendar quarter, they must then electronically file with the FCC a report containing call attempt data for each month in that quarter. (An officer or director of the provider must certify the report’s accuracy.) A template of the mandatory report showing the specific data and cause codes that must be reported is attached as Appendix C to the FCC’s Report and Order

To ease the reporting burden, the FCC will itself calculate answer rates from the reported data. (The Commission had originally proposed that the reporting entities should perform those calculations.) 

In addition, the FCC adopted a new rule that prohibits any audible ringing from being sent to the caller before the called party has been alerted by the terminating provider.

What safe harbors are available?  In its NPRM the Commission proposed two safe harbor provisions which, if adopted, would have exempted most major Covered Providers from the new requirements. In the final rules, the FCC has significantly reduced the scope of one of the proposed safe harbors and has rejected the other. And even carriers qualifying for the single remaining safe harbor will still be required to file quarterly reports with the FCC for one year. Covered Providers that qualify for the safe harbor are also still required to retain information regarding each call attempt to a rural ILEC OCN.

To qualify for the single safe harbor adopted by the FCC, a provider must certify on an annual basis that it either does not use any intermediate provider or that all of its contracts with intermediate providers allow a call to be handed off to no more than one additional intermediate provider. Providers of terminating tandems do not count as intermediate providers. Contracts must permit disclosure of the identity of all intermediate providers to both the FCC and the terminating LEC. 

In addition to this single safe harbor, the FCC also indicated that it will consider waivers of these new rules on a case-by-case basis. A vigilant review of such waiver requests will be necessary in order to avoid undermining the new rules with widespread exemptions. In the “Further Notice of Proposed Rulemaking” (FNPRM) portion of its order, the FCC also seeks comments on whether it should adopt additional safe harbors.

The Commission declined to adopt its original proposal that would have excluded from the data recording and reporting all call attempts to rural OCNs to which fewer than 100 call attempts were made in a single month. Had it been adopted, that exemption would have left unreported as many as 99 blocked calls to each small LEC exchange in any given month.

The FCC also declined to limit reporting to call attempts made during peak periods. Call attempt information regarding short duration calls must also be recorded and retained. In addition, Covered Providers must include auto-dialer traffic in their recording, retention, and reporting. In the FNPRM, the FCC seeks comments on whether it should require separate reports for auto-dialer traffic.

Calls to toll-free numbers and call attempts that are handed back to the upstream provider are excluded from the recording and retention requirements. The FCC also decided not to require recording and retention of post-dialing delay information.

In addition, the FCC adopted a new rule that prohibits any audible ringing from being sent to the caller before the called party has been alerted by the terminating provider.   

What other changes are in the works? Although most of the rural call completion problems appear to be caused by intermediate service providers, such as least cost routers, the FCC did not apply the new reporting obligations to intermediate providers. Instead, in the FNPRM portion of its latest decision, the FCC has requested comments as to whether to impose those obligations on intermediate providers. The FNPRM also requests comments on whether these new reporting requirements should be imposed upon rural ILECs responsible for terminating the calls that are not being properly completed. (The deadline for filing comments has not yet been set. Check back here for updates.)

What happens next? Once the required reports have been submitted for the first two years, the FCC will analyze them and release the results (although only aggregate data will be disclosed).   Covered Providers will be able to ensure that their respective reports will be kept, at least initially, confidential simply by requesting such treatment. (The Wireline Competition Bureau will issue a public notice instructing filers how to do this.) This approach is considerably more streamlined than the ordinary process for requesting confidentiality set out in Section 0.459 of the rules. However, if the Commission receives a request for public release of a particular report (or decides on its own to propose such release), the reporting entity will be required to jump through the Section 0.459 hoops, which require extensive explanations justifying confidentiality.

After three years, the FCC will initiate a proceeding to determine whether the reporting requirements should remain in effect or be changed. (The FCC rejected a specific sunset date for automatic expiration of the rules.)

There is room for improvement to the new rules – for example, intermediate providers could be required to file reports – but the FCC’s Report and Order still marks an important step forward toward identifying, and ultimately eliminating, the sources of call completion problems plaguing rural areas.