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ILECs Put Long Distance Between Neighbors

A CLEC interested in instituting local phone service wonders whether that local service will be bounded by the extended calling area of the incumbent provider—and in doing so, opens a classic can of worms.

[December 16, 2002]

On the ISP-CLEC discussion list in November, MK posed this seemingly simple question:

"I was wondering if my ILEC (in Illinois), who has an extended calling area of only about 15 miles, will give me LATA-wide calling when it comes time for me to offer local service?"

"Right now they only have about 15,000 people within their Extended Local Calling Area. They charge per call even for people to call their neighbors, and 11 cents per call to call the Extended calling area. Is there a precedent for them not allowing any more of an Extended Local Calling Area than what they offer?"

CW cut to the chase:

"You're not stuck with it unless you are doing total resale."

But lest MK get the wrong idea (that the issue was a simple one), SM elaborated:

"You can define your own outbound calling scope for your customers and charge anything you want at retail. There may be some problem, however, in whether the call is 'local' for recips [reciprocal compensation] purposes, or 'toll.' So be careful you don't end up having to pay the ILEC a lot of access charges for calls from your customer to their customers."

"In addition, the ILECs control the outbound calling scope of their customers. If your NXX is not 'local' to their customers, then the ILEC can impose toll on its customer that calls your customer. They are shameless about doing that."

"One thing many folks are doing is 'virtual' local number service. You get NXXs in each rate center where you expect to send or receive calls and want them to be local. Illinois has allowed this. It does get a bit cumbersome to teach the ILEC's customers which number to dial to get to your customer. While you can aggregate all the numbers to your customer in something like a hunt group, the calling party (ILEC) customer has to know which of several numbers to call in order to avoid toll."

"Theoretically, you could negotiate call scope and recips with the ILEC. But they tend to get religious about this stuff and are not real willing to compromise."

[ed. note: NXX is the exchange, signified by the middle digits of a ten digit number: area code-NXX-XXXX]

This prompted a further question from MK:

"Isn't it possible to negotiate or opt into an IA [interconnection agreement] with local calls not to be charged by VZ [Verizon] or myself?

"It looks as though in Illinois they have this with the 5.01 port charge (SBC area). Couldn't find one with VZ, but I assume it is near the same. With the 5.01 port charge it includes Unlimited Switching. What would this be?"

SM went on to examine some further fine points:

"You are talking about UNE rates and port charges, which tells me you are looking at using the ILEC switch port, most likely as part of the UNE-Platform [UNE-P]. This limits your options somewhat in terms of call scope, since you are using the ILEC's NXXs. But for the most part, the real question pertains to reciprocal compensation and access charges, which is separate from the UNE prices."

"As to the UNE-P, pricing varies. Some ILECs have a usage rate for calls, even local calls. Others do not in large part because they have yet to do the programming necessary to meter and bill 'local' calls between a UNE-P and an ILEC customer that is 'local.' There is often also a charge for tandem switching and tandem transport, usually distance and usage sensitive."

"Be careful, however, to distinguish between charges from the ILEC to you for use of their switching and transport as part of the UNE-P and the compensation one carrier charges another to transport and terminate calls. In the UNE-P environment, the ILEC could charge you a usage rate for the use of the switch port to one of your customers, but then you could charge the ILEC reciprocal compensation for the same call."

"Often there is not a 'wash.' The trick will then be to ensure that you are net payee, not net payor."

— End