Telcos propose crackdown on phantom traffic

A group of six mid-size telcos have filed a proposal to the FCC urging it to curb what they see as a growing problem of “phantom traffic,” or unbillable minutes riding on their network.

The proposal calls on the FCC to require all carriers to accurately identify, label and route network traffic so that appropriate bills can be created. Phantom traffic often is created when wireless carriers or others send calls onto local carriers’ networks without the proper labeling. For larger independent carriers, the impact is becoming a significant financial issue because they are required to carry the traffic, but have no way of billing it.

The group filing the proposed rules, the Midsize Carrier Coalition, consists of CenturyTel, Consolidated Communications Holdings, FairPoint Communications, Iowa Telecommunications Services, TDS Telecommunications and Valor Telecommunications of Texas. The group has made a point of noting that phantom traffic isn’t likely being created intentionally, according to Bob Rowe, senior partner at Balhoff & Rowe, which is acting as a consultant to the coalition.

“We’re trying to get past the fault question as an initial matter,” he said. “If you have a clear set of rules, and you have a clear conflict resolution and enforcement process, you can go forward. Unless you have clear rules up front, it’s hard to tell what is intentional from what is sloppy.”

Though the coalition isn’t proposing specific rules, its’ filing asks the FCC the require all carriers to transmit accurate and unaltered billing information, forward unaltered identifying information, route traffic based on the Local Exchange Routing Guide and comply with related enforcement provisions.

“There’s a lot in the record before the commission about phantom traffic,” Rowe said. “What we did is operationalize that in a very specific sets of rules. We tried to stay away from the contentious policy issues.”

Specifically, the group didn’t want to add to the debate over inter-carrier compensation, though Rowe said they are suggesting phantom traffic is a resolvable problem and can be used as a starting point toward resolving the issue.

It’s difficult to put an exact cost on phantom traffic, largely because by its nature its unknown traffic, but Rowe said carriers are incurring both the direct cost of carrying the traffic as well as indirect costs.

Carriers are spending significant resources on internal assurance programs, external negotiations and consultants that do forensics on where phantom traffic may be occurring,” he said. “Very often settlement agreements are going to be confidential. So we know what the kinds of costs there are, but it’s hard to put a number on it.”