Tuesday, September 14, 2010

How Traffic Pumping works

Under the regulatory mechanisms of the Telecommunications Act of 1996, wireless and long distance carriers (such as AT&T, Sprint, or Verizon) pay access fees to local exchange carriers (LECs) for calls to those carriers' local subscribers. Rural carriers are allowed by the FCC to charge substantially higher access fees (as high as 10-20 cents/minute) than carriers in more urban areas, based on the rationale that they must pay for substantial fixed infrastructure costs while handling lower call volume.
In order to increase their incoming call volume, and thereby fees owed, rural carriers partner with certain telephone service providers to route their calls through the rural carrier. These services typically include phone sex and conference calling providers, which expect a high volume of incoming calls. Notably, these service providers do not need to establish a physical, local presence in order to route their calls in this way. Many of these companies are actually located in Los Angeles, California. As a consequence of this arrangement, the rural carriers can receive millions of dollars of fees, which they then share with the ostensibly "local" service providers, who are responsible for vastly increasing call volume above typical rural usage.
Many of the rural carriers participating in these schemes are located in Iowa, South Dakota and Minnesota.


No comments:

Post a Comment