Level 3 to Pay Close to $1 Million, Meet Quarterly Call Completion Benchmarks

Level 3 agreed to make three $325,000 “voluntary” contributions to the U.S. Treasury over the course of a year. The 5 percent benchmark is effective “immediately.” Beginning Oct. 1, if Level 3 fails to meet the quarterly benchmark, it “shall make an additional voluntary contribution” of $1 million, the consent decree said (http://bit.ly/Yq83Sw). Level 3 will be required to hit the quarterly quality benchmarks over a two-year period. If it can’t meet that standard, its obligations under the consent decree would end within three years. Commissioner Mignon Clyburn called the consent decree “a big step in the right direction,” and said she looked forward to concluding the pending NPRM requiring collection of call completion data (CD Feb 8 p8).

The bureau is “aggressively pursuing this problem wherever it leads,” Enforcement Bureau Chief Michele Ellison said of call completion problems. State and telco officials have told us those problems have continued in recent years, even as the commission reminded telcos that rural calls must get through (CD April 16 p3). There are “significant consequences for those companies that are not fulfilling their obligations to rural America,” Ellison said. She praised Level 3 for committing to “tackle this issue head-on."

Level 3 agreed to develop “scorecards” for the intermediate companies the data and phone-call backbone provider uses to route calls. The scorecards will assess their performance in areas of post-dial delay in connecting calls, network failure and call completion rates. Level 3 agreed to identify “problematic routes” to those intermediate providers on a monthly basis, stop using poorly performing intermediate providers, and help the bureau with other investigations by providing data on intermediate providers’ performance. “Intermediate providers” are “sometimes referred to as ‘least cost routers,'” Ellison said in the consent decree. Least-cost routers are often blamed as the parties most directly responsible for poor call completion rates (CD May 18 p5).

Level 3 called the investigation an “opportunity to work collaboratively with the FCC on this important issue.” General Counsel-Regulatory Policy Michael Mooney said in a news release that the company has long advocated for “clear and measurable standards” for the voice industry, and said the agreement was “a solid step in the right direction.” Shaun Andrews, senior vice president-global voice services, said the new standards would “be reassuring to rural consumers,” and encouraged other providers to “follow our lead and commit to achieving similar high call performance standards."

For many rural observers, that 5 percent standard isn’t enough. “I am very concerned about the 5 percent difference between rural and non-rural call completion,” said Denny Law, general manager of Golden West Telecommunications. The South Dakota telco has long had difficulties with incoming calls not completing properly. “I don’t know of any technological reason for the 5 percent disparity,” Law said. “I am concerned that it will still result in a large number of calls not completing to rural consumers.” Law worries what will happen to call completion rates over the next nine months, given that Level 3’s first report to the bureau isn’t due until the end of January 2014. Law hopes that ultimately the FCC will “eliminate any disparity” between rural and urban call completion rates, but called the enforcement action a “positive step."

"Is this painful enough?” asked Brandon Zupancic, vice president-technical operations for Canby Telcom in Oregon. “Well, if nothing else, it puts the rest of the carriers on notice that the Enforcement Bureau is taking rural call completion issues seriously, and that alone will probably shape carrier behavior,” he said. “We'll have to wait and see the extent.”

The 5 percent benchmark sets a floor for rural call completion performance, an FCC spokesman said. The commission expects Level 3 will significantly exceed that standard to avoid the risk of getting dinged $1 million each time it fails to meet the benchmark, he said. Large disparities between rural and non-rural call completion rates are avoidable, but small disparities are not, the spokesman said. The agency defines the rate of call completion as the number of calls answered divided by the number of call attempts. That rate includes calls that a recipient ignores or can’t get to, so it would be highly unusual to have a perfect call completion rate, said the representative.

The investigation into Level 3 started over a year ago, when the bureau asked Level 3 for information about its performance completing long-distance calls, the consent decree recounted. Level 3 told the bureau it didn’t keep such data “in a manner conducive to useful production,” but it worked with the bureau to collect data showing call attempts and completion statistics for Level 3 customer calls terminating in rural and non-rural exchanges.

"Level 3 and the Bureau have worked cooperatively for nearly a year to develop a mechanism by which the Bureau can track Level 3’s rural call completion and ensure that Level 3’s performance demonstrably meets the requirements of Sections 201(b) and 202(a),” Ellison wrote in the consent decree. Those sections require nondiscriminatory “just and reasonable” practices in the provision of communication service. “Level 3 has committed to invest capital and other resources in systems and processes to develop and implement a benchmark process for rural call completion,” Ellison wrote.

Senator Tim Johnson, D-SD, said he’s “encouraged” by the consent decree. “Call completion problems threaten the integrity of our nation’s communications network and create serious economic and public safety concerns for rural communities in South Dakota and across our country,” he said. “I will continue exerting careful oversight over the FCC as the agency continues its investigation and will do all I can to ensure these problems are fully resolved.” Johnson was one of the 35 members of Senate who wrote to FCC Chairman Julius Genachowski in December, urging him to closely monitor the practice of least-cost routing and require carrier disclosure of call completion rates (Dec 4 p10).

NTCA President Shirley Bloomfield said she was glad the FCC took “definitive action to demand accountability.” She hopes it’s “the first of many to come as the FCC seeks to send a message regarding the fundamental duties expected of telecommunications providers,” she said. As to the expected 5 percent difference between urban and rural call completion rates, “we believe the FCC’s ultimate objective and the ultimate mandate of the law should be to ensure that reliable service is available equally to all Americans,” Bloomfield said.

Zupancic also questioned whether the 5 percent benchmark is reasonable. “Customers in rural areas deserve the same level of quality and reliability as people in metropolitan areas,” he said. Canby has the headquarters of both American Steel and Shimadzu USA, he said. “Do you think they're any less dependent upon call reliability than any of their competitors?”