[asterisk-biz] DIDX Query

[Alex Balashov]

On 11/05/2010 01:53 AM, Jake Hansen wrote:

> CLECS actually get paid when somone calls inbound to them don't they?
> So yea unlimited inbound makes perfect sense.

Kind of, but there's not a lot that can be divined from that 
generalisation in and of itself.  :-)

CLECs get paid for inbound calls in one of two ways:

1) Reciprocal compensation:  this is an infinitesimal per-minute rate 
paid to them for intra-LATA calls originated by other LECs, flowing over 
tandem trunks built over the CLEC's interconnect with the area ILEC.

Traditionally, the originator is mostly the counterparty ILEC, but other 
LECs and/or mobile operators reaching the CLEC via tandem access might 
pay reciprocal compensation as well.  If the traffic patterns warrant 
it, some CLECs -- particularly Tier 1s -- directly interconnect 
intra-LATA.  Such interconnect costs are often shared and the traffic 
itself is settlement-free.

Reciprocal compensation is often so nominal that both parties choose to 
do "bill-and-keep" and just not bother charging each other for minutes 
over reciprocal trunks, sparing the headache of accounting and billing 
for them.  Bill-and-keep between the ILEC and interconnected CLECs is 
increasingly the norm in ICAs.

Last time you really heard anything about reciprocal comp was in the 
late 1990s, before ISP-bound modem traffic was deemed to be exempt from 
the charges.  The ILECs initially supported reciprocal comp because they 
expected to be net terminators, but some CLECs noticed that they can get 
a lot of reciprocal comp settlement from the ILEC in the other direction 
if they hand out PRIs to dial-up ISPs like candy.  Since the ACD of a 
modem call is usually measured in hours rather than minutes, you can 
imagine how much change rolled in.  The ILECs put a stop to that in 2000 
or so, though.

2) Access charges:  these are the ones you keep hearing about, vide the 
Iowa free conference calling situation, etc.

Access charges are charged by the terminating LEC to an inter-LATA 
hauler (officially an IXC, though the distinction between a traditional 
IXC and a multi-region CLEC with private inter-LATA transport that is 
not regulatorily classified as a traditional IXC ambiguates the matter) 
that brings out-of-area calls in.

If a CLEC receives a long-distance call dumped into its switch 
(typically through the ILEC access tandem) from an IXC that brought it 
in from another originating LEC in another LATA, the terminating CLEC 
bills the IXC access.  The IXC incorporates that into its cost structure 
that is passed onto its originating LEC customer.

The thing about access charges is that in most metro areas (classified 
as "metro" from an FCC perspective, which is much broader than the 
commonsensical notion of "metro") are really low.  From a small CLEC's 
point of view, like "almost not worth pursuing" low.  For metro area 
LECs that opt into the usual NECA tariff, they're just high enough to be 
worth bothering with given a non-trivial amount of inter-LATA inbound, 
but not a significant source of revenue or profitability.  Access 
charges are regulated by the FCC, and the key differentiator is whether 
the terminating area is metro.  The amount of access for small to medium 
CLECs often hits the sweet spot where it's a good candidate for 
outsourcing to third-party CABS billing and collection companies.

Truly rural carriers - RLECs as well as interconnected CLECs in that 
same area - are often exempt from the usual metro access charge 
discipline, and can charge much higher access.  That's where you get 
rural conference calling services in Iowa, as well as a lot of petty 
CABS arbitrage business models based on some degree of profit sharing 
with the terminating RILEC/CLEC.  That's why you can get enormous 
amounts of free or even net-paying DID inventory in provincial places 
nobody calls.

In short, yes, inbound calling is usually a net positive for a carrier 
in some way or another, and at any rate, is definitely not a 
variable-cost net loss.  However, the extent to which this is so is 
highly overblown and does not apply to most carriers and calling areas 
in any significantly noteworthy way, unless the volume involved is truly 
prodigious.  The marginal increase in access revenue must be weighed 
against variable cost increases in numbering resource usage, network 
capacity (for small guys, this can be an issue), administration and 
provisioning overhead (including LNP), bandwidth, etc.

-- 
Alex Balashov - Principal
Evariste Systems LLC
1170 Peachtree Street
12th Floor, Suite 1200
Atlanta, GA 30309
Tel: +1-678-954-0670
Fax: +1-404-961-1892
Web: http://www.evaristesys.com/