Washington, D.C. - April 7, 2004 - The National Exchange Carrier Association (NECA) today held a telecommunications industry conference that identified so-called “phantom traffic” (phone call and other traffic that cannot be identified or classified for billing purposes) as a serious problem that must be solved now.

It is estimated that 20 percent or more of telephone call minutes processed by some end office switches cannot be billed. Sometimes this is because the originating carrier (the one who owes the payments) cannot be determined or it isn’t always clear what charges apply. In other cases there are carriers who refuse to pay their bill thereby evading their access charge obligations. It is believed that this “phantom traffic” could represent hundreds of millions of dollars of lost revenue to local telephone companies.

During the conference, panels of industry experts debated different aspects of the problem, including:

• Technical tools available to analyze traffic, quantify the problem, and identify originating carriers;
  
  

• Sources of “phantom traffic” and differing industry interpretations on the application of FCC compensation rules to varying call scenarios;

• Examples of legal, regulatory, and tariff solutions that have been used successfully by some LECs. 

Conference participants also stressed that although the purpose of this conference was to focus on short-term solutions, phantom traffic also must be dealt with in the long term as the intercarrier compensation issue is debated.

Although bill and keep is often mentioned as a potential long term solution to intercarrier compensation and phantom traffic issues, implementing such a regime would significantly harm rural telephone companies by eliminating all carrier charges (an estimated $2 billion plus in state and interstate access revenue) and placing the burden for cost recovery on rural consumers.  Conference participants agreed that, as part of any new system, rural companies must continue to be compensated for the use of their networks by carriers as they are now.