The FCC takes a bite out of carriers' 8YY compensation
The FCC takes a bite out of carriers’ 8YY compensation – what does this mean for your business?
We first learned about the FCC’s vote to adopt an order that changes the rules for intercarrier compensation on toll-free calls back in October of 2020. The intention of these changes was to eliminate 8YY arbitrage, reduce 8YY robocalls, and incentivize efficient routing by moving 8YY charges towards a bill-and-keep approach for access charges on toll-free calls.
Carriers who depend on 8YY compensation are now on their own to replace this lost revenue while IXC who are not required to lower rates for their toll-free subscribers are in a position to enjoy a windfall.
Are you prepared for the “Step Down”?
Here’s a quick overview of some of the key points:
- Originating 8YY end office access charges will step down to bill-and-keep over a transition period beginning July 1, 2021, and ending July 1, 2023.
- 8YY originating transport and originating tandem switching fees will be combined into a single nationwide tandem switched transport access service rate capped at $0.001 per minute effective July 1, 2021.
- Charges for 8YY database queries needed to route 8YY calls will be transitioned to $0.0002 over approximately three years.
- Carriers may not charge for more than one database query per call.
How do you preserve revenue? By peering your calls directly with the Toll-Free Exchange.
While this reform creates a great deal of uncertainty and presents an unbalanced impact on toll-free revenue vs costs (the FCC did not take steps to control 8XX costs), the Toll-Free Exchange has negotiated agreements to help insulate cash flow from these changes. This means you can avoid a volatile regulatory environment and preserve your revenue.
Furthermore, we continue to enhance the Toll-Free-Exchange; a completely neutral peering platform that empowers owners of toll-free numbers (Responsible Organizations), to accurately and transparently increase 8YY revenue while simultaneously lowering 8XX cost. In fact, the cost controls guarantee reduction in 8XX cost.
We are committed to providing innovative solutions that create security and stability for your business.
For a complete review of the ruling, you can download it here: https://docs.fcc.gov/public/attachments/FCC-20-143A1.pdf