The Impact of FCC Ruling On 8YY Access Reform

Teliax 8YY Partners,

As I’m sure you’ve heard by now, on October 9th the FCC commissioners voted 5-0 to adopt a report and order that changes the rules for intercarrier compensation on toll-free calls. The rule changes are designed to eliminate 8YY arbitrage opportunities, reduce 8YY robocalls, and incentivize efficient routing by moving 8YY charges towards bill-and-keep.

Here’s a quick overview of the ruling:
• Originating 8YY end office access charges will step down to bill-and-keep over a three-year 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 30 days after publication in the Federal Register.
• Charges for 8YY database queries needed to route 8YY calls will be transitioned to $0.0002 over approximately three years.
• Carriers will not be allowed to charge for more than one such query per call.

For a complete review of the ruling, you can download it here: https://docs.fcc.gov/public/attachments/FCC-20-143A1.pdf

The biggest question on everyone’s mind is “how will this impact our toll-free revenue and cost?” To be clear and upfront, there will eventually be compression on rates paid for 8YY calls. Unfortunately, the FCC did not take steps to control 8XX cost… quite the windfall for IXCs. But wait, there’s still hope. We will work with you through this transition, preserving as much value as possible, leaning heavily on our positive relationships with the largest IXCs (such as AT&T and Verizon). The extent and timing of 8YY rate compression is still unclear at the moment. Teliax has preemptively negotiated blanket commercial agreements which insulate us initially from the changing tariff structure. We anticipate, however, that as rates are compressed by the FCC, the IXCs will push to re-negotiate their agreements.

Teliax is and always has been an innovative and ethically responsible company that strives to provide value to you, our partners. While others have exploited loopholes to the detriment of the 8XX consumer (which many of you are), Teliax has adhered to the rules and intent of the FCC as well as the industry. As such, the IXCs are now looking to Teliax as a trusted partner; not an adversary looking to generate bills which are inconsistent with or subvert adopted routing standards. In addition to filed tariffs and intensely negotiated commercial agreements, we have also worked diligently over the last several years to stand-up 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. We will continue to support this initiative to deliver you the best value.

You have my commitment that all of us here at Teliax and the Toll-Free Exchange will continue to fight for your business. We will communicate honestly and frequently as the situation develops. If you have any questions, please don’t hesitate to reach out to tollfree@teliax.com.

Warm regards,

David

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