What Are 'Intermediate Providers' in the Rural Call Completion World?

The new law defines Intermediate Providers as follows:

The term ‘intermediate provider’ means any entity that—

1. enters into a business arrangement with a covered provider or other intermediate provider for the specific purpose of carrying, routing, or transmitting voice traffic that is generated from the placement of a call placed—from an end user connection using a North American Numbering Plan resource; or (ii) to an end user connection using such a numbering resource;
2. does not itself, either directly or in conjunction with an affiliate, serve as a covered provider in the context of originating or terminating a given call.

On the surface, this language seems stern and in fact it is.

The FCC Second Report and Order and Third Further Notice of Proposed Rulemaking (FCC18-45), released on April 17, 2018 and effective June 4, 2018, makes it cogently clear that in the Rural Call Completion world that while Covered Providers are responsible for the quality and reliability of communication services provided to rural areas of the United States.

However, it is also very clear that Intermediate Providers to whom Covered Providers hand-off LD call traffic for routing, transmission and call termination will have “to come into the light of day” so to speak.

While Covered Providers no longer must submit quarterly FCC Form 480 Rural Call Completion Reports to the FCC, there is no denying that the responsibility to strictly monitor the performance of the Intermediate Providers has not abated.

In fact, the Covered Providers must:

• Ensure that all Intermediate Providers utilized by the individual Covered Provider are registered with the FCC by no later than August 26, 2018 (180 days after the effective date of the RCC Act).
• Have contracts in place for all Intermediate Providers to which they hand-off traffic in which expectations and metrics for service quality and reliability are clearly stated.
• Closely monitor ongoing Intermediate Provider performance against expectations.
• Disclose the Intermediate Providers it uses to the FCC and to any rural CLEC or ILEC that is affected by the Covered Provider service.
• Show documented evidence of progressive discipline up to and including contract termination for poor performance.

Admittedly, it is difficult, if not impossible, for any Covered Provider to clearly see how many Intermediate Providers are involved in routing, transmission and termination of any given call.

Nevertheless, the RCC Act and by extension the FCC as stated in FCC 18-45 expects the number of hand-offs or “hops” required to terminate call traffic to rural ILECs and CLECs to be limited.

Common contents of contracts between Covered Providers and Intermediate Providers should be as follows:

• There should rarely be more than two (2) hops from one Intermediate Provider to another for any call.
• Only registered Intermediate Providers should be involved for a given call.
• Each Intermediate Provider as part of its contract with a Covered Provider should monitor the service quality and reliability of any Intermediate Provider it uses to complete an individual call.
• Any service issue or failure by an Intermediate Provider working on behalf of another Intermediate Provider could be grounds for termination as well.

In case you had not noticed, there is a considerable amount of work required to process recorded call details for each Intermediate Provider employed by a Covered Provider. Generally, there are three (3) to seven (7) Intermediate Providers used by each Covered Provider.

This translates to 3-7 separate sets of metrics that must be managed and documented.

In addition, it may not be obvious but any Intermediate Provider that employs other Intermediate Providers should probably have the same level of documentation as a Covered Provider would utilize in managing the direct Intermediate Providers to which it interfaces.

The use of a third party to deal with the necessary documentation is something that will have attraction to Covered Providers and Intermediate Providers alike in ultimately satisfying the FCC and anyone else who could come looking.

As you can see while the FCC has stepped back a little in directly enforcing the quality and reliability of communication services provided to rural areas, the threat of possible enforcement actions for poor performance over a sustained period is not a hollow threat as has been seen over the last few years.

The intermediate Providers not going to be invisible in this new regulatory regime nor should they be.

The next major hurdle for the Intermediate providers will be on February 26, 2019, when it is expected that the FCC will “promulgate rules establishing service quality standards to be met by all Intermediate Providers.