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/ -- _____________________________________________________________________ -- Bandwidth and Colocation Provided by http://www.api-digital.com -- asterisk-biz mailing list To UNSUBSCRIBE or update options visit: http://lists.digium.com/mailman/listinfo/asterisk-biz
