Government Bytes


Will South Dakota stop traffic pumping?

by John Stephenson / /

There is an oldadage that says nothing in life is free. You know those advertisements you see for free internation calls and pornographicchat lines? There’s actually a huge cost for those services. Unfortunately,millions of wireless subscribers like you help to pay for them through higherbills because of a practice known as access stimulation or “traffic pumping.”


Trafficpumping is the practice of artificially moving traffic onto a local exchangecarrier (LEC). Traffic pumping takes place when an LEC enters into anarrangement with a calling company to carry “free services” over the LEC’snetwork. But because federal law requires that wireless and long-distancecarriers reimburse LECs for calls on the network, the LECs take advantage ofthe increase in traffic and assess high fees on the wireless and long distancecarriers. Consumers are ultimately the ones who must pay these fees throughhigher telephone bills. What’s more, the LEC pays the calling company akickback for the increased traffic.


Byone estimate, traffic pumping costs wireless consumers $190 million per year.The problem is now so serious that the Federal Communications Commission hascalled for efforts to address traffic pumping because it threatens to underminethe very basis of compensation for services in the telecommunications system.South Dakota appears to have heard the call for action, so much so that severalsenators have introduced Senate Bill 87. The bill would explicitly prohibitLECs from assessing chargescertain “access stimulation” for traffic pumping. Unfortunately, the bill hasbecome mired in a committee.


Aswe said in a letter to the Senate regarding SB 87, “regulations on both thetelecommunications marketplace and the interaction among providers should bestreamlined and kept to a sensible minimum. However, neither should thoseregulations create distortions that artificially impede upon the efficiency ofthe telecommunications sector nor impose higher prices on consumers.” SB 87addresses these issues. Let’shope that the Senate gets the message that this is not a narrow problem but aserious issue that needs action now.