These services typically include phone sex and conference call providers, which expect a high volume of incoming calls.Notably, these service providers do not need to establish a physical, local presence in order to route their calls in this way.The cost basis to provide service in those communities is dramatically lowered. Most Iowa telephone companies (and there are a lot! The NECA publishes a tarrif, which each company participating agrees to use, and then they split the revenues.The termination charges for those tarrifs are a significant source of revenue for the local phone companies.
“I don’t know if you could go to the person and say you need to pay back the government,” he said.
Individual telcos are free to opt out of this process.
For the first two years, they are then free to bill interexchange carriers directly at an initially-high rural rate of five to thirteen cents a minute.
is a controversial practice by which some local exchange telephone carriers in rural areas of the United States inflate the volume of incoming calls to their networks, and profit from the greatly increased intercarrier compensation fees to which they are entitled by the Telecommunications Act of 1996.
Under the regulatory mechanisms of the Telecommunications Act of 1996, wireless, and long distance carriers (such as AT&T, Sprint, T-Mobile US, or Verizon) pay access fees to local exchange carriers (LECs) for calls to those carriers' local subscribers.