Internet Protocol Enhanced Service (IPES) companies are VoIP providers regulated by the FCC.  They are becoming more common in recent years as carriers modernize their networks for 5G.  IPES providers use the Internet completely for their traffic without the use of any Time Division Multiplexing (TDM).  

Apparently, and this came as news to me, there is industry confusion as to how IPES traffic is affected by the FCC’s Access Stimulation Order and whether they themselves may be involved in this practice.  On April 28,2021, telecom companies Inteliquent and Lumen met with the FCC for clarification of this issue.

The companies assert that as rural CLECs have largely stopped stimulating access minutes, there has been a shift of stimulated traffic to IPES providers.  As such, they urge the Commission to “eliminate any potential for uncertainty or dispute about how traffic handled by IPES providers should be treated.” Moreover. they encourage the Commission to ensure that if IPES providers engage in access stimulation, they are called out for this behavior.

As the industry continues to evolve, IPES providers increasingly operate like LECs and are responsible for the traffic they originate or terminate.  Thus, Inteliquent and Lumen claim it would be inappropriate to attribute their IPES traffic to an actual LEC that only serves as the IPES provider’s local interconnection partner for local traffic in the LERG (the “Hosting LEC”).  

The companies provide more details about their concerns:

IPES providers designate a Hosting LEC for purpose of receiving local traffic. This designation does not apply to long distance traffic, which is the traffic subject to the Access Arbitrage Order. Separately, the IPES provider also designates an access tandem in the LERG, the purpose of which is for IXCs to deliver long distance traffic from anywhere outside the local area. The IPES provider receives the long distance traffic from the access tandem, but this traffic, in many cases, does not traverse the Hosting LEC’s facilities.

Thus, for access traffic, in contrast to the call flow for a traditional LEC end office scenario, traffic destined for an IPES provider does not necessarily traverse any LEC end office (including the Hosting LEC’s facilities)…

Because the IPES provider, not the Hosting LEC, necessarily has visibility into all of the IPES provider’s own access traffic, it would be unreasonable to attribute such traffic to the Hosting LEC. Moreover, misattributing this traffic to the Hosting LEC could harm innocent terminating LECs by causing them to be mislabeled as parties engaged in access stimulation, and it could disrupt the market for serving the many IPES providers who do not engage in access stimulation.  Conversely, because the IPES provider both functions like a LEC for the purposes of the access stimulation rules and necessarily has visibility into its own access traffic, it is reasonable for the IPES provider to have that access traffic attributed to it.  (April 30, 2021, Telliquent and Lumen Ex Parte Letter, Docket 18-155, at p.2)

Thus, IPES carriers could be replacing rural CLECs as the newest version of access stimulators.  To ensure this doesn’t happen, Inteliquent and Lumen suggest that the FCC issue a declaratory ruling clarifying that IPES providers will be treated as LECs for the purpose of the access stimulation rules.  This clarification would ensure that the provider actually receiving terminating access traffic would be subject to the access stimulation triggers. To the extent an IPES provider’s ratio of terminating to originating traffic meets the triggers, it should be deemed to be engaged in access stimulation just like a traditional LEC. 

If the Commission prefers however, the carriers note it could issue a further notice of proposed rulemaking proposing to subject IPES providers to the access stimulation rules explicitly.

It will be interesting to see if this request gets any traction with the Commission.  I believe for that to happen affected companies would have to provide actual data demonstrating that IPES providers are engaging in access stimulation.  The claims made by Inteliquent and Lumen while interesting and something to watch going forward, do not contain such data and is therefore unlikely to generate new FCC action for now.