The third-largest wireless provider in the country, T-Mobile USA, Inc., has entered into a Consent Decree with the Federal Communications Commission’s (FCC) Enforcement Bureau, ending an investigation into whether T-Mobile violated the FCC’s rural call completion rules. [1]

Under the terms of the settlement, T-Mobile must pay a $40 million civil penalty to the U.S. Treasury, and follow a compliance plan, for three years, designed to ensure T-Mobile obeys the FCC’s rural call completion rules. The Enforcement Bureau also required T-Mobile to make an admission of guilt. Specifically, T-Mobile admitted that it: (1) violated Section 64.2201 of the FCC’s rules prohibiting the insertion of false ring tones; and (2) did not correct problems with its Intermediate Providers’ delivery of calls to consumers in certain rural areas.

Background on Rural Call Completion Rules

Beginning at least as early as 2010, rural Americans and local exchange carriers (LECs) serving rural America began noticing that phone calls placed to rural areas were not reaching their intended recipients, causing businesses to lose revenue and customers, cutting off families from their relatives in rural areas, and putting lives and property in danger. [2] To provide one example, there are school districts in rural areas that use automated phone systems to contact parents about important information such as when school has been canceled. When these systems are located outside of rural areas, call completion problems prevent recorded messages from being delivered, causing public safety concerns. Call completion problems have also prevented calls to and from hospitals and other emergency services from being delivered.

For years, rural LECs pressed the FCC and Congress to take action to address the problem. At the end of 2013, the FCC adopted recording, retention, and reporting rules intended to ensure reliable phone service to rural America. [3] Those rural call completion rules apply to “covered providers” – providers of long-distance voice service that make the initial long-distance call path choice for more than 100,000 domestic retail subscriber lines, counting the total of all business and residential fixed subscriber lines and mobile phones and aggregated over all of the providers’ affiliates. [4] Covered providers – LECs, interexchange carriers, commercial mobile radio service providers, and VoIP service providers – must record and retain nine specific details for call attempts to a rural incumbent LEC, and make quarterly reports. [5] Covered providers began recording data on April 1, 2015, and began submitting reports on August 1, 2015. Approximately 55 covered providers file reports each quarter.

Prohibition On False Ring Signaling

The FCC’s 2013 Rural Call Completion Order specifically prohibited the use of false ring tones, formally known as false audible ringing, which was identified as a major cause of call completion problems. It occurs when an originating or intermediate provider prematurely triggers audible ring tones to the calling party before the call setup request has actually reached the terminating rural provider. The caller thinks the called party’s phone is ringing, even though it is not, and eventually hangs up after thinking that nobody is available to receive the call. Absent the false ring tone, the calling party would experience silence during an excessively lengthy call setup.

All originating and Intermediate Providers are prohibited from causing audible ringing to be sent to the caller before the terminating provider has signaled that the called party is being alerted. [6]   “Alerting the called party” includes alerting devices, services or parties that can answer the call such as an interactive voice response, answering service, voicemail or call-forwarding system or any such system that can cause the network to register that the terminating party has gone off hook.  The rule applies to both interstate and intrastate calls, as well as to both originating and terminating international calls while they are within the U.S.

T-Mobile Inserted False Ring Tones Into Hundreds of Millions Of Calls Each Year

The FCC’s Enforcement Bureau launched an investigation of T-Mobile after receiving complaints from rural incumbent LECs in Wisconsin, alleging T-Mobile customers were unable to complete calls to subscribers served by the rural LECs. The complaints were sent to the FCC’s rural call completion e-mail box. While the investigation generally concerned whether T-Mobile provided degraded phone service on calls placed to rural areas, the Enforcement Bureau probed whether T-Mobile conveyed false ring tones to its customers that placed calls to rural areas. Many of the complaints from the Wisconsin LECs reported that the calling party heard ring tones on call attempts that failed to reach the rural customers.

According to the Consent Decree, in 2013, T-Mobile used a “Local Ring Back Tone” (LRBT) for out-of-network calls from its customers that were routed via Session Initiation Protocol (SIP) trunks and that took more than a certain amount of time to complete. T-Mobile continued to use LRBT after the FCC rule prohibiting the practice went into effect in January 2014, and even expanded the use of LRBT calls on additional SIP routes.

Because this practice was applied on a nationwide basis without regard to time of day, the Enforcement Bureau estimates T-Mobile’s false ring tones were injected into hundreds of millions of calls each year. [7]

The Consent Decree settles the investigation. T-Mobile must pay a $40 million civil penalty to the U.S. Treasury, and for a period of three years, T-Mobile must follow a compliance plan designed to ensure it obeys the FCC’s rural call completion.

Here’s A Few Take Aways...

As part of the settlement, T-Mobile admitted that it: (a) violated Section 64.2201 of the FCC’s rules prohibiting the insertion of false ring tones; and (b) did not correct problems with its Intermediate Providers’ delivery of calls to consumers in certain rural areas.

The Consent Decree explains that in 2007 T-Mobile began inserting false ring tones into calls from certain customers that took more than a certain amount of time to complete. So we now know that T-Mobile was causing rural call completion problems as early as 2007. What’s striking here is that T-Mobile continued to trick consumers with false ring tone even after the FCC adopted a rule expressly prohibiting the practice. T-Mobile will pay $40 million for its crimes, even though that fine could have, and perhaps should have been in the billions.

The second admission of guilt – T-Mobile did not correct problems with its Intermediate Providers’ delivery of calls – is also noteworthy. An Intermediate Provider is “any entity that carries or processes traffic that traverses or will traverse the PSTN at any point insofar as that entity neither originates nor terminates that traffic.” Intermediate Providers are a major source of rural call completion problems, and have been for a long long time. The FCC, however, failed to sufficiently hold Intermediate Providers accountable when it adopted its rural call completion rules. Rural LECs and others have long advocated for a requirement that covered providers monitor the performance of their Intermediate Providers. The T-Mobile incident once again proves that stricter oversight of Intermediate Providers is needed. Fortunately, the FCC is moving in the right direction. It is set to adopt new rural call completion rules, including a rule requiring covered providers to monitor the performance of the Intermediate Providers to which they hand off calls.

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[1] T-Mobile USA, Inc., File No.: EB-IHD-16-00023247, Acct. No.: 201832080003, FRN: 0004121760, Order, DA 18-373 (Apr. 16, 2018) (Consent Decree).

[2] The rural telecom industry began informing the FCC of rural call completion problems at least as early as November 2010.  See Letter from Michael Romano, Senior Vice President-Policy, NTCA, to Julius Genachowski, FCC Chairman, WC Docket Nos. 07-135 and 11-39, CC Docket 01-92 (Dec. 13, 2012) (providing a timeline of significant rural call completion advocacy).

[3] Rural Call Completion, WC Docket 13-39, Report and Order and Further Notice of Proposed Rulemaking, FCC 13-135 (rel. Nov. 8, 2013) (Rural Call Completion Order).

[4] For purposes of the rural call completion rules, the term “long-distance voice service provider” means any person that is engaged in the provision of interstate interLATA, intrastate interLATA, interstate interexchange, intrastate interexchange, intraLATA toll, inter-MTA interstate and/or inter-MTA intrastate voice services. Carrying call traffic across exchange or LATA boundaries for the purpose of aggregation before handing that traffic from the originating provider to an intermediate provider (e.g., an IXC) does not in itself constitute long distance service.

[5] In the Rural Call Completion Recon Order, the FCC excluded intraLATA interexchange/toll calls that do not traverse any underlying carriers’ networks from the call completion recordkeeping and reporting requirements.  Rural Call Completion, WC Docket 13-39, Order on Reconsideration, FCC 14-175, ¶9 (Nov. 13, 2014).

[6] 47 C.F.R. § 64.2201.

[7] Consent Decree at ¶ 11.