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Level 3 Settles Rural Calling Probe, Paying $1 M & Improving Service

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Released: March 12, 2013

Federal Communications Commission

News Media Information 202 / 418-0500

445 12th Street, S.W.


Washington, D. C. 20554

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action.
See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

March 12, 2013
Mark Wigfield, 202-418-0253



Level 3 Will Make a Nearly $1 Million Voluntary Contribution As

Part of First Settlement of a Rural Call Completion Investigation

Washington, DC – Level 3 Communications, LLC, resolving an investigation into the company’s
rural call completion practices, has agreed to meet rigorous, verifiable call completion standards
and to provide extensive records that will assist FCC enforcement of rules protecting against
failed calls to rural areas. Level 3 will also make a $975,000 voluntary contribution to the U.S.
Treasury, and has agreed to make additional $1 million voluntary contributions going forward if
it misses specified quarterly benchmarks.
FCC Chairman Julius Genachowski said, “When calls to Americans in rural communities aren’t
reliably completed, the consequences are both life-threatening and damaging economically. As
today’s action shows, resolving this complex problem is a major priority for the FCC. We will
follow the facts and data, and we will hold responsible parties accountable.”
Enforcement Bureau Chief Michele Ellison said, “Basic long distance phone calls are failing in
many areas of rural America at alarming rates. This is unacceptable. Rural residents and
businesses should be able to receive a work-related or emergency call with the same reliability
and call quality as others do.”
Ms. Ellison added, “Through this settlement, Level 3 has committed to tackle this issue head-on,
agreeing to adopt tough, new call completion benchmarks, to back these standards with
significant noncompliance penalties, and to disclose critical data that will assist the Bureau in
other ongoing investigations. We are aggressively pursuing this problem wherever it leads, and
there will be significant consequences for those companies that are not fulfilling their obligations
to rural America.”
In its consent decree with the Enforcement Bureau, Level 3 has agreed to:
 Complete long-distance calls to incumbent local exchange carriers in rural areas at a rate
within 5% of that in non-rural areas over a two-year period.
 Report compliance with the 5% benchmark every quarter, beginning in January 2014.
 Pay an additional $1 million voluntary contribution if it misses the 5% benchmark in any

 Develop scorecards for intermediate providers that Level 3 uses to route calls, assessing
their performance in the areas of post-dial delay in connecting calls, network failure, and
call completion rates.
 Identify problematic routes to intermediate providers monthly.
 Cease using poorly performing intermediate providers.
 Assist the Enforcement Bureau in other investigations by providing data concerning the
performance of intermediate providers.
In general, rural call completion failures appear to be caused primarily by long-distance carriers
or intermediate providers attempting to reduce the intercarrier compensation paid to local
telephone companies for completing long-distance calls to a rural home or business. To
minimize these charges, providers often use third-party “least-cost routers,” which attempt to
connect calls at the lowest possible cost.
The FCC has been working on many fronts to address this complex and technical problem. In
February 2012, the Wireline Competition Bureau laid the foundation for today’s settlement by
clarifying that a long distance provider violates the Communications Act if it knows or should
know that it is providing degraded service to certain areas and fails to correct the problem. Last
month, the Commission proposed industry-wide data collection and reporting rules to enable the
FCC to better monitor the performance of long-distance carriers in rural areas. These new
reporting requirements, coupled with access to Level 3’s data, should strengthen the Bureau’s
enforcement capabilities. Over the long-term, the FCC’s November 2011 Universal
Service/Intercarrier Compensation Transformation Order
is phasing out intercarrier fees, which
will dramatically reduce financial incentives that appear to be driving call completion failures.
“This settlement reflects hard work and tenacity by the staff and meaningful cooperation by
Level 3,” said Ms. Ellison. The FCC continues to work closely with all stakeholders to resolve
the problem as investigations continue.
Enforcement Bureau Staff Contact: Christopher Killion at 202-418-1711 or Margaret Dailey at 202-418-
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