TR Daily T-Mobile to Pay $40M for Rural Call Completion Violations
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Monday, April 16, 2018

T-Mobile to Pay $40M for Rural Call Completion Violations

T-Mobile US, Inc., has agreed to pay $40 million to settle an FCC investigation into its failure to take action to correct rural call completion problems and its violation of the FCC’s rule prohibiting carriers from inserting false ring tones in calls. Commissioner Mignon L. Clyburn criticized the consent decree, saying that the $40 million payment was inadequate given T-Mobile’s violations and the amount other parties have agreed to pay in consent decrees and that funding should be reserved to compensate consumers.

“It is a basic tenet of the nation’s phone system that calls be completed to the called party, without a reduction in the call quality — even when the calls pass through intermediate providers,” FCC Chairman Ajit Pai said in a statement. “The FCC is committed to ensuring that phone calls to all Americans, including rural Americans, go through.”

A news release noted that the Enforcement Bureau “opened an investigation following rural carrier and consumer complaints that T-Mobile callers were unable to reach consumers served by three rural carriers in Wisconsin. Although T-Mobile reported to the FCC that the problems had been ‘resolved,’ the Commission continued to receive complaints that calls were failing. In addition, call completion complaints filed directly with T-Mobile showed patterns of problems with call delivery to consumers in at least seven other rural areas.”

The news release added that the probe “also revealed T-Mobile’s practice of injecting false ring tones into certain calls. T-Mobile reported that it had done so on hundreds of millions of calls and admitted that its actions violated the Commission’s prohibition of injecting false ring tones on any calls.”

“To settle this matter, T-Mobile admits that it violated the Commission’s prohibition against the insertion of false ring tones and that it did not correct problems with delivery of calls to certain rural areas,” according to an order implementing the consent decree in file no. EB-IHD-16-00023247.

The consent decree quoted a rural call completion order adopted in 2013 (TR Daily, Oct. 28, 2013), saying that “false audible ringing” happens “when an originating or intermediate provider prematurely triggers audible ring tones to the caller before the call setup request has actually reached the terminating rural provider. That is, the calling party believes the phone is ringing at the called party’s premises when it is not. An originating or intermediate provider may do this to mask the silence that the caller would otherwise hear during excessive call setup time. As a result, the caller may often hang up, thinking nobody is available to receive the call. False audible ringing can also make it appear to the caller that the terminating rural provider is responsible for the call failure, instead of the originating or intermediate provider.”

The settlement announced today is the sixth with the FCC involving rural call completion issues.

“I wish that I could celebrate today’s settlement as a victory for consumers and a moment in which the Commission championed consumer protection. Unfortunately, I cannot. With today’s item, the Chairman has missed an opportunity to protect consumers and betrayed his own self-professed values when it comes to process,” Ms. Clyburn said in a statement. “Today’s consent decree attempts to address massively deceptive and harmful violations of the Commission’s rules likely impacting billions —yes, billions — of telephone calls to rural areas over the past several years. According to the consent decree, T-Mobile admits to inserting false ringtones into calls that failed to connect. This may have affected ‘hundreds of millions of calls each year’ after the practice was expressly prohibited by the Commission in January 2014. This meant that consumers making calls to certain rural areas would hear ringing on their end even if the call was not actually connecting and the phone was not actually ringing at the called party's premises. The deception made it difficult to pinpoint the problem and resolve it — consumers would think that their service was working and that the person at the other end just did not pick up.”

“How did the Commission address this situation? With a severely mismatched consent decree, negotiated by the Chairman’s office. The $40 million civil penalty, which will be paid to the U.S. Treasury, is dwarfed by larger, unpaid fines recently proposed against individual robocallers — and the volume of potential violations here outpaces any robocalling action the Commission has taken. And the compliance plan does not contain any concessions that would explain such a massive discount,” Ms. Clyburn added. “Perhaps most importantly, there is absolutely nothing in this consent decree to compensate consumers. Prior consent decrees have included direct-to-consumer benefits, such as refunds or discounts, or notifications to customers who have been impacted. Despite demonstrating a clear and tangible consumer harm, in this consent decree, consumers are treated as a mere afterthought.

“Finally, I take issue with the fact that the Chairman, once again, failed to honor my request to have the full Commission vote on an item set to be released by a bureau. This is the first time the Commission, either at the Commission-level or through delegated authority, has considered violations of the rule prohibiting injecting false ringtones into calls that fail to connect,” Ms. Clyburn added. “And, far from delegating authority, the Chairman’s office was directly engaged in negotiating this item. As the Chairman, himself, has noted, ‘if any one Commissioner’ requests a Commission vote on a delegated authority item, ‘that request would be honored.’ Unfortunately, my request was ignored. This settlement should have been a bipartisan action on a bipartisan issue — rural call completion — that has plagued the entire industry for years. Unfortunately, in this case, the punishment does not fit the violation, the process was flawed, and consumers were not made whole.”

T-Mobile said in a statement that it “is committed to all of our customers across the country. Our actions have always been focused on better serving our customers and the ringtone oversight, which was corrected in January 2017, was unintentional. We have settled this matter – and will continue to focus on our mission to change wireless for good – for consumers everywhere.”

NTCA welcomed the consent decree.

NTCA Chief Executive Officer Shirley Bloomfield said her group “applauds the FCC’s investigation into the call completion epidemic. Rural consumers and businesses have suffered rural call failure since 2010. Continued vigilance on the part of industry and the Commission, combined with enforceable regulatory backstops, clearly remain essential to ensure that rural call failure will not compromise the integrity of our nation’s networks and the safety and welfare of rural communities.”

The FCC plans to consider a rural call completion second report and order and third further notice of proposed rulemaking at its meeting tomorrow that would, among other things, require “‘covered providers’ — entities that select the initial long-distance route for a large number of lines — to monitor the performance of the ‘intermediate providers’ to which they hand off calls” (TR Daily, April 10).- Paul Kirby, [email protected]

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