Verizon ponies up $5M to resolve FCC rural call completion investigation

Verizon (NYSE: VZ) is going to pay $5 million to settle an FCC inquiry into whether the service provider's rural customers could receive long distance or wireless calls to their traditional POTS phones.

Led by the FCC's Enforcement Bureau, the regulator's inquiry focused on whether Verizon, during a period of several months in 2013, did not investigate evidence of low call answer rates to 26 different rural areas in the United States.

Under the agreement it made with the regulator, Verizon will pay a $2 million fine and implement a compliance plan where it will spend an additional $3 million over the next three years to improve call completion in rural areas.

"All Americans, no matter where they are located, have a right to make and receive phone calls," said Travis LeBlanc, chief of the Enforcement Bureau, in a release. "Phone companies are on notice that the FCC will hold them accountable for failures to investigate and ensure that calls go through to the rural heartland of the country."

This action was also applauded by the NTCA, an industry advocacy group that supports rural telcos.

"We hope that today's action will remind other carriers and intermediate providers of the importance of all of these responsibilities," said Shirley Bloomfield, CEO of NTCA, in a statement. "Much more remains to be done, however, to protect the integrity and reliability of our nation's communications networks, and we look forward to further work to achieve this goal through a combination of effective rules, enforcement and education."

Verizon also agreed to appoint a Rural Call Completion Ombudsman within Verizon to centralize analysis of rural call completion problems and develop a system to automatically identify customer complaints that may be related to rural call completion issues.

The FCC said that while it had "significant concerns" that Verizon did not investigate the matter properly, it was "encouraged" that the telco would commit resources to address the rural call completion.

Verizon is not the only service provider to come under fire for rural call completion. Over the past two years, the FCC's Enforcement Bureau has reached similar settlements with Matrix Telecom, Windstream and Level 3 Communications.

After issuing a notice of proposed rulemaking (NPRM) in early 2013, the FCC began crafting rules to resolve long-distance call completion in rural areas by requiring them to record, retain and report rural call completion data. The regulator said that these rules are expected to take effect this year.

For more:
- see the release

Related articles:
FCC establishes new rules to overcome rural call completion issues
FCC places NPRM spotlight on rural call completion problems
Rural telecom groups: Call completion needs improvement in rural areas