For over 50 years, toll free numbers have been exceptionally successful.  Toll free numbers enable businesses and institutions to support branding initiatives, facilitate marketing campaigns, promote a national presence, and to simply make it convenient for people to reach them without regard for cost.

Unfortunately, arbitrage and fraud schemes such as toll free traffic pumping, are increasingly undermining the integrity of the intercarrier compensation model for toll free calls.  To address this issue, the Federal Communications Commission, took definitive steps to reduce intercarrier compensation charges that provide the underlying incentive for toll free routing arbitrage and fraud schemes.

Specifically, the FCC ruled the following:

  • Cap all originating 8YY end office, tandem switching and transport, and database query charges at their current rates as of October 9, 2020
  • Reduce originating 8YY end office access charges by moving to a bill-and keep model over three years beginning July 1, 2021 and ending July 1, 2023
  • Adopt the combination of 8YY originating transport and originating tandem switching access charges into a single nationwide tandem switched transport access charge capped at $0.001 per minute
  • Reduce 8YY database query charges, needed to route all 8YY calls, to a cap of $0.0002 per query in three steps ending July 1, 2023
  • Prohibit carriers from double dipping by charging for more than one such database query per call.

On the upside, the incentives for arbitrage that unnecessarily raised costs are now reduced.  Similarly the incentive that encouraged bad actors to generate high-volume robocalls for toll free traffic pumping is greatly reduced. And maybe most importantly, these are critical steps to protect 8YY customers who have been unnecessarily burdened by high costs and fraudulent 8YY calls that they had to pay for.

On the downside, for carriers, the impact of this ruling is a significant shift of the burden to support 8YY calls.  The old pricing model created an incentive for originating operators to leave TDM transport, tandem switching, and even extra route miles in the call path.  The new model reflects the modern reality of tandem-less networks and efficient IP transport.  All carriers involved in handling 8YY calls are now caught in squeeze of having to cover their own costs under the bill-and-keep model as well as having limits on how much they can recoup for handling 8YY calls.  Carriers need new methods to restore profitability.

The two most significant ways to reduce costs, thus preserving margins on handling toll free calls, is for the originating carrier to:

  • Have the most cost-effective way to identify the responsible organization (RespOrg) for the termination of each toll free call.
  • Where possible, to utilize directly routing to RespOrg for the toll free call termination to maximize inter-carrier compensation

Ribbon’s Toll-Free Routing service delivers these capabilities.



Ribbon Toll-Free Routing Service

Ribbon’s cloud-hosted, Toll-Free Routing service is subscription-based, designed to provide the most cost-efficient way for originating carriers to handle toll free calls. 

The service hosts a synchronized copy of the RouteLink database from Somos, the North American toll free number administrator.  Advanced toll free number queries are supported by Ribbon’s Policy and Routing server (PSX) to identify the proper RespOrg for call termination. 

With the PSX, the originating carrier can use a REST/HTTPS API-based query, rather than a more expensive SS7-based query to determine the proper routing.  By using an API-based query and response it is possible to get the RespOrg ID, Carrier ID Code (CIC), Destination IP, and the FQDN for the RespOrg.  Not only is this query less costly, but it delivers enough information to determine if direct routing to the RespOrg will be possible.

For carriers with many switches performing toll free number routing queries, the PSX provides a way to aggregate all those queries, reducing the complexity and cost vs using SS7-based queries.

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Toll-Free Routing Service - Call and Compensation Flows

With Toll-Free Routing service, an originating service provider can move from an expensive, and limited, SS7 query to an IP-based query as shown in the image above.  With RespOrg ID, the CIC, Destination IP address and the Fully Qualified Domain Name (FQDN) of the RespOrg, Ribbon's PSX will identify the lowest cost route to reach the proper RespOrg.

Ideally, the lowest cost route will be a direct route to the RespOrg, shown in the image below as a solid blue line.  As can also be seen, the solid green line, represents the compensation flow that is direct to the originating service provider, thus helping maintain margins on this traffic.

If direct routing to a RespOrg is not possible the CIC, also returned in the toll free database response, will be used to reach next carrier, as is done today. Note: This call flow and the associated compensation flow are shown using the dashed blue and green lines.

Toll Free Routing Service Diagram for SP

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