New state rules take effect in August to crack-down on small Iowa telephone companies that allow what’s called “traffic pumping” for things like porn chat lines.  

Companies like AT&T complained to state regulators when they noticed a lot of long-distance calls to a few phone numbers in rural Iowa. The big companies pay a per-minute fee to rural phone companies for long distance calls that reach the land lines maintained by those rural phone companies.

Turns out a few small phone companies in Iowa struck deals that let local land lines in Iowa be used for things like conference calls, dating services and even pornographic chat lines. State regulators last year ruled those companies had engaged in inappropriate “access stimulation” — “pumping” a high-volume of calls onto their small systems. David Lynch, the legal counsel for the Iowa Utilities Board, says that forced the big long-distance companies to pay way too much in those per-minute fees — or tariffs.

“Unfortunately when we go through and outline all the ways they’ve failed to follow their tarriff, we provide them a blueprint of what to different next time to make it work so we can’t get them next time on those same grounds,” Lynch said.  “And that’s why we had to have a rule that prohibited it going forward.”

The new state rules allow long-distance companies to seek a change in a small Iowa phone company’s per-minute fees if the volume of calls into that Iowa phone company increases by 100 percent in a six month period. Tom Lovell, general manager of Clear Lake Telephone Company, says the new rules are unnecessary and burdensome.

“I agree with the Iowa Utilities Board that traffic pumping needs to be reigned in,” Lovell says. “The few companies that were involved in it have given a black eye to all the independents in Iowa. However, the proposed rules go way beyond traffic pumping and will have a chilling impact on all independents which have operated honorably and have not engaged in this traffic pumping.”

Gary Clark, chairman of the Iowa Telecommunications Association, is general manager of Huxley Communications. He says some small town phone companies will balk at bringing new customer service centers into their communities because they generate a high-volume of calls. ”We’re afraid that this is going to decrease economic development in our area,” Clark says.

The small phone company executives asked the legislature’s Administrative Rules Review Committee to table the Iowa Utilities Board rules so legislators could wade into the issue next January when the Iowa General Assembly convenes. Senator Tom Courtney, a Democrat from Burlington, warned against that plan.

“Do you really want the legislature to get a hold of this stuff and start messing with it?” Courtney asked, with a laugh.  “..All of a sudden you’ve got 150 people messing around with this — I’m just not convinced you understand the implications of that or what could happen.” 

The committee voted, six-to-three, against the idea of delaying implementation of the new state rules for 70 days to allow for more negotiation between state regulators and the telephone industry, although one legislator urged the two sides to meet over a meal of “corned-beef hash” to hash out their differences.

The new state rules, which take effect August 4, only apply to long distance phone calls that start and end in Iowa.  The Iowa Utilities Board estimates that accounts for about five-percent of the “high-volume” traffic that the long-distance companies have complained about. The Federal Communications Commission regulates long-distance calls from one state into another and is considering its own rules to curb “access stimulation” that sends a high volume of phone calls to telephone lines in rural America in hopes of reaping millions in tariffs from long-distance companies.