NECA Compliance with Cloud-based Services
How small and rural service providers can migrate to cloud communications while preserving NECA settlement revenue eligibility.
An Industry at a Crossroads
The National Exchange Carrier Association (NECA), organized as a result of the Federal Communications Commission’s Third Report and Order, plays a key role in defining tariffs and facilitating settlement of telecommunications service fees between operators. Small and rural service providers are often recipients of NECA settlement fees, an important source of revenue for this class of operator.
An Aging Network (And Personnel)
It’s 2023 and local exchange carriers are increasingly challenged with aging switching equipment and network infrastructure. This aging equipment, while continuing to operate, is more often than not beyond its expected service life and as a result no longer supported by their respective manufacturers.
Regardless of the status of the equipment, operators are also finding that the personnel with the experience to operate this aging equipment are also fast approaching retirement age. Finding knowledgeable replacements is increasingly difficult and costly.
Migrating to the Cloud
Newer, more modern cloud-based communications services can offer many benefits, including new architecture options that result in enhanced features, lower cost of operation, and simplified management.
However, migrating from a local exchange to a pure cloud architecture may put the service provider’s NECA eligibility at risk, risking the loss of important settlement revenue.
A Proposed NECA-Compliant* Hybrid Cloud Solution
TelcoBridges and its partners have developed a hybrid cloud architecture that combines the best of the cloud communications services while also meeting the requirements outlined by NECA, facilitating the important NECA settlement revenue stream.
Figure 1: Proposed NECA-Compliant Hybrid Cloud Architecture. Click to enlarge.
As shown above, the hybrid cloud architecture utilizes a TelcoBridges Tmedia gateway in the core of the service provider LATA, providing a physical connection and interconnection between:
- Existing SS7 or SIP interconnect inter-LATA, toll-free, and international carriers
- TDM and SIP subscribers
- Existing or updated billing infrastructure
- Modern cloud-based Class 5 services
This architecture also leverages the native Class 4 call routing features of the TelcoBridges Tmedia embedded softswitch, allowing the service provider to maintain call switching between interconnect carriers and subscribers.
For situations where Class 5 features are required, a cloud-based TelcoBridges Alliance Partner application can be added to the architecture as shown above.
Key Benefits
Maintaining NECA compliance/billing
Retention of existing interconnect providers
Built-in Class 4 call routing features
Optional cloud-based Class 5 features
Options to offer subscribers either SIP or TDM trunk lines
Existing or cloud-based billing systems
Learn More
Next Steps
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* NECA compliance for each network configuration is dependent on review and approval by NECA