Settlement Routes
Before the telecoms industry deregulation that started in the 1980s, most telephone companies were owned or regulated by their governments: even countries with many domestic phone companies usually had a regulated international carrier. These carriers used settlement routes to handle traffic between them.
For example, BT and the Australian carrier Telstra send each other traffic over a satellite link or by submarine communications cable. Telstra terminate calls to Australians from British callers, while BT terminate calls in the UK from Australians. At the end of the year Telstra and BT add up the traffic, measured in minutes, they have sent each other and settle net: if BT had sent more minutes to Telstra than vice-versa, BT would pay at the settlement rate for the excess minutes. Settlement rates can be in the range of $0.10 - $2 per minute, depending on the countries involved. If the traffic balanced, neither company pays the other anything.
The amount of money involved in the settlement rate system is considerable. In 2003, American telephone companies made payments of three billion dollars to telephone companies and governments across the world.
The settlement route arrangement is also known as the accounting rate system. The accounting rate is the sum of the two settlement rates. The collection rate is what the subscriber pays.
Read more about this topic: International Telecommunications Routes
Famous quotes containing the words settlement and/or routes:
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—Jane Addams (1860–1935)
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—Terri Apter (20th century)