2. Qwest is an interexchange carrier, serving customers throughout the United States. Farmers is the incumbent local exchange carrier in Wayland, Iowa, serving approximately 800 access lines for local residents. Farmers provides local exchange and exchange access services. Qwest purchases tariffed access service from Farmers, which enables Qwest’s long distance customers to terminate calls to customers located in Farmers’ exchange.
3. In 2005 and 2006, Farmers entered into a number of commercial arrangements with conference calling companies for the purpose of increasing its interstate switched access traffic and revenues. Under the agreements, conference calling companies sent their traffic to numbers located in Farmers’ exchange and, in return, Farmers paid the companies money or other consideration. The agreements resulted in a substantial increase in the number of calls bound for Farmers’ exchange. As a result, the amounts of Farmers’ monthly bills to Qwest for terminating access charges rose precipitously.
30 November 2009
Unintended consequences of price regulation: Traffic pumping
This order reveals the practice known as "traffic pumping". I believe that it is a good example of arbitrage that results from price regulation (footnotes deleted):