Exposing Telecom Operators Double Standards: The Legal and Ethical Dilemma of ITR Bypass and Grey Routes

The telecommunications industry faces numerous challenges, among which International Termination Rate (ITR) bypass and grey routes stand out. These practices raise significant regulatory and legal concerns, while also spotlighting ethical dilemmas. This article explores why operators use these routes, the resulting consequences, and the broader legal framework.

Understanding ITR Bypass and Grey Routes

ITR bypass refers to routing international voice traffic to avoid the standard termination rates set by the destination country’s operators or regulators. This is typically done through grey routes—unauthorised pathways that disguise international calls as domestic to benefit from lower rates. Grey routes often involve altering or removing key identifiers, which not only violates industry regulations but also obstructs law enforcement by concealing the true origin of communications.

Telecom operators often favour outbound routes priced below the standard rates, despite knowing such pricing may indicate a grey route. The motivation is clear—cost reduction. By utilising these cheaper routes, operators can either increase profit margins or offer competitive pricing to attract customers.

In competitive markets, operators may view the risk of detection or punishment as low, particularly if enforcement is weak or they can blame routing decisions on third-party carriers. However, this does not absolve them of responsibility; operators are required to ensure their partners comply with legal and regulatory standards.

A contradiction emerges when considering operators’ behaviour concerning inbound versus outbound traffic. While they exploit grey routes for outbound calls, they oppose inbound grey traffic, which terminates calls at lower domestic rates, affecting their revenues.

Operators often file complaints with regulators and implement technical measures to block grey traffic for inbound calls, highlighting a significant double standard. They support practices that boost profits but condemn those that hurt their earnings.

Legal Implications Under Global Regulations

International regulations impose strict requirements on operators to maintain accurate communication records, including the origin of calls. Manipulating or removing call identifiers breaches these rules, impeding law enforcement efforts. Such practices not only compromise the integrity of communication networks but also pose significant legal risks, including fines, sanctions, and possible criminal charges under international law.

In South Africa, operators engaging in ITR bypass often breach the Electronic Communications Act (ECA) by violating regulated tariffs. This non-compliance can attract penalties from the Independent Communications Authority of South Africa (ICASA).

Disguising international calls as domestic traffic may constitute fraud under the Prevention and Combating of Corrupt Activities Act, and it could violate the Regulation of Interception of Communications Act (RICA), which mandates accurate retention of communication data. Such practices could contravene anti-collusion laws under the Competition Act.

The double standard in operator behaviour is financially motivated. When sending outbound traffic, operators prioritise cost savings and profit maximisation, often bending legal or ethical rules. When receiving inbound traffic, they enforce regulatory compliance to protect their revenue streams from being eroded by lower domestic rates. Factors contributing to this behaviour include financial incentives, regulatory gaps, competitive pressures, and ethical ambiguity.

Lack of Due Diligence and Potential Collusion

A key issue in ITR bypass is the lack of due diligence when selecting transit partners and routes. Operators risk mismanagement if they fail to verify the legitimacy of routes. Worse, knowingly choosing grey routes could amount to criminal collusion. Operators are expected to investigate unusually low rates and ensure compliance with legal standards. Failure to do so exposes them to legal liabilities and undermines the integrity of telecommunications networks.

Addressing the Issue

To tackle the double standards in ITR bypass, stakeholders must collaborate on several fronts:

• Strengthening regulatory enforcement to impose penalties on operators using grey routes.
• Promoting transparency by adopting clear routing policies and regularly auditing transit partners.
• Enhancing industry collaboration to share best practices and detect grey routes.
• Investing in technology to monitor unauthorised routing in real time.
  Raising awareness of legal obligations through training and industry forums.

The complexities of ITR bypass and grey routes underscore a conflict between commercial interests and regulatory compliance in telecommunications. The double standards operators exhibit—using grey routes for outbound traffic while condemning inbound grey traffic—demand a reevaluation of industry practices. Addressing these issues is crucial for promoting fair competition, ethical business conduct, and protecting the integrity of global communications. Only through a collective commitment to compliance and transparency can the industry eliminate unethical practices and align commercial objectives with legal responsibilities.