Long-distance carriers offer lower pricing for off-peak calling to encourage callers to wait until the evenings. This makes more room on their network during peak times. Carriers are racing to increase their network capacity to keep pace with the fast growth of call volumes. At certain peak times, such as Thanksgiving Day, the majority of the public-switched network is in use, so many callers are unable to complete their calls. Lower off-peak rates should keep this from happening on normal working days.
Save money using off-peak calling
It is impractical for most businesses to shift their calling to the evening hours to take advantage of lower off-peak long-distance rates. A business that transfers computer data using modems and dial-up long-distance calling may be able to postpone these calls until the evening off-peak hours and save money.
A more practical suggestion is to compare the off-peak calling time offered by different carriers. If one carrier’s off-peak time starts at 7 p.m. instead of your current carrier’s 8 p.m. start time, maybe you should switch carriers. Telemarketing call centers that operate in the evenings can definitely profit from this suggestion.
Peak or off-peak
Friday, February 29, 2008
Wednesday, February 27, 2008
Long-distance pricing : Intralata, intrastate, interstate, and international calling
Even if your long-distance bill contains no errors, the pricing still makes the billing difficult to understand. Numerous factors, such as the following, affect the rates of a long-distance call:
The termination point of the call: Is it intralata, intrastate, interstate, or international?
- The time of the call: Is it peak or off-peak?
- Whether or not the call is outbound, inbound, or calling card;
- Whether or not the call is switched or dedicated;
- Whether or not a virtual private network is in place.
Intralata, intrastate, interstate, and international calling
Long-distance bills usually separate the traffic into intralata, intrastate, interstate, and international calling. Long-distance carriers’ international and interstate rates are listed in the tariffs they file with the FCC. Intrastate and intralata rates are listed in the tariffs filed with the state PUCs.
The interstate and international rates on one calling plan will be the same for all of a business’ locations. For example, a business with locations in Illinois and Maine will pay the same rate for interstate calls at both locations. The intrastate rates, however, will be different. Intrastate pricing is governed by the tariff filed with the PUC in that state. The carriers set these rates based on the economic, competitive, and regulatory influences in each state. Intrastate rates in Illinois are about $0.08 a minute, while in Maine they may be as much as $0.30.
Intralata calls on a long-distance bill will have their own rate. The local carrier normally carries these calls, but many businesses have moved this traffic to their long-distance providers. Many long-distance carriers use the same rate for intrastate and intralata pricing, but the traffic is usually still separated on the actual phone bill.
In addition to having long-distance traffic itemized by interstate, intrastate, and intralata, the phone bill will also have a section for international calling. Calculating the true cost per minute for international calls is difficult, because a different rate is used for each country, but the bill combines all the international calling together. To effectively check international rates, you must spot-check individual calls in the bill’s call detail section.
Call rounding
Long-distance rates may be whole numbers, such as 10 cents per minute, but more often they are expressed as fractional numbers such as 10.5 cents per minute. When customers double-check the rates on their long-distance bill, the rates are usually a little higher than the quoted rate.
Table 1 shows an example of call rounding. The customer was promised $0.069 per minute but is actually paying $0.071 per minute. On a large account, this 3% differential may be significant. If you have a legitimate error on your account, beware that your account executive may say, “The rates are a little high due to call rounding.” This can only be true if the differential is less than a penny. If the difference is more than a penny, you probably have a different error on your account.
Table 1: Call Rounding
The termination point of the call: Is it intralata, intrastate, interstate, or international?
- The time of the call: Is it peak or off-peak?
- Whether or not the call is outbound, inbound, or calling card;
- Whether or not the call is switched or dedicated;
- Whether or not a virtual private network is in place.
Intralata, intrastate, interstate, and international calling
Long-distance bills usually separate the traffic into intralata, intrastate, interstate, and international calling. Long-distance carriers’ international and interstate rates are listed in the tariffs they file with the FCC. Intrastate and intralata rates are listed in the tariffs filed with the state PUCs.
The interstate and international rates on one calling plan will be the same for all of a business’ locations. For example, a business with locations in Illinois and Maine will pay the same rate for interstate calls at both locations. The intrastate rates, however, will be different. Intrastate pricing is governed by the tariff filed with the PUC in that state. The carriers set these rates based on the economic, competitive, and regulatory influences in each state. Intrastate rates in Illinois are about $0.08 a minute, while in Maine they may be as much as $0.30.
Intralata calls on a long-distance bill will have their own rate. The local carrier normally carries these calls, but many businesses have moved this traffic to their long-distance providers. Many long-distance carriers use the same rate for intrastate and intralata pricing, but the traffic is usually still separated on the actual phone bill.
In addition to having long-distance traffic itemized by interstate, intrastate, and intralata, the phone bill will also have a section for international calling. Calculating the true cost per minute for international calls is difficult, because a different rate is used for each country, but the bill combines all the international calling together. To effectively check international rates, you must spot-check individual calls in the bill’s call detail section.
Call rounding
Long-distance rates may be whole numbers, such as 10 cents per minute, but more often they are expressed as fractional numbers such as 10.5 cents per minute. When customers double-check the rates on their long-distance bill, the rates are usually a little higher than the quoted rate.
Table 1 shows an example of call rounding. The customer was promised $0.069 per minute but is actually paying $0.071 per minute. On a large account, this 3% differential may be significant. If you have a legitimate error on your account, beware that your account executive may say, “The rates are a little high due to call rounding.” This can only be true if the differential is less than a penny. If the difference is more than a penny, you probably have a different error on your account.
Tuesday, February 26, 2008
Telecom Cost Management : Rate increases
Another problem revealed in the contract quote is the potential for rate increases. A few times each year, the major long-distance carriers increase the gross rates listed in their tariff. Over the past decade, a typical rate increase is 3% per quarter. Under this system, a customer’s rates will have increased by more than 30% over a 2-year period.
For example, Acme Manufacturing spends $10,000 per month in long distance. Its current contract is about to expire, so the company’s AT&T account executive offers a new contract. The proposal shows that the new pricing plan will drop Acme’s monthly billing to $8,000. Acme, excited about saving $2,000 per month, signs a new contract with AT&T, which explains that the only way to get these great prices is with a 3-year agreement.
Every quarter, AT&T implements a 3% to 5% rate increase, and most customers never notice. If a customer notices the increase, he figures it is because employees are making more calls than before. After 2 years, Acme’s bill is back up to $10,000, thanks to the rate increases.
AT&T then informs the customer of a new pricing plan that will cut the bill by $2,000 per month. The account executive says AT&T will be happy to void the current contract as long as it is replaced with a new 3-year contract. Rather than pay an extra $24,000 over the course of the next 12 months, the customer signs the new contract. And, you guessed it, every quarter the rates are incrementally raised, starting the cycle all over again.
The only way out of such a cycle is to bite the bullet and complete the third year of the contract. At that time, the customer will have maximum leverage to negotiate a better plan with the current carrier or may then switch to a lower cost carrier that guarantees its rates, such as Qwest, McLeod USA, and a host of resellers.
Carriers do not guarantee their rates because they fear certain market forces that could affect their revenues, such as inflation and new technologies. Ten cents a minute for long-distance calling is used as a benchmark today. If all the carriers guaranteed to charge their customers only 10 cents a minute, inflation would eat away the carriers’ profits. New technologies such as free voice calls over the Internet also threaten a carrier’s revenue potential.
The average phone company executives are eminently more concerned with pleasing their stockholders than they are with pleasing their customers. “Creating stockholder wealth” is the mantra for most companies. Sometimes the only way to take care of stockholders is to neglect customers.
For example, Acme Manufacturing spends $10,000 per month in long distance. Its current contract is about to expire, so the company’s AT&T account executive offers a new contract. The proposal shows that the new pricing plan will drop Acme’s monthly billing to $8,000. Acme, excited about saving $2,000 per month, signs a new contract with AT&T, which explains that the only way to get these great prices is with a 3-year agreement.
Every quarter, AT&T implements a 3% to 5% rate increase, and most customers never notice. If a customer notices the increase, he figures it is because employees are making more calls than before. After 2 years, Acme’s bill is back up to $10,000, thanks to the rate increases.
AT&T then informs the customer of a new pricing plan that will cut the bill by $2,000 per month. The account executive says AT&T will be happy to void the current contract as long as it is replaced with a new 3-year contract. Rather than pay an extra $24,000 over the course of the next 12 months, the customer signs the new contract. And, you guessed it, every quarter the rates are incrementally raised, starting the cycle all over again.
The only way out of such a cycle is to bite the bullet and complete the third year of the contract. At that time, the customer will have maximum leverage to negotiate a better plan with the current carrier or may then switch to a lower cost carrier that guarantees its rates, such as Qwest, McLeod USA, and a host of resellers.
Carriers do not guarantee their rates because they fear certain market forces that could affect their revenues, such as inflation and new technologies. Ten cents a minute for long-distance calling is used as a benchmark today. If all the carriers guaranteed to charge their customers only 10 cents a minute, inflation would eat away the carriers’ profits. New technologies such as free voice calls over the Internet also threaten a carrier’s revenue potential.
The average phone company executives are eminently more concerned with pleasing their stockholders than they are with pleasing their customers. “Creating stockholder wealth” is the mantra for most companies. Sometimes the only way to take care of stockholders is to neglect customers.
Wednesday, February 20, 2008
Save money on 800 fees
The simplest strategy here is to switch your service to a carrier that does not bill fees per 800 number, or get your current carrier to waive the fees. Like the banking industry, the telecommunications industry earns a significant amount of fee income. If the customer has the right amount of leverage, the average long-distance carrier will waive the toll-free number fees. A customer who has just completed a term agreement with a carrier and is renegotiating a new contract probably has enough leverage to get these costly fees waived.
When negotiating contracts with carriers, it is of the utmost importance that the cost of fees be clarified before executing the agreement. During negotiations, long-distance carriers will usually steer the conversation to discuss discounts and rates. Too many customers have allowed the negotiations to end here. When they get their bill, they may be surprised to see miscellaneous fees increase the bill by as much as 30%.
As could be expected, carriers are never happy about losing business. Most carriers will fight to retain a customer once they receive a change of RESPORG form from a competing carrier. They are not allowed to refuse to give up the number, but they do not have to forfeit the business without a fight. The first tactic is to call the customer directly and try to retain the business. The incumbent carrier may offer lower pricing or other premiums such as a free month of service in an attempt to save the account. If the customer is switching due to poor service, the carrier will probably attempt to resolve the problem.
Beware of the name mismatch game
If none of the tactics mentioned works, the incumbent carrier will play the name mismatch game. Upon receipt of the change of RESPORG form from the new carrier, the old carrier will double-check the exact spelling of the customer’s name. If the names mismatch only slightly, the carrier will refuse to release the number. I have seen numerous cases in which the current carrier had misspelled the company name years ago, and now that the company wants to change carriers, the current carrier will not release the number because of a mismatch.
For example, a company called Dave’s Trucking and Transportation uses Sprint for its 800 service. Dave wants to switch to AT&T, so he fills out the proper forms with the AT&T representative. Sprint refuses to release the 800 numbers because it knows the account as “Dave’s Trucking and Transportation, Inc.”
In an era where mergers and acquisitions cause business names to change frequently, the name mismatch game can be a very effective way for a long-distance carrier to earn an additional 2 months’ worth of billing.
Save money (and hassles) when switching inbound long-distance carriers
When you fill out the RESPORG forms with your new carrier, give the company a copy of your current long-distance bill. This way, the carrier can ensure the name on the forms will match exactly. Better yet, have the company send the bill copy to the new carrier along with the RESPORG form. This may save you up to 2 or 3 months of extended billing with the old carrier, as well as the frustration associated with micromanaging your long-distance carriers.
When negotiating contracts with carriers, it is of the utmost importance that the cost of fees be clarified before executing the agreement. During negotiations, long-distance carriers will usually steer the conversation to discuss discounts and rates. Too many customers have allowed the negotiations to end here. When they get their bill, they may be surprised to see miscellaneous fees increase the bill by as much as 30%.
As could be expected, carriers are never happy about losing business. Most carriers will fight to retain a customer once they receive a change of RESPORG form from a competing carrier. They are not allowed to refuse to give up the number, but they do not have to forfeit the business without a fight. The first tactic is to call the customer directly and try to retain the business. The incumbent carrier may offer lower pricing or other premiums such as a free month of service in an attempt to save the account. If the customer is switching due to poor service, the carrier will probably attempt to resolve the problem.
Beware of the name mismatch game
If none of the tactics mentioned works, the incumbent carrier will play the name mismatch game. Upon receipt of the change of RESPORG form from the new carrier, the old carrier will double-check the exact spelling of the customer’s name. If the names mismatch only slightly, the carrier will refuse to release the number. I have seen numerous cases in which the current carrier had misspelled the company name years ago, and now that the company wants to change carriers, the current carrier will not release the number because of a mismatch.
For example, a company called Dave’s Trucking and Transportation uses Sprint for its 800 service. Dave wants to switch to AT&T, so he fills out the proper forms with the AT&T representative. Sprint refuses to release the 800 numbers because it knows the account as “Dave’s Trucking and Transportation, Inc.”
In an era where mergers and acquisitions cause business names to change frequently, the name mismatch game can be a very effective way for a long-distance carrier to earn an additional 2 months’ worth of billing.
Save money (and hassles) when switching inbound long-distance carriers
When you fill out the RESPORG forms with your new carrier, give the company a copy of your current long-distance bill. This way, the carrier can ensure the name on the forms will match exactly. Better yet, have the company send the bill copy to the new carrier along with the RESPORG form. This may save you up to 2 or 3 months of extended billing with the old carrier, as well as the frustration associated with micromanaging your long-distance carriers.
Tuesday, February 19, 2008
Save money by using an 800 number instead of cards
Most telecommunications cost management measures do not require any advanced knowledge of the services or billing. By taking time to review the phone bills each month and apply a little common sense, most people should be able to successfully manage their telecommunications services.
Inbound long distance
Inbound long distance has its roots in AT&T’s WATS, which was more of a bulk pricing service than a sophisticated telecommunications service. Nonetheless, In-WATS service could be used by a business to allow its traveling employees and remote customers to call in for free. The business being called that signed up for In-WATS service paid for the calls. This became a significant competitive advantage for sales organizations that relied on their sales to come from inbound phone calls. Consumers are far more likely to call a business with toll-free service than if they have to pay for the call themselves.
Because inbound long distance requires more of the carrier’s network resources, inbound long-distance rates are slightly higher than outbound long-distance rates. In general, inbound long-distance rates are one cent higher than outbound long-distance rates. As previously mentioned, most carriers charge a monthly recurring fee of $10 to $20 for each toll-free number. The higher rates and fees for inbound long distance ensure that the carrier’s additional costs for this service are covered.
The “ring to” number
When signing up for inbound long distance today, customers must tell the long-distance provider to which number they want the 800 number connected. 800 numbers are virtual numbers. They do not have physical wires assigned specifically to each 800 number. Instead, the calls come in across a regular phone line that is specified by the customer. This number is often called the “ring to” or “pointed to” number.
A small business with five local lines would probably choose to have its 800 number pointed to its main phone number. With a simple phone system, the person who answers the phone may not know if the caller is using the 800 number or not.
Change carriers for inbound long distance
Prior to 1993, if customers wanted to switch long-distance carriers for their 800 service, they would also have to change to a new 800 number. AT&T controlled most of the long-distance market at that time, and its rates were usually 5% to 50% higher than competitors’ rates. If customers wanted to change carriers, they would have to be willing to put up with the hassles involved with changing 800 numbers. If the number was used only by company employees, the change might not have been too cumbersome. On the other hand, if the number was highly publicized and advertised, the potential lost business could far outweigh the cost savings associated with switching to another carrier.
In 1993, 800 number portability was implemented. As a result, customers can switch their inbound long-distance service to another provider but retain the same 800 number. However, a change in the RESPORG must take place. To change carriers, the new carrier requires customers to sign a change of RESPORG form, which is then sent to the old carrier and serves as a request for the old carrier to release the 800 number.
All of the carriers cooperate nationally to keep track of who is responsible for each 800 number. Even local carriers participate, because they may be the RESPORG for a customer’s 800 number that is used only to carry intralata traffic. The carriers usually explain that they must charge a fee for each toll-free number a customer has so they can fund the national toll-free directory and database. The fees per toll-free number may be as low as $1 per month with WorldCom or as high as $50 per 800 number with AT&T’s MegaCom billing.
Inbound long distance
Inbound long distance has its roots in AT&T’s WATS, which was more of a bulk pricing service than a sophisticated telecommunications service. Nonetheless, In-WATS service could be used by a business to allow its traveling employees and remote customers to call in for free. The business being called that signed up for In-WATS service paid for the calls. This became a significant competitive advantage for sales organizations that relied on their sales to come from inbound phone calls. Consumers are far more likely to call a business with toll-free service than if they have to pay for the call themselves.
Because inbound long distance requires more of the carrier’s network resources, inbound long-distance rates are slightly higher than outbound long-distance rates. In general, inbound long-distance rates are one cent higher than outbound long-distance rates. As previously mentioned, most carriers charge a monthly recurring fee of $10 to $20 for each toll-free number. The higher rates and fees for inbound long distance ensure that the carrier’s additional costs for this service are covered.
The “ring to” number
When signing up for inbound long distance today, customers must tell the long-distance provider to which number they want the 800 number connected. 800 numbers are virtual numbers. They do not have physical wires assigned specifically to each 800 number. Instead, the calls come in across a regular phone line that is specified by the customer. This number is often called the “ring to” or “pointed to” number.
A small business with five local lines would probably choose to have its 800 number pointed to its main phone number. With a simple phone system, the person who answers the phone may not know if the caller is using the 800 number or not.
Change carriers for inbound long distance
Prior to 1993, if customers wanted to switch long-distance carriers for their 800 service, they would also have to change to a new 800 number. AT&T controlled most of the long-distance market at that time, and its rates were usually 5% to 50% higher than competitors’ rates. If customers wanted to change carriers, they would have to be willing to put up with the hassles involved with changing 800 numbers. If the number was used only by company employees, the change might not have been too cumbersome. On the other hand, if the number was highly publicized and advertised, the potential lost business could far outweigh the cost savings associated with switching to another carrier.
In 1993, 800 number portability was implemented. As a result, customers can switch their inbound long-distance service to another provider but retain the same 800 number. However, a change in the RESPORG must take place. To change carriers, the new carrier requires customers to sign a change of RESPORG form, which is then sent to the old carrier and serves as a request for the old carrier to release the 800 number.
All of the carriers cooperate nationally to keep track of who is responsible for each 800 number. Even local carriers participate, because they may be the RESPORG for a customer’s 800 number that is used only to carry intralata traffic. The carriers usually explain that they must charge a fee for each toll-free number a customer has so they can fund the national toll-free directory and database. The fees per toll-free number may be as low as $1 per month with WorldCom or as high as $50 per 800 number with AT&T’s MegaCom billing.
Sunday, February 17, 2008
Long-distance service
Long-distance service consists of three major service types: outbound, inbound, and calling cards. Outbound long distance is what most of us know as direct dial long distance. To complete the call, the caller dials
1 + area code + number
Inbound long distance, also known as toll-free service, refers to a caller dialing an 800 number to reach a business. It is a toll-free call for the caller; the toll shows up on the business’ long-distance bill. Since the finite number of 800 numbers is running out, new numbers such as 888 and 877 are now used for toll-free calling.
Calling cards are most frequently used by callers who are traveling. Rather than use coins in a payphone or cause a charge on a host’s long-distance bill, calling cards offer a caller convenience and itemized billing each month. The complex world of long-distance service is not as baffling if you understand these three categories of any long-distance calling.
How a calling card call works
Calling card long-distance rates are higher than outbound and inbound rates. The cost of a calling card call normally includes a surcharge in addition to the per-minute rate. The surcharge may be as little as $0.15 per call or as much as $2.50 per call for some older cards still in circulation. The surcharge is designed to cover the cost of setting up the call.
During the past few years, the trend is that surcharges are lower or not charged at all. A business today must choose between cards with low rates that have a surcharge, or flat-rate cards that have no surcharge. In general, a business that makes very brief calling card calls should use a flat-rate card. Businesses that make long calls are probably better off with a traditional card that charges a surcharge. On a typical AT&T pricing plan, the surcharge of $0.35 and the cost per minute is the same as the direct dial outbound rate.
Use a discount carrier
The simplest way to cut your costs associated with calling cards is to switch to a discount carrier that specializes in the service. These niche carriers, such as VoiceNet, offer calling card rates that are usually lower than full-service carriers’ rates. VoiceNet advertises heavily in in-flight magazines and uses a wide network of independent sales agents. VoiceNet’s current program is a flat rate $0.149 card with no surcharge, which is one of the lowest rates in the industry.
Occasionally, other discount calling card providers spring up with rates that sound too good to be true. Be careful about doing business with these companies because their actual billed rates may be higher than their actual rates. When choosing a discount carrier, choose a stable carrier that has been in business for more than 2 years.
Once you have chosen the discount long-distance carrier for your calling cards, you should compare the cost. Normally, you can give your current calling card bill to the sales representative who will analyze it and offer a cost comparison. It is a good idea to then do your own comparison.
Prepaid cards
Prepaid calling cards are very lucrative for carriers, which is why they can afford to give them away as gifts so often. These cards are so lucrative because carriers get the revenue from the customer before they actually provide the service. In many cases, the carrier never does provide the service. Calling cards expire, and many are thrown away when they only have a couple of minutes remaining.
Most businesses should stay away from prepaid cards because they hurt cash flows and are difficult to manage. The expense of paying for calling cards before you use them shows up in the company’s books at least 2 months before it would have shown up with traditional pay-after-you-use-them cards. Keeping track of employees who use calling cards is another drawback of prepaid cards. Once the cards are issued, you never know how much they are used because the carrier will not send you a bill that shows the usage.
If you are willing to keep track of all the users yourself, then prepaid cards may be for you. For businesses that use temporary employees or fear their employees will fraudulently use calling cards, then prepaid cards may be the best option.
A few carriers offer a rechargeable prepaid card. ATX, a regional longdistance carrier in the Pennsylvania area, offers a superior rechargeable prepaid card. With rechargeable cards from ATX, a manager can issue cards to traveling employees with a limit, such as $50 per month. If the employee tries to make more calls, he has to call the home office and ask the manager to recharge the card. Rechargeable prepaid cards are very successful in limiting employee abuse and fraud.
Once a perpetrator obtains your calling card number and PIN, he can rack up thousands of dollars in fraudulent billing in just a few days. Using rechargeable prepaid calling cards that have a limit will minimize your risk of being defrauded.
1 + area code + number
Inbound long distance, also known as toll-free service, refers to a caller dialing an 800 number to reach a business. It is a toll-free call for the caller; the toll shows up on the business’ long-distance bill. Since the finite number of 800 numbers is running out, new numbers such as 888 and 877 are now used for toll-free calling.
Calling cards are most frequently used by callers who are traveling. Rather than use coins in a payphone or cause a charge on a host’s long-distance bill, calling cards offer a caller convenience and itemized billing each month. The complex world of long-distance service is not as baffling if you understand these three categories of any long-distance calling.
How a calling card call works
Calling card long-distance rates are higher than outbound and inbound rates. The cost of a calling card call normally includes a surcharge in addition to the per-minute rate. The surcharge may be as little as $0.15 per call or as much as $2.50 per call for some older cards still in circulation. The surcharge is designed to cover the cost of setting up the call.
During the past few years, the trend is that surcharges are lower or not charged at all. A business today must choose between cards with low rates that have a surcharge, or flat-rate cards that have no surcharge. In general, a business that makes very brief calling card calls should use a flat-rate card. Businesses that make long calls are probably better off with a traditional card that charges a surcharge. On a typical AT&T pricing plan, the surcharge of $0.35 and the cost per minute is the same as the direct dial outbound rate.
Use a discount carrier
The simplest way to cut your costs associated with calling cards is to switch to a discount carrier that specializes in the service. These niche carriers, such as VoiceNet, offer calling card rates that are usually lower than full-service carriers’ rates. VoiceNet advertises heavily in in-flight magazines and uses a wide network of independent sales agents. VoiceNet’s current program is a flat rate $0.149 card with no surcharge, which is one of the lowest rates in the industry.
Occasionally, other discount calling card providers spring up with rates that sound too good to be true. Be careful about doing business with these companies because their actual billed rates may be higher than their actual rates. When choosing a discount carrier, choose a stable carrier that has been in business for more than 2 years.
Once you have chosen the discount long-distance carrier for your calling cards, you should compare the cost. Normally, you can give your current calling card bill to the sales representative who will analyze it and offer a cost comparison. It is a good idea to then do your own comparison.
Prepaid cards
Prepaid calling cards are very lucrative for carriers, which is why they can afford to give them away as gifts so often. These cards are so lucrative because carriers get the revenue from the customer before they actually provide the service. In many cases, the carrier never does provide the service. Calling cards expire, and many are thrown away when they only have a couple of minutes remaining.
Most businesses should stay away from prepaid cards because they hurt cash flows and are difficult to manage. The expense of paying for calling cards before you use them shows up in the company’s books at least 2 months before it would have shown up with traditional pay-after-you-use-them cards. Keeping track of employees who use calling cards is another drawback of prepaid cards. Once the cards are issued, you never know how much they are used because the carrier will not send you a bill that shows the usage.
If you are willing to keep track of all the users yourself, then prepaid cards may be for you. For businesses that use temporary employees or fear their employees will fraudulently use calling cards, then prepaid cards may be the best option.
A few carriers offer a rechargeable prepaid card. ATX, a regional longdistance carrier in the Pennsylvania area, offers a superior rechargeable prepaid card. With rechargeable cards from ATX, a manager can issue cards to traveling employees with a limit, such as $50 per month. If the employee tries to make more calls, he has to call the home office and ask the manager to recharge the card. Rechargeable prepaid cards are very successful in limiting employee abuse and fraud.
Once a perpetrator obtains your calling card number and PIN, he can rack up thousands of dollars in fraudulent billing in just a few days. Using rechargeable prepaid calling cards that have a limit will minimize your risk of being defrauded.
Saturday, February 16, 2008
Long distance is now a commodity
Companies that built their own telecommunications networks such as Sprint and MCI began to win market share from AT&T. Hundreds of longdistance resellers also entered the foray. Long Distance Discount Savers was one such company. Later known as LDDS and then as WorldCom, this tiny Mississippi company soon became one of the most dominant telecommunications providers in the world in less than a decade. The 100-year dominant reign of AT&T was definitely over.
Residential and business customers now have more choices than ever for their long-distance service. Over the years, customers have left AT&T for a variety of reasons. Some prefer the more personal service smaller carriers offer. Some left because they think calls may be clearer on another carrier’s network. However, most left AT&T because they have found lower prices elsewhere.
Most industry insiders agree with the statement “long distance is now a commodity.” What they are really saying is that the service the end user receives does not vary from carrier to carrier. The sound quality of a longdistance phone call is so clear now that end users rarely experience any problems when making a long-distance call.
The core issues that separate one long-distance provider from another in today’s marketplace are advanced features, customer service, pricing, billing, and technical support. These are the issues that heavily influence telecom managers and corporate controllers today when negotiating new service with a long-distance provider.
Businesspeople in charge of managing their telecommunications services are under pressure from within their organization to ensure three things:
- Secure customized long-distance service that meets the specific needs of the organization.
- Choose a carrier that will not allow any service outages.
- Secure the lowest pricing available in the industry.
Residential and business customers now have more choices than ever for their long-distance service. Over the years, customers have left AT&T for a variety of reasons. Some prefer the more personal service smaller carriers offer. Some left because they think calls may be clearer on another carrier’s network. However, most left AT&T because they have found lower prices elsewhere.
Most industry insiders agree with the statement “long distance is now a commodity.” What they are really saying is that the service the end user receives does not vary from carrier to carrier. The sound quality of a longdistance phone call is so clear now that end users rarely experience any problems when making a long-distance call.
The core issues that separate one long-distance provider from another in today’s marketplace are advanced features, customer service, pricing, billing, and technical support. These are the issues that heavily influence telecom managers and corporate controllers today when negotiating new service with a long-distance provider.
Businesspeople in charge of managing their telecommunications services are under pressure from within their organization to ensure three things:
- Secure customized long-distance service that meets the specific needs of the organization.
- Choose a carrier that will not allow any service outages.
- Secure the lowest pricing available in the industry.
How does a long-distance call work?
Standard phone lines connect an end user to the local phone company’s central office. The central office computer, called a switch, interprets the numbers dialed and then routes the call to its next destination.
How a long-distance call works.
When the central office detects that “1 + area code” has been dialed and determines the call is to another LATA, it knows the call must be handed off to the long-distance carrier. The central office computer then queries a database to find out which long-distance carrier has been selected for the line. The PIC code is used by the local telephone company’s computers to keep track of a customer’s chosen long-distance carrier. Appendix 10B lists the most commonly used PIC codes.
Once the central office computer determines that the call will terminate outside the LATA, it connects the call to the caller’s chosen long-distance carrier. Although the switching equipment at the local carrier’s central office may be exactly the same as the long-distance carrier’s central office, the long-distance carrier’s central office is almost always called a point of presence. That term refers to the fact that the local carrier has a complete phone network within the LATA, while long-distance carriers only have limited network points within the LATA.
When a caller needs to make a long-distance call, the local exchange carrier’s central office directs the call to the nearest point of presence so the call can then be carried by the long-distance carrier. At the terminating end of the call, the long-distance carrier connects to the local carrier’s central office that serves the person being called.
These multiple interconnections and handoffs between central offices take place within milliseconds. The whole process is seamless to the end user, except for the occasional faint clicking sound that may be the result of antiquated equipment in an older central office.
When the central office detects that “1 + area code” has been dialed and determines the call is to another LATA, it knows the call must be handed off to the long-distance carrier. The central office computer then queries a database to find out which long-distance carrier has been selected for the line. The PIC code is used by the local telephone company’s computers to keep track of a customer’s chosen long-distance carrier. Appendix 10B lists the most commonly used PIC codes.
Once the central office computer determines that the call will terminate outside the LATA, it connects the call to the caller’s chosen long-distance carrier. Although the switching equipment at the local carrier’s central office may be exactly the same as the long-distance carrier’s central office, the long-distance carrier’s central office is almost always called a point of presence. That term refers to the fact that the local carrier has a complete phone network within the LATA, while long-distance carriers only have limited network points within the LATA.
When a caller needs to make a long-distance call, the local exchange carrier’s central office directs the call to the nearest point of presence so the call can then be carried by the long-distance carrier. At the terminating end of the call, the long-distance carrier connects to the local carrier’s central office that serves the person being called.
These multiple interconnections and handoffs between central offices take place within milliseconds. The whole process is seamless to the end user, except for the occasional faint clicking sound that may be the result of antiquated equipment in an older central office.
Friday, February 15, 2008
Customer Service Report (CSR) errors
The following items are the most common errors that can easily be located when auditing customer service records. Each item is an example of local telephone company overbilling, wherein the customer should be entitled to a refund.
Wrong PIC
To keep track of which long-distance carrier a customer is using, the local carrier uses the PIC code of that carrier. The PIC code may be expressed numerically on the CSR as in “222” or with letters, as in “MCI.” AT&T’s most commonly used PIC code is 288. The PIC code is stored in the local carrier’s central office and in its billing records. It will be printed on the CSR.
If a customer’s phone lines have the wrong PIC code, his long-distance traffic will be routed to that carrier. This is a very common problem, especially in the case of slamming, when a fraudulent carrier changes a customer’s PIC without the customer’s authorization. When auditing CSRs, you must check the PIC code on each line. If it is wrong, call your local carrier and have the company change it. Call your long-distance carrier if you do not know its correct PIC code. Appendix 10B lists common PIC codes.
Wrong LPIC
As a result of the Telecom Act of 1996, customers can now select their carrier for intralata calling. On the CSR, the code LPIC appears and is followed by the PIC code for the carrier. Many customers have moved their intralata traffic to their long-distance carrier, so their PIC code and LPIC code should be the same. If the wrong LPIC code is on the CSR, your calls will be handled by the wrong carrier. In the sample CSR in Figure 10.1, the second phone line shows “/LPIC TCB,” which means the intralata calls from that line will be carried by Telephone Company B. The customer should call Telephone Company C and have the company change it.
Too many 9ZR charges
As stated above, the 9ZR is the USOC for the end user common line charge, which is about $9 per line. Sometimes, the number of 9ZR charges is greater than the number of lines. This is especially true for large Centrex accounts that bill the 9ZR as one single-line item separate from the line charge. When auditing your CSR, count the number of lines and the number of 9ZR charges. If you are being overbilled, contact your local telephone company.
Wrong tax area
The code TAR indicates which tax area you are in. Taxes are based on where the customer is physically located. Some customers have a city address but are located outside the city limits. Such a customer should be exempt from any city taxes. In other cases, the local carrier enters the tax area of the billing address instead of the physical address of the customer. For example, a company based in downtown Chicago has a manufacturing facility in the suburbs. The taxes are lower in the suburbs, but if the phone company enters the wrong tax area, the customer will be overbilled.
Incorrect hunting sequence
HTG is the code for hunting service. If an incoming call finds your main number busy or gets no answer, hunting allows the call to automatically transfer to another line. If the second line is busy or unanswered, the incoming call hunts for another line. At the end of this “hunt group” of lines, the call will “rollover” back to the first line. Hunting is designed to prevent a business from missing out on important business calls.
A common error with hunting is that one of the numbers in the hunt group may be an old number that is no longer in use. In this case, the call will not work. Another problem is with the rollover feature. At the end of the hunt group, the call should be transferred back to the first number. If this is not set up properly, calls will be lost.
Hidden wire maintenance charges
Many local telephone bills do not offer an itemized list of all charges. Even simple phone bills with only one or two lines may contain hidden charges. You must check the CSR for these charges. The most common hidden charge is for wire maintenance. It is very common for a phone bill to simply say “monthly charge for local service” but the CSR lists MNTPB, the code for wire maintenance plans. If the customer has not ordered wire maintenance, this charge should be canceled.
Wrong mileage—first 1/4 mile
Point-to-point data circuits are billed according to the bandwidth and mileage of the circuit. The rate for the first 1/4 mile is higher than the rate for additional 1/4 miles. A 5-mile circuit will, therefore, be something like this:
First 1/4 mile:
$30
19 additional 1/4 miles @ $20:
$380
Total:
$410
If the data entry clerk makes an error when provisioning the above circuit, the customer may be billed each 1/4 mile at the higher “first mile” rate.
Wrong mileage—too much mileage
Another common error has to do with the exact mileage, which should be calculated according to the “airline mile” distance between the two local serving offices (LSO) at the ends of the circuit. If the carrier calculates the mileage according to the physical address of the two sites instead of the mileage between the two LSOs, you will be overbilled.
If you do not have access to telecom pricing software, you can double-check the mileage by giving the NPA-NXX (area code + prefix) for each location and requesting a new detailed circuit price quote from the carrier. Many carriers share software, so if you feel your current carrier may not be truthful, you can get the same information from another carrier.
Wrong mileage—double billing
Data circuits crossing LATA boundaries are usually provided by an LEC and an IXC, or long-distance carrier. The bill is handled by one of the carriers, normally the IXC. Sometimes, both carriers provide a bill for their percentage of the circuit. The customer might be billed 60% of the circuit by U S West and 40% of the circuit by WorldCom. The ratio is determined according to mileage. If 60% of the mileage is provided by U S West, then the customer’s rate will be multiplied by 60%. Unfortunately, some customers end up being billed 100% by each carrier. To ensure that you are not being overbilled, match each CSR and each phone bill to your corporate network diagram.
Hanging circuit
Each data circuit must connect two points. If a customer disconnects an unneeded circuit, she should no longer receive a bill for the circuit. But sometimes, the carrier only disconnects one of the two locations. It is difficult to catch this error by looking at the phone bill alone. This error is very obvious on the CSR, however. If the CSR reads CKL 1 (circuit location 1) and there is no CKL 2, you have found a hanging circuit. The LEC should completely disconnect the circuit, stop the monthly billing, and issue a refund.
You should also check the addresses at each end of the circuit. A travel agent had dedicated lines to an airline. The agent stopped selling tickets for that airline but never canceled the billing for the dedicated lines. When the CSRs were audited, the airline’s address showed up as CKL 2. The customer knew he was no longer doing business with the airline, so he canceled the circuits, saving the business about $3,000 per month.
Term plan error
Signing a 12-month term plan agreement will discount voice or data service pricing by 5% to 15%. Longer-term plans will generate greater discounts. Carriers frequently enter the wrong term plan on a CSR, resulting in missing discounts for the customer. To verify discount amounts, check the original term contract with the actual CSR. If the given discount is lower than the contracted discount, the LEC should issue a refund and correct the problem going forward. If neither customer nor carrier can produce a copy of the original contract, you may be out of luck. However, some have used this situation to eliminate an existing term commitment with the carrier.
Sliding scale line rates
Local accounts with more than 12 lines may qualify for sliding scale pricing. This is especially true with Centrex pricing. The billing may work like this:
First 25 Centrex lines @ $20 each:
1,$500
Next 100 Centrex lines @ $15 each:
$1,500
Next 100 Centrex lines @ $12 each:
$1,200
Total:
$3,200
Auditing the CSR might reveal that all 225 lines are being billed at the higher $20 per month rate. In this example, the customer would pay $4,500 per month instead of $3,200. This customer is entitled to a significant refund. To detect this error, the auditor must be familiar with the original contract terms or be willing to wade through the actual tariff to determine how the lines should be priced.
Loose calling cards
Few customers use the calling cards provided by their local telephone company. Lower rates are available through long-distance carriers. When a business changes calling card providers, it sometimes fails to cancel the old cards. A review of the CSR may reveal that active calling cards are still on the loose. This will not be evident by looking at the phone bill, unless someone uses the cards to make calls. Old cards should be deactivated anyway to avoid the risk of future billings if the cards are used by ex-employees or someone else.
Unused voice lines and data circuits
A very valuable piece of information on the CSR is the service address. Companies with multiple locations will often find, after they audit their CSRs, that they are still paying for lines at closed locations or at an ex-employee’s home. Some businesses detect this problem many years after they quit using the lines. They may have even placed a disconnection order with the phone company. If you have documentation to prove that the lines were canceled, you are entitled to a refund. Most carriers and customers fail to keep good records, however, and the customer will never get a refund.
Wrong PIC
To keep track of which long-distance carrier a customer is using, the local carrier uses the PIC code of that carrier. The PIC code may be expressed numerically on the CSR as in “222” or with letters, as in “MCI.” AT&T’s most commonly used PIC code is 288. The PIC code is stored in the local carrier’s central office and in its billing records. It will be printed on the CSR.
If a customer’s phone lines have the wrong PIC code, his long-distance traffic will be routed to that carrier. This is a very common problem, especially in the case of slamming, when a fraudulent carrier changes a customer’s PIC without the customer’s authorization. When auditing CSRs, you must check the PIC code on each line. If it is wrong, call your local carrier and have the company change it. Call your long-distance carrier if you do not know its correct PIC code. Appendix 10B lists common PIC codes.
Wrong LPIC
As a result of the Telecom Act of 1996, customers can now select their carrier for intralata calling. On the CSR, the code LPIC appears and is followed by the PIC code for the carrier. Many customers have moved their intralata traffic to their long-distance carrier, so their PIC code and LPIC code should be the same. If the wrong LPIC code is on the CSR, your calls will be handled by the wrong carrier. In the sample CSR in Figure 10.1, the second phone line shows “/LPIC TCB,” which means the intralata calls from that line will be carried by Telephone Company B. The customer should call Telephone Company C and have the company change it.
Too many 9ZR charges
As stated above, the 9ZR is the USOC for the end user common line charge, which is about $9 per line. Sometimes, the number of 9ZR charges is greater than the number of lines. This is especially true for large Centrex accounts that bill the 9ZR as one single-line item separate from the line charge. When auditing your CSR, count the number of lines and the number of 9ZR charges. If you are being overbilled, contact your local telephone company.
Wrong tax area
The code TAR indicates which tax area you are in. Taxes are based on where the customer is physically located. Some customers have a city address but are located outside the city limits. Such a customer should be exempt from any city taxes. In other cases, the local carrier enters the tax area of the billing address instead of the physical address of the customer. For example, a company based in downtown Chicago has a manufacturing facility in the suburbs. The taxes are lower in the suburbs, but if the phone company enters the wrong tax area, the customer will be overbilled.
Incorrect hunting sequence
HTG is the code for hunting service. If an incoming call finds your main number busy or gets no answer, hunting allows the call to automatically transfer to another line. If the second line is busy or unanswered, the incoming call hunts for another line. At the end of this “hunt group” of lines, the call will “rollover” back to the first line. Hunting is designed to prevent a business from missing out on important business calls.
A common error with hunting is that one of the numbers in the hunt group may be an old number that is no longer in use. In this case, the call will not work. Another problem is with the rollover feature. At the end of the hunt group, the call should be transferred back to the first number. If this is not set up properly, calls will be lost.
Hidden wire maintenance charges
Many local telephone bills do not offer an itemized list of all charges. Even simple phone bills with only one or two lines may contain hidden charges. You must check the CSR for these charges. The most common hidden charge is for wire maintenance. It is very common for a phone bill to simply say “monthly charge for local service” but the CSR lists MNTPB, the code for wire maintenance plans. If the customer has not ordered wire maintenance, this charge should be canceled.
Wrong mileage—first 1/4 mile
Point-to-point data circuits are billed according to the bandwidth and mileage of the circuit. The rate for the first 1/4 mile is higher than the rate for additional 1/4 miles. A 5-mile circuit will, therefore, be something like this:
First 1/4 mile:
$30
19 additional 1/4 miles @ $20:
$380
Total:
$410
If the data entry clerk makes an error when provisioning the above circuit, the customer may be billed each 1/4 mile at the higher “first mile” rate.
Wrong mileage—too much mileage
Another common error has to do with the exact mileage, which should be calculated according to the “airline mile” distance between the two local serving offices (LSO) at the ends of the circuit. If the carrier calculates the mileage according to the physical address of the two sites instead of the mileage between the two LSOs, you will be overbilled.
If you do not have access to telecom pricing software, you can double-check the mileage by giving the NPA-NXX (area code + prefix) for each location and requesting a new detailed circuit price quote from the carrier. Many carriers share software, so if you feel your current carrier may not be truthful, you can get the same information from another carrier.
Wrong mileage—double billing
Data circuits crossing LATA boundaries are usually provided by an LEC and an IXC, or long-distance carrier. The bill is handled by one of the carriers, normally the IXC. Sometimes, both carriers provide a bill for their percentage of the circuit. The customer might be billed 60% of the circuit by U S West and 40% of the circuit by WorldCom. The ratio is determined according to mileage. If 60% of the mileage is provided by U S West, then the customer’s rate will be multiplied by 60%. Unfortunately, some customers end up being billed 100% by each carrier. To ensure that you are not being overbilled, match each CSR and each phone bill to your corporate network diagram.
Hanging circuit
Each data circuit must connect two points. If a customer disconnects an unneeded circuit, she should no longer receive a bill for the circuit. But sometimes, the carrier only disconnects one of the two locations. It is difficult to catch this error by looking at the phone bill alone. This error is very obvious on the CSR, however. If the CSR reads CKL 1 (circuit location 1) and there is no CKL 2, you have found a hanging circuit. The LEC should completely disconnect the circuit, stop the monthly billing, and issue a refund.
You should also check the addresses at each end of the circuit. A travel agent had dedicated lines to an airline. The agent stopped selling tickets for that airline but never canceled the billing for the dedicated lines. When the CSRs were audited, the airline’s address showed up as CKL 2. The customer knew he was no longer doing business with the airline, so he canceled the circuits, saving the business about $3,000 per month.
Term plan error
Signing a 12-month term plan agreement will discount voice or data service pricing by 5% to 15%. Longer-term plans will generate greater discounts. Carriers frequently enter the wrong term plan on a CSR, resulting in missing discounts for the customer. To verify discount amounts, check the original term contract with the actual CSR. If the given discount is lower than the contracted discount, the LEC should issue a refund and correct the problem going forward. If neither customer nor carrier can produce a copy of the original contract, you may be out of luck. However, some have used this situation to eliminate an existing term commitment with the carrier.
Sliding scale line rates
Local accounts with more than 12 lines may qualify for sliding scale pricing. This is especially true with Centrex pricing. The billing may work like this:
First 25 Centrex lines @ $20 each:
1,$500
Next 100 Centrex lines @ $15 each:
$1,500
Next 100 Centrex lines @ $12 each:
$1,200
Total:
$3,200
Auditing the CSR might reveal that all 225 lines are being billed at the higher $20 per month rate. In this example, the customer would pay $4,500 per month instead of $3,200. This customer is entitled to a significant refund. To detect this error, the auditor must be familiar with the original contract terms or be willing to wade through the actual tariff to determine how the lines should be priced.
Loose calling cards
Few customers use the calling cards provided by their local telephone company. Lower rates are available through long-distance carriers. When a business changes calling card providers, it sometimes fails to cancel the old cards. A review of the CSR may reveal that active calling cards are still on the loose. This will not be evident by looking at the phone bill, unless someone uses the cards to make calls. Old cards should be deactivated anyway to avoid the risk of future billings if the cards are used by ex-employees or someone else.
Unused voice lines and data circuits
A very valuable piece of information on the CSR is the service address. Companies with multiple locations will often find, after they audit their CSRs, that they are still paying for lines at closed locations or at an ex-employee’s home. Some businesses detect this problem many years after they quit using the lines. They may have even placed a disconnection order with the phone company. If you have documentation to prove that the lines were canceled, you are entitled to a refund. Most carriers and customers fail to keep good records, however, and the customer will never get a refund.
Thursday, February 14, 2008
Sample CSR
The CSR has four different sections: header, list, bill, and service and equipment. The header section is repeated on each page of the CSR and contains information such as account number and bill date. The list section contains information about how the customer will be listed in the white pages, yellow pages, and directory assistance. The bill section contains the billing address, billed name, and tax jurisdiction. The final section, service and equipment, details all of the lines and services the carrier is providing for the customer.
Figure below is a sample CSR for a fictional customer in New York. The customer has two measured-rate business lines. Most of the RBOCs use a similar format for their CSRs. The following list offers a detailed explanation of the most relevant parts of this CSR. In the sample, many blocks are empty because there is no pertinent activity to document.
Account number This is the main telephone number followed by the three-digit customer code. Telephone companies use different customer codes to separate the records of this customer from the records of the previous customer who had this phone number. Some phone company CSRs use the code BTN, which stands for “billed telephone number,” for the main telephone number.
Class of service This is usually 1FB or 1MB, which stand for one flat-rate business line or one measured-rate business line, respectively.
Directory This block is used as a reference point, indicating which letter of the alphabet this business listing falls under in the directory.
Page The page number of the CSR.
Bill period This shows the most recent bill cycle.
Record statement Depending on the carrier and customer’s specific services, the CSR may have up to seven sections (or segments): Account, Line & Station, Key System, Special Service, Extra Listings, Account Summary, and S&E Cross Reference.
Print date This is the actual date this paper record was printed.
Print REA This block explains the reason for printing. BD indicates the record was printed because of the bill date.
Quantity This column shows the quantity of items listed in the next two columns: service and description.
Service This shows the USOCs that correspond to the customer’s services.
Description This column is as close as we can get to an actual plain-English description of customer services.
L This stands for the last service order action that was performed for the item listed in the description column. The possible codes are E, I, and T, which stand for enter, in, and to, respectively.
Activity date This is the date of the last action for the item.
Total This column shows the charges for each item. Where no charge appears, as in the case of HTG (or hunting), it is a free service.
T This column uses numeric codes to show the tax status of each item. The following codes determine which taxes apply to each service:
Federal, state, and local;
No taxes;
Federal;
State and local;
Federal and state;
State.
A The activity column contains an asterisk when an item has been changed since the printing of the last CSR.
LN Listed name. This column shows exactly how the business will be listed in the white pages and directory assistance.
LA Listed address. This column shows how the address is listed in the white pages and directory assistance.
SA Service address. This is the physical location of the phone lines.
LOC Location. This column indicates the floor or building number where the service is located. This field helps telephone company technicians locate the physical location of the service.
YPH Yellow pages heading.
BILL This shows the start of the CSR’s bill section.
BN Bill name. The name of the business as it appears on the phone bill. This may differ from the listed name.
BA Bill address. The actual address where the phone bill is sent. In this fictional example, the bill is sent to Acme Manufacturing’s home office in Dallas.
PO This shows the city, state, and zip code of the bill address.
CCH This field indicates the number of calling card holders.
TAR This indicates the tax area of the customer’s physical location and determines which taxes are in effect.
S&E This shows the start of the CSR’s service and equipment section.
BSX This shows that the customer has two active calling cards.
LUD This is the USOC for a telephone company’s Local Usage Discount Plan.
1MB One measured-rate business line. In the description column, “/PIC TCE” shows that Telephone Company E is the PIC. “/LPIC TCE” shows that Telephone Company E is the carrier for intralata calls. Further down in the CSR, notice that the second line has Telephone Company B as the LATA PIC (LPIC). The intralata calls will be carried by Telephone Company B, not Telephone Company E.
RJ21X This is the USOC for a common type of wall jack used by local carriers. The RJ21X jack serves as the demarcation point where the phone company’s network connects to the customer’s inside wiring. Note there is no charge for the RJ21X.
TTB Touch-tone business. With many carriers, this is not a free service, but this telephone company does not charge for touch-tone.
ALN Additional line or auxiliary line. The main number on a telephone account is often called the BTN (billed telephone number) and additional lines are called WTNs (working telephone numbers). A simple technique for CSR auditing is to verify that each ALN shows up as an exact repeat of the others. If they are not exactly the same, you may have found an incorrect PIC or LPIC, or you may have found hidden charges such as wire maintenance.
MNTPB Wire maintenance plan. The actual phone bill may not itemize this service. Note that MNTPB only appears on one of the two lines. This indicates that the customer is probably unaware of this charge, and it should be canceled.
HTG Hunting. In this example, if the calls are not answered on 555-1000, the call is forwarded to 555-1001.
CHN Card holder name. This shows the name of the employee who has been assigned a calling card. If you recognize the name of an ex-employee, cancel the card to avoid fraudulent charges. Most CSRs do not show names.
9ZR This shows the number of FCC line charges. In this example, the customer is being charged three 9ZRs but only has two lines. This error should be corrected, and Telephone Company C should issue a refund.
Figure below is a sample CSR for a fictional customer in New York. The customer has two measured-rate business lines. Most of the RBOCs use a similar format for their CSRs. The following list offers a detailed explanation of the most relevant parts of this CSR. In the sample, many blocks are empty because there is no pertinent activity to document.
Account number This is the main telephone number followed by the three-digit customer code. Telephone companies use different customer codes to separate the records of this customer from the records of the previous customer who had this phone number. Some phone company CSRs use the code BTN, which stands for “billed telephone number,” for the main telephone number.
Class of service This is usually 1FB or 1MB, which stand for one flat-rate business line or one measured-rate business line, respectively.
Directory This block is used as a reference point, indicating which letter of the alphabet this business listing falls under in the directory.
Page The page number of the CSR.
Bill period This shows the most recent bill cycle.
Record statement Depending on the carrier and customer’s specific services, the CSR may have up to seven sections (or segments): Account, Line & Station, Key System, Special Service, Extra Listings, Account Summary, and S&E Cross Reference.
Print date This is the actual date this paper record was printed.
Print REA This block explains the reason for printing. BD indicates the record was printed because of the bill date.
Quantity This column shows the quantity of items listed in the next two columns: service and description.
Service This shows the USOCs that correspond to the customer’s services.
Description This column is as close as we can get to an actual plain-English description of customer services.
L This stands for the last service order action that was performed for the item listed in the description column. The possible codes are E, I, and T, which stand for enter, in, and to, respectively.
Activity date This is the date of the last action for the item.
Total This column shows the charges for each item. Where no charge appears, as in the case of HTG (or hunting), it is a free service.
T This column uses numeric codes to show the tax status of each item. The following codes determine which taxes apply to each service:
Federal, state, and local;
No taxes;
Federal;
State and local;
Federal and state;
State.
A The activity column contains an asterisk when an item has been changed since the printing of the last CSR.
LN Listed name. This column shows exactly how the business will be listed in the white pages and directory assistance.
LA Listed address. This column shows how the address is listed in the white pages and directory assistance.
SA Service address. This is the physical location of the phone lines.
LOC Location. This column indicates the floor or building number where the service is located. This field helps telephone company technicians locate the physical location of the service.
YPH Yellow pages heading.
BILL This shows the start of the CSR’s bill section.
BN Bill name. The name of the business as it appears on the phone bill. This may differ from the listed name.
BA Bill address. The actual address where the phone bill is sent. In this fictional example, the bill is sent to Acme Manufacturing’s home office in Dallas.
PO This shows the city, state, and zip code of the bill address.
CCH This field indicates the number of calling card holders.
TAR This indicates the tax area of the customer’s physical location and determines which taxes are in effect.
S&E This shows the start of the CSR’s service and equipment section.
BSX This shows that the customer has two active calling cards.
LUD This is the USOC for a telephone company’s Local Usage Discount Plan.
1MB One measured-rate business line. In the description column, “/PIC TCE” shows that Telephone Company E is the PIC. “/LPIC TCE” shows that Telephone Company E is the carrier for intralata calls. Further down in the CSR, notice that the second line has Telephone Company B as the LATA PIC (LPIC). The intralata calls will be carried by Telephone Company B, not Telephone Company E.
RJ21X This is the USOC for a common type of wall jack used by local carriers. The RJ21X jack serves as the demarcation point where the phone company’s network connects to the customer’s inside wiring. Note there is no charge for the RJ21X.
TTB Touch-tone business. With many carriers, this is not a free service, but this telephone company does not charge for touch-tone.
ALN Additional line or auxiliary line. The main number on a telephone account is often called the BTN (billed telephone number) and additional lines are called WTNs (working telephone numbers). A simple technique for CSR auditing is to verify that each ALN shows up as an exact repeat of the others. If they are not exactly the same, you may have found an incorrect PIC or LPIC, or you may have found hidden charges such as wire maintenance.
MNTPB Wire maintenance plan. The actual phone bill may not itemize this service. Note that MNTPB only appears on one of the two lines. This indicates that the customer is probably unaware of this charge, and it should be canceled.
HTG Hunting. In this example, if the calls are not answered on 555-1000, the call is forwarded to 555-1001.
CHN Card holder name. This shows the name of the employee who has been assigned a calling card. If you recognize the name of an ex-employee, cancel the card to avoid fraudulent charges. Most CSRs do not show names.
9ZR This shows the number of FCC line charges. In this example, the customer is being charged three 9ZRs but only has two lines. This error should be corrected, and Telephone Company C should issue a refund.
Tuesday, February 12, 2008
Customer service records
The customer service record (CSR) is a copy of how a customer’s record appears in the local carrier’s computers. Like other computer records, the CSR is arcane and not much fun to look at. However, a complete telecommunications audit should include at least a cursory review of your CSRs. Most local phone bills lump multiple charges under one heading labeled “monthly service” but the bill does not itemize the charges. This post explains each item on a sample CSR, lists the most prevalent CSR errors, and lists the most common codes used in CSRs. The main value of being able to interpret a CSR is that you can see, in detail, exactly what charges are being billed.
Some local phone companies, such as Pacific Telesis, send their customers one copy of the CSR each year. Most carriers will provide a CSR copy in a few days at no charge or for a small fee.
Universal service order codes
The CSR is a database record that uses universal service order codes (USOC) to describe each detail of your account. USOCs were used before divestiture, when all of the RBOCs were still part of the Bell System, so many of them are still consistent today. Independent LECs such as GTE and SNET use CSRs but their USOCs differ from the RBOCs.
Your monthly telephone bill is generated based on the items in your CSR. Each item is billed according to the rate assigned to that USOC. If the USOC is incorrect, your phone bill will be inaccurate, and you will either be overor undercharged. This is how one flat-rate business line with touch-tone service will appear on a CSR:
1FB - $20.00
TTB - $5.00
9ZR - $8.30
Total: $33.30
1FB is the USOC for one flat-rate business line. The USOC for a measured-rate business line is 1MB. TTB is the USOC for touch-tone business. 9ZR, if itemized on the phone bill, is the FCC line charge, which is also called the end user common line charge (EUCL). The EUCL rate is raised regularly, and, ironically, this money does not go to the FCC. This fee goes straight to the local carrier and is more accurately described on some bills as the “FCC-approved line charge.”
These are the most common USOCs, but thousands of others exist, and new ones are invented daily to describe carriers’ new offerings. Appendix 10A contains a list of 100 of the most commonly-used USOCs, but keep in mind that USOCs are not universally used by each carrier. Most LEC customer service representatives will take time to explain the details of your CSR. If you plan to review a large number of CSRs, you should try to sweet-talk your LEC representative into giving you its internal USOC dictionary.
Armed with a list of USOCs, and a little patience, you should be able to interpret your own CSRs and audit them for accuracy. If you have complex services and want to be absolutely sure your records are accurate, hire a consultant to perform a detailed audit of your CSRs. Because CSR auditing is so tedious, the consultant will probably charge an hourly rate in addition to 50% of the monthly savings and refunds implemented on your behalf.
Some local phone companies, such as Pacific Telesis, send their customers one copy of the CSR each year. Most carriers will provide a CSR copy in a few days at no charge or for a small fee.
Universal service order codes
The CSR is a database record that uses universal service order codes (USOC) to describe each detail of your account. USOCs were used before divestiture, when all of the RBOCs were still part of the Bell System, so many of them are still consistent today. Independent LECs such as GTE and SNET use CSRs but their USOCs differ from the RBOCs.
Your monthly telephone bill is generated based on the items in your CSR. Each item is billed according to the rate assigned to that USOC. If the USOC is incorrect, your phone bill will be inaccurate, and you will either be overor undercharged. This is how one flat-rate business line with touch-tone service will appear on a CSR:
1FB - $20.00
TTB - $5.00
9ZR - $8.30
Total: $33.30
1FB is the USOC for one flat-rate business line. The USOC for a measured-rate business line is 1MB. TTB is the USOC for touch-tone business. 9ZR, if itemized on the phone bill, is the FCC line charge, which is also called the end user common line charge (EUCL). The EUCL rate is raised regularly, and, ironically, this money does not go to the FCC. This fee goes straight to the local carrier and is more accurately described on some bills as the “FCC-approved line charge.”
These are the most common USOCs, but thousands of others exist, and new ones are invented daily to describe carriers’ new offerings. Appendix 10A contains a list of 100 of the most commonly-used USOCs, but keep in mind that USOCs are not universally used by each carrier. Most LEC customer service representatives will take time to explain the details of your CSR. If you plan to review a large number of CSRs, you should try to sweet-talk your LEC representative into giving you its internal USOC dictionary.
Armed with a list of USOCs, and a little patience, you should be able to interpret your own CSRs and audit them for accuracy. If you have complex services and want to be absolutely sure your records are accurate, hire a consultant to perform a detailed audit of your CSRs. Because CSR auditing is so tedious, the consultant will probably charge an hourly rate in addition to 50% of the monthly savings and refunds implemented on your behalf.
Monday, February 11, 2008
The payphone surcharge
Prior to the Telecom Act of 1996, payphone owners received no compensation for 800 calls from their payphone. Their $1,000 payphone equipment was being used for free, and the “free caller” tied up the phone, preventing a paying customer from using it. Today, this has changed. If a caller dials an 800 number from a payphone, the long-distance carrier handling the call must pay the payphone owner $0.28 for each call. This small amount of revenue slowly trickles in, but in the high-overhead payphone business, revenue from the surcharge makes all the difference.
Sunday, February 10, 2008
Saving money by using a customer-owned payphone
Besides using a payphone provided by the local phone company, a business may decide to use a private payphone company, or purchase and install its own payphone. Either way, the principle is the same. Many convenience store chains use private payphone companies such as the People’s Telephone Company, one of the largest private payphone companies.
The private payphone company installs and maintains its own payphone at the convenience store. If the local phone company already has a payphone on-site, which is usually the case, the private payphone company requests that it be removed. The local company will require a letter of agency signed by the site owner prior to honoring any of the private company’s requests.
Once the old payphone is removed, the private payphone company orders a line from the local phone company and physically connects its payphone to the line. All installation costs should be absorbed by the private payphone company. The company should also pay the $40 bill for the line each month.
Before removing its payphone, the local phone company will probably send a sales representative out to the site owner to try to convince him not to change anything. Most of the time it is too late, because private payphone companies usually sign 5-year contracts with their customers prior to contacting the local carrier. Customers considering signing one of these contracts should contact their local carrier first. If the local carrier can offer a similar commission check each month, then the site owner should not change. Local carriers normally offer commissions on coin revenue only, not long-distance revenue.
As expected, the private payphone vendor will pay the site owner a monthly commission on both the coin calls and long-distance calls. To handle all of the operator-assisted calls and long-distance calls, the private payphone company contracts an OSP, such as AT&T, Sprint, or Opticom, one of the leading independent OSPs.
The private payphone company installs and maintains its own payphone at the convenience store. If the local phone company already has a payphone on-site, which is usually the case, the private payphone company requests that it be removed. The local company will require a letter of agency signed by the site owner prior to honoring any of the private company’s requests.
Once the old payphone is removed, the private payphone company orders a line from the local phone company and physically connects its payphone to the line. All installation costs should be absorbed by the private payphone company. The company should also pay the $40 bill for the line each month.
Before removing its payphone, the local phone company will probably send a sales representative out to the site owner to try to convince him not to change anything. Most of the time it is too late, because private payphone companies usually sign 5-year contracts with their customers prior to contacting the local carrier. Customers considering signing one of these contracts should contact their local carrier first. If the local carrier can offer a similar commission check each month, then the site owner should not change. Local carriers normally offer commissions on coin revenue only, not long-distance revenue.
As expected, the private payphone vendor will pay the site owner a monthly commission on both the coin calls and long-distance calls. To handle all of the operator-assisted calls and long-distance calls, the private payphone company contracts an OSP, such as AT&T, Sprint, or Opticom, one of the leading independent OSPs.
Saturday, February 9, 2008
Commissions directly from the operator services provider
In many markets, the site owner can choose the long-distance provider for each payphone on the premise, even if the physical payphone is owned by the local phone company. Another way to impact your bottom line with payphones is to negotiate a separate commission agreement directly with a long-distance carrier. The local phone company still provides the payphone, whether or not you pay for it each month.
In this case, the long-distance carrier is functioning as an operator services provider (OSP). The OSP handles most operator-assisted calls, and the site owner is paid a monthly commission by the OSP. The commission rate is 5% to 25% of the operator-assisted calls only; the local carrier keeps all the coin revenue.
In this case, the long-distance carrier is functioning as an operator services provider (OSP). The OSP handles most operator-assisted calls, and the site owner is paid a monthly commission by the OSP. The commission rate is 5% to 25% of the operator-assisted calls only; the local carrier keeps all the coin revenue.
Saving money on semipublic payphones
In many states, a site owner does not have to pay for a semipublic payphone. There are varying definitions for the term, but usually semipublic means the payphone is accessible to the general public. The classic example is of a payphone at the back of a loading dock. Even though the loading dock itself may close for business at 5 p.m., the payphone is still available for someone walking by. In this example, the business should be able to get the local phone company to stop charging it for the payphone each month. On the other hand, the phone company may just decide to remove the phone at that point.
Sunday, February 3, 2008
Capturing loose traffic
If you have loose traffic, immediately inform your local carrier and your long-distance carrier. To get rid of loose traffic, the following steps, listed in order of urgency, should be followed:
- Change your PIC code. Make your local carrier change the PIC code on your lines, both in its billing system and at the central office. Then have the company put a PIC freeze on all lines.
- Add the lines to your long-distance account. Ensure that your longdistance carrier is aware of the line numbers. Make sure it adds the line numbers to your main account.
- Dispute the charges. Dispute the charges with your local carrier. You have the option of withholding payment for these charges. The local carrier will not disconnect your local lines for nonpayment of another carrier’s charges.
- Negotiate a refund. Negotiate a refund of the overcharges with the carrier that charged you. If the loose traffic is due to a carrier error, insist that it issue an invoice credit equal to 100% of the charges. The carrier will probably refuse to issue a full refund, but it will agree to rerate the traffic and issue a partial refund.
Although these are simple steps, many things can go wrong when trying to eliminate loose traffic. It has been my experience that a business with 10 or more locations will have loose traffic almost every month. A wise customer checks his bills every month for discrepancies, especially loose traffic errors.
Loose traffic rerate credits
Ift a customer has had his long distance billed as loose traffic, he is usually entitled to a refund. Unless the problem is the customer’s fault, customers should not be required to pay more than they would have normally paid if the long-distance calls had been billed correctly. Loose traffic happens for a variety of reasons, and it may be impossible to figure out how it happened and who is at fault. If you cannot convince the carrier that it is the company’s fault that you were overbilled, the carrier will resist giving a refund. The customer should steer the negotiation away from faultfinding and concentrate on the fact that the rates paid were too high and unfair.
Loose traffic may only involve two carriers: your local carrier and your authorized long-distance carrier. At other times, however, three carriers may be involved: the local carrier, your authorized long-distance carrier, and another long-distance carrier. If you have been slammed, however, it is likely that a fourth company has joined the party—a billing company. Billing companies such as USBI and Enhanced Services Billing (ESBI) are legitimate companies that handle the billing for fraudulent companies such as NOS and Hold. What follows is an example of how carriers operate using Luigi’s Automotive Supply, a fictional Los Angeles company.
Luigi’s local carrier is SBC Communications. Sprint is his long-distance carrier. A representative from Scamco Long Distance places an order with SBC to switch Luigi’s long distance to Scamco. Because Scamco is a small new company with no billing agreement with SBC, Scamco has USBI process the billing. USBI represents hundreds of small telecom carriers and has a shared-billing arrangement with SBC. SBC is happy to make the change because it keeps a portion of the billing. In this fictional, but nonetheless realistic, example Luigi has four phone companies to deal with: SBC, Sprint, USBI, and Scamco. Table 8.2 shows how Luigi’s long distance cost has drastically increased as a result of the slam.
The full recourse option
If the customer cannot negotiate a refund, a full recourse of the charges can be requested with the local carrier. Explain to your local carrier that you are disputing the full amount of the charges billed by the fraudulent company. Be sure to exclude that amount from payment of your local carrier’s bill.
The local carrier then notifies the fraudulent carrier that the charges are being disputed, and the fraudulent carrier has a limited time (usually 60 days) to respond. Fraudulent carriers usually do not respond, and the local carrier credits the customer’s bill in the full amount.
Unethical phone companies rarely fight these disputes. In fact, many fraudulent companies are so eager to avoid customer complaints to the FCC that could result in stiff fines that they readily offer refund credits. Their phone greeting is practically “Thanks for calling Scamco, would you like a refund?”
Collect calls
Collect calls are handled by AT&T, WorldCom, Sprint, and a host of collect call niche providers. The charges for these calls usually appear in the last pages of the local bill.
Collect calls are fairly straightforward: You call collect and the person you called is charged. Encourage your employees to use 800 numbers or calling cards instead of calling collect. You can also block collect calls with the local phone company. This forces the caller to use another method to complete the call. But this is not a solution for everybody. Organizations such as law enforcement, hospitals, bail bondsmen, and lawyers regularly receive important collect calls.
900 calls
900 calls are expensive because the caller is paying for the information given by the 900 provider in addition to the long-distance charges associated with the call. Almost all 900 calling is billed on the local bill. In this way, the call is handled much the same as collect calls. 900 services are usually provided by the big long-distance companies. If you call a 900 number, you will probably see a charge from AT&T on your local bill.
900 calling has a well-earned stigma, but some of the calling is legitimate, such as technical support centers that use 900 numbers. If you have determined that your business does not need 900 calling, call your local phone company and have it block all 900 and 976 calling. 976 numbers function like 900 numbers but are based in your local market.
The block is ineffective against some 900 numbers, however, because they are accessed by dialing an 800 number first. 900 service providers are aware that most businesses block 900 dialing through their PBX or through the local carrier’s central office, so they have invented a way to get past this obstacle. A caller dials an 800 number to get past the PBX, and then the call is transferred to the 900 number.
Miscellaneous monthly fees
If loose traffic, slamming, collect calls, and 900 calls are not bad enough, local bills are now fair game for a whole host of miscellaneous fees. The charges already described are all usage-based, but fees are a fixed expense each month. I have seen businesses waste thousands of dollars a year on fees that should have been canceled.
Some fees are legitimate, such as charges for voice mail, Internet access, and Web site hosting. Vendors that supply these services choose to do their billing through the local phone company because it makes collecting their money easier. As long as the customer verifies the charges on the bills each month, misbilling should be minimal.
A big problem for customers is that phone companies charge fees as a part of almost every service. Customers moving their loose traffic from their local bill to their main long-distance account will still be billed a monthly service fee of $5 to $20 just to maintain an account with the old carrier. Some carriers bill a monthly fee for each individual line on the account. Not only is it important to move the traffic, it is also necessary to inform the carrier to cancel the account.
Cramming
Cramming is the process of adding services or fees to a customer’s phone bill without permission. The services are often legitimate, but the customer does not want them. A local phone company representative may have added them intentionally or accidentally. Customer service representatives are often paid a commission on each additional service they sell a customer.
Another way to accumulate fees is to make collect calls or 900 calls. Some 900 numbers, when called just one time, will enroll the caller into a monthly “membership” program. If one of your employees calls a psychic line one time, you may be enrolled as a member. Your local bill will then include a $50 membership fee each month.
Many unethical companies add monthly fees to your local bill and provide nothing in return. They deceptively give the fee a legitimate sounding name, such as “network management” or “call reporting.” When the average accounts payable clerk sees the charge, she simply pays the bill rather than question the charges.
The key to avoiding or reducing the risk of cramming, slamming, collect calls, and 900 calls is to spend a few minutes each month scanning your local bills. Large companies should consider hiring an outside consulting firm for a telecom audit once a year. Discrepancies should be corrected immediately. Be firm with carriers and insist on refunds.
- Change your PIC code. Make your local carrier change the PIC code on your lines, both in its billing system and at the central office. Then have the company put a PIC freeze on all lines.
- Add the lines to your long-distance account. Ensure that your longdistance carrier is aware of the line numbers. Make sure it adds the line numbers to your main account.
- Dispute the charges. Dispute the charges with your local carrier. You have the option of withholding payment for these charges. The local carrier will not disconnect your local lines for nonpayment of another carrier’s charges.
- Negotiate a refund. Negotiate a refund of the overcharges with the carrier that charged you. If the loose traffic is due to a carrier error, insist that it issue an invoice credit equal to 100% of the charges. The carrier will probably refuse to issue a full refund, but it will agree to rerate the traffic and issue a partial refund.
Although these are simple steps, many things can go wrong when trying to eliminate loose traffic. It has been my experience that a business with 10 or more locations will have loose traffic almost every month. A wise customer checks his bills every month for discrepancies, especially loose traffic errors.
Loose traffic rerate credits
Ift a customer has had his long distance billed as loose traffic, he is usually entitled to a refund. Unless the problem is the customer’s fault, customers should not be required to pay more than they would have normally paid if the long-distance calls had been billed correctly. Loose traffic happens for a variety of reasons, and it may be impossible to figure out how it happened and who is at fault. If you cannot convince the carrier that it is the company’s fault that you were overbilled, the carrier will resist giving a refund. The customer should steer the negotiation away from faultfinding and concentrate on the fact that the rates paid were too high and unfair.
Loose traffic may only involve two carriers: your local carrier and your authorized long-distance carrier. At other times, however, three carriers may be involved: the local carrier, your authorized long-distance carrier, and another long-distance carrier. If you have been slammed, however, it is likely that a fourth company has joined the party—a billing company. Billing companies such as USBI and Enhanced Services Billing (ESBI) are legitimate companies that handle the billing for fraudulent companies such as NOS and Hold. What follows is an example of how carriers operate using Luigi’s Automotive Supply, a fictional Los Angeles company.
Luigi’s local carrier is SBC Communications. Sprint is his long-distance carrier. A representative from Scamco Long Distance places an order with SBC to switch Luigi’s long distance to Scamco. Because Scamco is a small new company with no billing agreement with SBC, Scamco has USBI process the billing. USBI represents hundreds of small telecom carriers and has a shared-billing arrangement with SBC. SBC is happy to make the change because it keeps a portion of the billing. In this fictional, but nonetheless realistic, example Luigi has four phone companies to deal with: SBC, Sprint, USBI, and Scamco. Table 8.2 shows how Luigi’s long distance cost has drastically increased as a result of the slam.
The full recourse option
If the customer cannot negotiate a refund, a full recourse of the charges can be requested with the local carrier. Explain to your local carrier that you are disputing the full amount of the charges billed by the fraudulent company. Be sure to exclude that amount from payment of your local carrier’s bill.
The local carrier then notifies the fraudulent carrier that the charges are being disputed, and the fraudulent carrier has a limited time (usually 60 days) to respond. Fraudulent carriers usually do not respond, and the local carrier credits the customer’s bill in the full amount.
Unethical phone companies rarely fight these disputes. In fact, many fraudulent companies are so eager to avoid customer complaints to the FCC that could result in stiff fines that they readily offer refund credits. Their phone greeting is practically “Thanks for calling Scamco, would you like a refund?”
Collect calls
Collect calls are handled by AT&T, WorldCom, Sprint, and a host of collect call niche providers. The charges for these calls usually appear in the last pages of the local bill.
Collect calls are fairly straightforward: You call collect and the person you called is charged. Encourage your employees to use 800 numbers or calling cards instead of calling collect. You can also block collect calls with the local phone company. This forces the caller to use another method to complete the call. But this is not a solution for everybody. Organizations such as law enforcement, hospitals, bail bondsmen, and lawyers regularly receive important collect calls.
900 calls
900 calls are expensive because the caller is paying for the information given by the 900 provider in addition to the long-distance charges associated with the call. Almost all 900 calling is billed on the local bill. In this way, the call is handled much the same as collect calls. 900 services are usually provided by the big long-distance companies. If you call a 900 number, you will probably see a charge from AT&T on your local bill.
900 calling has a well-earned stigma, but some of the calling is legitimate, such as technical support centers that use 900 numbers. If you have determined that your business does not need 900 calling, call your local phone company and have it block all 900 and 976 calling. 976 numbers function like 900 numbers but are based in your local market.
The block is ineffective against some 900 numbers, however, because they are accessed by dialing an 800 number first. 900 service providers are aware that most businesses block 900 dialing through their PBX or through the local carrier’s central office, so they have invented a way to get past this obstacle. A caller dials an 800 number to get past the PBX, and then the call is transferred to the 900 number.
Miscellaneous monthly fees
If loose traffic, slamming, collect calls, and 900 calls are not bad enough, local bills are now fair game for a whole host of miscellaneous fees. The charges already described are all usage-based, but fees are a fixed expense each month. I have seen businesses waste thousands of dollars a year on fees that should have been canceled.
Some fees are legitimate, such as charges for voice mail, Internet access, and Web site hosting. Vendors that supply these services choose to do their billing through the local phone company because it makes collecting their money easier. As long as the customer verifies the charges on the bills each month, misbilling should be minimal.
A big problem for customers is that phone companies charge fees as a part of almost every service. Customers moving their loose traffic from their local bill to their main long-distance account will still be billed a monthly service fee of $5 to $20 just to maintain an account with the old carrier. Some carriers bill a monthly fee for each individual line on the account. Not only is it important to move the traffic, it is also necessary to inform the carrier to cancel the account.
Cramming
Cramming is the process of adding services or fees to a customer’s phone bill without permission. The services are often legitimate, but the customer does not want them. A local phone company representative may have added them intentionally or accidentally. Customer service representatives are often paid a commission on each additional service they sell a customer.
Another way to accumulate fees is to make collect calls or 900 calls. Some 900 numbers, when called just one time, will enroll the caller into a monthly “membership” program. If one of your employees calls a psychic line one time, you may be enrolled as a member. Your local bill will then include a $50 membership fee each month.
Many unethical companies add monthly fees to your local bill and provide nothing in return. They deceptively give the fee a legitimate sounding name, such as “network management” or “call reporting.” When the average accounts payable clerk sees the charge, she simply pays the bill rather than question the charges.
The key to avoiding or reducing the risk of cramming, slamming, collect calls, and 900 calls is to spend a few minutes each month scanning your local bills. Large companies should consider hiring an outside consulting firm for a telecom audit once a year. Discrepancies should be corrected immediately. Be firm with carriers and insist on refunds.
Telecom: Why all the loose traffic?
Loose traffic occurs for a number of reasons. Sometimes it is the customer’s fault; but usually it is the fault of one of the phone companies. Regardless of who is at fault, customers pay double or triple what they would normally pay for these long-distance calls. The problem should be corrected immediately.
New lines added by the customer
Because of the recent explosion in the use of computer modems and fax machines, customers regularly add additional phone lines to connect to these devices. When you order a new phone line from your LEC, the company always asks which long-distance carrier you want assigned to the new line. If you fail to notify your long-distance carrier you will have loose traffic. The line will not bill on your master long-distance account; instead, the calls on this line will bill on your local bill at high nondiscounted rates.
In the sample local bill in Figure 4.2, Acme Manufacturing needed two new phone lines to facilitate its new computerized part ordering system. When ordering the phone lines from Telephone Company A, Acme specified that both lines should have Telephone Company B as the long-distance carrier. Because it never informed Telephone Company B of the new lines, the long-distance calls on these lines are billed on the last few pages of the Telephone Company A local bill.
PIC code errors
Another reason loose traffic may appear has to do with phone company errors. The local carrier controls which long-distance company is a customer’s PIC. Each long-distance carrier has its own PIC code, which is entered into the local carrier’s central office and into its billing computers.
If an overworked phone company billing representative accidentally enters the wrong PIC code for your lines, your long-distance calls will be handled by the wrong carrier. These calls will be billed on your local bill. Many carriers have multiple PIC codes, and you must ensure that the correct one is in place. Certain AT&T customers use 732 as their PIC code, but if the more common AT&T PIC code of 228 is used, the calls still might bill on the local bill.
Mismatch at the central office
Even if the PIC code is correct in your local telephone company’s billing system, it may be incorrect at its central office. Since the billing computers and central office computers are usually separate systems, mismatches frequently occur. In this case, loose traffic might appear on your bill. This problem is especially prevalent when you switch long-distance carriers. Local carriers are notorious for changing the PIC in the billing system but failing to do so at the central office. Of course, the end result is that the customer pays the old rates for another month or two until somebody figures out why the change never occurred.
PIC freeze
Once a customer is satisfied that his lines have the correct PIC code, it is a good idea to request a PIC freeze with your local carrier. This “freezes” the PIC choice and prevents anyone from changing your long-distance carrier again unless the company has written permission from you.
Slamming
Slamming is the fraudulent practice of changing someone else’s long-distance carrier without that person’s permission. This is a common practice in the industry, especially among entrepreneurial start-up long-distance companies and multilevel marketing long-distance companies. If your long distance suddenly starts to appear on your local bill and you do not recognize the carrier, you have been slammed.
Slamming methods
The latest slamming techniques are becoming increasingly creative. Fraudulent carriers create sweepstakes with a free car or a cruise as the grand prize. To enroll in the sweepstakes, you fill out a small card from a countertop display found in convenience stores and restaurants. If you read the fine print on the card, you will find that you have just agreed to switch your long-distance carrier. (Do not count on taking that free cruise anytime soon.)
One of the most creative techniques has to do with the name of the long-distance carrier, as in the case of long-distance companies called “I Don’t Care” and “I Don’t Know.” When a new customer orders lines from a local carrier, the local carrier’s representative asks, “Who do you want as your long distance provider?” If the customer replies, “I don’t care,” then he gets his long-distance from the I Don’t Care Long-Distance Company.
Another company that is successful in securing new customers fraudulently is Hold, Inc. That company’s telemarketer calls you for an innocent-sounding survey, then suddenly asks “May I put you on hold?” If the person says “yes,” then his long distance is switched to Hold, Inc. If a customer denies choosing Hold as her carrier, the Hold customer service representative plays back the recorded conversation to prove the customer did say “yes” when asked “May I put you on Hold?”
Slamming rights
If you have been slammed, you should not pay the charges for the first 30 days. The new FCC rules effectively give you a free month of long-distance service. According to FCC ruling 00-135, released in May 2000, you do not have to pay anyone for the first 30 days of calling. After 30 days, you must pay for the calls, but you are only responsible to pay your original carrier according to its rates. This is true even if the slamming company is still the carrier for the calls. If you have already paid the bill, the slamming company must pay your authorized carrier 150% of the charges. Your carrier is then supposed to issue a credit to your account.
New lines added by the customer
Because of the recent explosion in the use of computer modems and fax machines, customers regularly add additional phone lines to connect to these devices. When you order a new phone line from your LEC, the company always asks which long-distance carrier you want assigned to the new line. If you fail to notify your long-distance carrier you will have loose traffic. The line will not bill on your master long-distance account; instead, the calls on this line will bill on your local bill at high nondiscounted rates.
In the sample local bill in Figure 4.2, Acme Manufacturing needed two new phone lines to facilitate its new computerized part ordering system. When ordering the phone lines from Telephone Company A, Acme specified that both lines should have Telephone Company B as the long-distance carrier. Because it never informed Telephone Company B of the new lines, the long-distance calls on these lines are billed on the last few pages of the Telephone Company A local bill.
PIC code errors
Another reason loose traffic may appear has to do with phone company errors. The local carrier controls which long-distance company is a customer’s PIC. Each long-distance carrier has its own PIC code, which is entered into the local carrier’s central office and into its billing computers.
If an overworked phone company billing representative accidentally enters the wrong PIC code for your lines, your long-distance calls will be handled by the wrong carrier. These calls will be billed on your local bill. Many carriers have multiple PIC codes, and you must ensure that the correct one is in place. Certain AT&T customers use 732 as their PIC code, but if the more common AT&T PIC code of 228 is used, the calls still might bill on the local bill.
Mismatch at the central office
Even if the PIC code is correct in your local telephone company’s billing system, it may be incorrect at its central office. Since the billing computers and central office computers are usually separate systems, mismatches frequently occur. In this case, loose traffic might appear on your bill. This problem is especially prevalent when you switch long-distance carriers. Local carriers are notorious for changing the PIC in the billing system but failing to do so at the central office. Of course, the end result is that the customer pays the old rates for another month or two until somebody figures out why the change never occurred.
PIC freeze
Once a customer is satisfied that his lines have the correct PIC code, it is a good idea to request a PIC freeze with your local carrier. This “freezes” the PIC choice and prevents anyone from changing your long-distance carrier again unless the company has written permission from you.
Slamming
Slamming is the fraudulent practice of changing someone else’s long-distance carrier without that person’s permission. This is a common practice in the industry, especially among entrepreneurial start-up long-distance companies and multilevel marketing long-distance companies. If your long distance suddenly starts to appear on your local bill and you do not recognize the carrier, you have been slammed.
Slamming methods
The latest slamming techniques are becoming increasingly creative. Fraudulent carriers create sweepstakes with a free car or a cruise as the grand prize. To enroll in the sweepstakes, you fill out a small card from a countertop display found in convenience stores and restaurants. If you read the fine print on the card, you will find that you have just agreed to switch your long-distance carrier. (Do not count on taking that free cruise anytime soon.)
One of the most creative techniques has to do with the name of the long-distance carrier, as in the case of long-distance companies called “I Don’t Care” and “I Don’t Know.” When a new customer orders lines from a local carrier, the local carrier’s representative asks, “Who do you want as your long distance provider?” If the customer replies, “I don’t care,” then he gets his long-distance from the I Don’t Care Long-Distance Company.
Another company that is successful in securing new customers fraudulently is Hold, Inc. That company’s telemarketer calls you for an innocent-sounding survey, then suddenly asks “May I put you on hold?” If the person says “yes,” then his long distance is switched to Hold, Inc. If a customer denies choosing Hold as her carrier, the Hold customer service representative plays back the recorded conversation to prove the customer did say “yes” when asked “May I put you on Hold?”
Slamming rights
If you have been slammed, you should not pay the charges for the first 30 days. The new FCC rules effectively give you a free month of long-distance service. According to FCC ruling 00-135, released in May 2000, you do not have to pay anyone for the first 30 days of calling. After 30 days, you must pay for the calls, but you are only responsible to pay your original carrier according to its rates. This is true even if the slamming company is still the carrier for the calls. If you have already paid the bill, the slamming company must pay your authorized carrier 150% of the charges. Your carrier is then supposed to issue a credit to your account.
Saturday, February 2, 2008
Long-distance calls on local bills
During the past few years, local phone bills have become like credit card accounts. A host of services can be billed on the last pages of your local phone bill, including charges for long distance, 900 calls, collect calls, Internet charges, and miscellaneous fees. Sometimes these charges are legitimate—but often they are fraudulent; and they are always expensive. Regardless of why the charges were billed, a business can always reduce this expense, or eliminate it altogether.
Local telephone companies allow other carriers to tack their charges onto your local bill because they keep a percentage of the charges. Other companies do not mind paying this commission because local carriers collect the money for them. It is a win-win situation for both companies, but not for the customer. The average customer does not question any charges on the local bill. She sees it as an “assumed cost” and pays the bill each month. Even if a customer suspects that the bill is incorrect, he will still pay it, rather than risk having his local service disconnected. In truth, however, local carriers will not disconnect a customer’s service for withholding payment for another company’s charges.
Loose traffic
Loose traffic is a term widely used by AT&T referring to long-distance traffic billing on a local bill, instead of on the master long-distance account. Loose traffic usually bills on the back pages of the local bill or on a separate long-distance bill. Other terms for loose traffic are casual calling, random billing, thrifty billing, or LEC-billed traffic.
Besides the confusing and annoying arrangement of receiving two bills for long distance, the real problem with loose traffic is that it is very expensive. I have seen domestic long-distance rates as high as $7 per minute, but a typical rate is about $0.30 per minute.
Long-distance rates are based on this formula:
gross rate - discount = net rate
Loose traffic rates are high because the calls get no discount. Customers end up being charged the gross rate, also known as the tariff rate. Table 8.1 compares the high cost of loose traffic to the cost of long distance correctly billed on a long-distance bill. The figures are based on the sample phone bill in Chapter 4. Telecom consultants commonly use this format; notice the additional savings attributed to having calls billed in 6-second increments instead of full-minute increments.
Local telephone companies allow other carriers to tack their charges onto your local bill because they keep a percentage of the charges. Other companies do not mind paying this commission because local carriers collect the money for them. It is a win-win situation for both companies, but not for the customer. The average customer does not question any charges on the local bill. She sees it as an “assumed cost” and pays the bill each month. Even if a customer suspects that the bill is incorrect, he will still pay it, rather than risk having his local service disconnected. In truth, however, local carriers will not disconnect a customer’s service for withholding payment for another company’s charges.
Loose traffic
Loose traffic is a term widely used by AT&T referring to long-distance traffic billing on a local bill, instead of on the master long-distance account. Loose traffic usually bills on the back pages of the local bill or on a separate long-distance bill. Other terms for loose traffic are casual calling, random billing, thrifty billing, or LEC-billed traffic.
Besides the confusing and annoying arrangement of receiving two bills for long distance, the real problem with loose traffic is that it is very expensive. I have seen domestic long-distance rates as high as $7 per minute, but a typical rate is about $0.30 per minute.
Long-distance rates are based on this formula:
gross rate - discount = net rate
Loose traffic rates are high because the calls get no discount. Customers end up being charged the gross rate, also known as the tariff rate. Table 8.1 compares the high cost of loose traffic to the cost of long distance correctly billed on a long-distance bill. The figures are based on the sample phone bill in Chapter 4. Telecom consultants commonly use this format; notice the additional savings attributed to having calls billed in 6-second increments instead of full-minute increments.
Friday, February 1, 2008
Program your PBX
Another technique for moving intralata traffic to your long-distance carrier is to program your PBX to function like an autodialer. The PBX can insert your carrier’s CIC and move all intralata calling away from the local carrier. If you have a key system, or single-line phone set, you should be able to program one of the speed dial buttons to dial the CIC for you.
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