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April 24, 2009

Max Your Factor

Filing proper jurisdictional factors is important for any carrier. The main ones that are currently used include PIU (Percent Interstate Usage), PML (Percent Mobile to Land), and PLU (Percent Local Usage). There are others that, while not always applicable, are nonetheless important. One of those factors is the PCL or Percent Common Line.

The PCL factor denotes what percent of a carrier’s 800 traffic terminates on common business lines. Typically originating 800 traffic is rated at the terminating rate. When a PCL is filed, the percentage of MOUs that the carrier files are rated at the originating rate on a going-forward basis.

If the rates between originating and terminating are the same then there is no impact. However, if the rate between originating and terminating is different then this could have impact.

Example: In the state of Florida for Bell South the current originating CCL rate is 0, but the terminating rate is .006. As a result, overall terminating access charges are higher than originating.

If a carrier filed a PCL of 75% then the majority of their intrastate FL access cost would suddenly decrease by .006.

A carrier could be missing an opportunity to legitimately reduce costs if it failed to file this factor or failed to ensure that the vendor was applying it correctly.

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April 21, 2009

What is International Revenue Share Fraud?

International Revenue Share Fraud is a form of traffic inflation, or traffic pumping, and will manifest itself on your international invoices. In this scenario an international revenue share provider obtains a number, or range of numbers, designated as premium rate service (PRS) numbers. Premium rate numbers allow callers to access some form of value added information or entertainment service. They are like 900 numbers in the U.S. Calls to premium rate numbers are priced higher than normal traffic terminating to the same country. Calls to premium rate numbers generate profit both for the revenue share provider and the content provider. The revenue share from premium rate numbers will vary by country and can range between 30% and 80% of the net tariff. Fraudsters are able to take advantage of these arrangements by obtaining international PRS numbers themselves, or entering into arrangements with the PRS content providers, and then driving traffic to them through various methods. The fraudsters are then compensated by the international revenue share providers on a monthly or bi-monthly basis. The international revenue share providers make their money by collecting high international settlement changes from the foreign carriers sending them the traffic. You will see this fraud as unexpected spikes in high-cost traffic to foreign countries.

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Why a Fraud Management System Can Not Detect Traffic Pumping

Unfortunately most domestic traffic pumping schemes can not be detected using a fraud management system. This is because fraud management systems look for fraudulent traffic patterns in the outbound calls. Moreover, because of the volume of traffic recorded on the carriers' network, fraud management systems will typically only monitor international traffic. And, because of size limitations, the FMS will only keep a few days worth of data within the system.

To catch traffic pumping both inbound and outbound CDRs need to be loaded into a single database. Those records then need to be enriched to included additional information such as end office, jurisdiction, OCN, and cost (including fixed and semi-variable costs). Armed with this information, you can begin analyzing your traffic patterns and detecting anomalies that are indicative of traffic pumping. Some of those patterns include calls to known "hot spots" and long duration calls.

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April 20, 2009

How to Combat Traffic Pumping

At present carriers are pursing a number of steps to combat traffic pumping. These include:

• Non-payment and Filing Disputes
• Court Filings
• Lobbying for new FCC Rules & Regulations
• Rate Increases

Typically, traffic pumping is discovered 30-60 days after the fact, when a spike in billable charges appears on the carrier's invoice. Once they start traffic pumpers can continue to operate until they are discovered and stopped. Instead of waiting, carriers could take a more proactive approach to managing traffic pumping. Technology is available today that allows carriers to determine the costs associated with each end office and are using this information to identify high cost end offices and spikes in usage to those locations. As a result they are able to catch traffic pumpers when they begin ramping up.

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April 10, 2009

Performance Management

The effective management of invoice receipt, audit and payment is aided by having trending and control reports in place. These reports allow management and analysts to track invoices from receipt to payment while checking on certain BAN and invoice details.

The key reports that track invoices are the Missing Accounts report which helps ensure that all invoices are received and loaded into BillTrak Pro (TEOCO’s bill receipt and payment system) and the Invoice and Transaction Workflow Aging reports that give a snapshot of all invoices in workflow and the length of time in a particular workflow state such as review, account coding or accounts payable allowing for a systematic and accountable processing of invoices to payment.

Other key reports that track invoice details and trend account details are Usage, MRC or OCC Trend reports for a period of 3 months or more help catch variances in charges. These reports allow analysts and auditors to hone in to potentially inaccurate billings, research and audit the charges and dispute if necessary.
Additionally, the Dispute Aging report gives a snapshot of existing disputes over periods of time allowing for the timely management and closure of disputes and the Credit Balances report gives a snapshot of credits on BANs allowing for the management of outstanding credit.

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April 05, 2009

What is Traffic Pumping?

Creating an artificial spike in calls to a specific location is known as "traffic pumping" or "traffic inflation." Traffic pumpers are companies who seek to inflate traffic to certain locations in order to abuse the inter-carrier compensation system. These illegal schemes abuse the system intended to keep the price of basic telephone service affordable for rural customers. (Source: http://broadband.wordpress.com/2007/05/09/sprint-nextel-fights-traffic-pumping-schemes/ )

Traffic pumpers make their money by first obtaining a number, or number range, associated with a rural local exchange. Next, they will begin driving as much traffic as they can to these numbers. Often times, these numbers are associated with free conference calling services or adult chat lines. As the calls come in, the rural exchange will then charge excessive access charges to the other carriers that terminate the calls to them.

As a communications service provider you may be at risk to traffic pumping. You may be at risk by being connected to an end office that also services one of these companies. Or, you may be at risk by allowing traffic from other carriers to transit your network and terminate to one of these high cost end offices.

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