Managing Telecom Costs

Why read a blog about managing telecom costs?

Why read a blog about managing telecom costs? On average carriers are overbilled 10 to 20 percent on their telecom invoices. That’s 10 to 20 percent of one of the largest expense items on a carrier’s income statement. Using the tips and tricks that can be found in a blog like this can help you make a serious impact to your company’s bottom line. In today’s economy that can mean saving jobs and who knows the job saved might be your own.

Tracking of Term Plans and Discounts

With all the different offerings the vendors now provide for term plans and discounts it is hard to keep them all straight. A simple worksheet seems to help keep track of them and allows you to be able make the needed changes as new plans are added or removed. By creating an Excel spreadsheet with the headings of, Vendor, State, Circuit Type, Name of Term Plan or Discount, Percentage discounted, qualifications need to be included in term plan or discount, and where to find the term plan or discount will help keep everyone up-to-date with what vendor is offering what plans. This spreadsheet can then be used in many different ways. It can be sent out to other varies groups, like Provisioning and Network Services to make sure they are placing any new circuits that qualify on the proper plan. The auditors that are validating the invoices can make sure that the proper rate or discounts are being given on the bill. It can also be used as an optimization tool to go through and find circuits that meet the qualifications, but were installed prior to the term agreement start date or just were missed when installed. The last items is at the beginning of every year run a report to look up what circuits will be coming of a term plan during the coming year. This will allow the network people time to determine if the circuit should stay and be placed back on term or disconnect and avoid and early term fees.

Understanding the BT Tandem Network in the UK

In the United Kingdom calls are routed through 4 different types of tandem switches that exist on what is known as the DM Network or the Tandem Network. What kind of tandem switch depends on where the call originates and terminates. Unlike the CLLI codes that are prevalent in North America, the tandem switches of the UK are named after their location and an identifier of some significance.

Digital Main Switching Units (DMSUs)
There are currently 76 DMSUs in use. These are the original long distance exchanges and each DMSU has the capacity to handle 30,000 calls at any one time. Every DMSU has a connection to every other DMSU within the network.

DMSUs are named after their location as well as a local theme. Examples of DMSU names include Edinburgh Bruce (named after the infamous king of Scotland Robert Bruce), Nottingham Arrow (an acknowledgment of the Robin Hood legend) and Shrewsbury Darwin (Shrewsbury was the birth place of Charles Darwin).

Wide Area Tandems (WATs)
There are currently 16 WATs in use in the UK. As opposed to the long distance calls routed through the DMSUs, the WATs are used to connect calls within a particular region. While a WAT might be connected to the DM Network (and DMSUs) via a connection or two, they are not connected to all of the DMSUs or even all of the WATs. They route their calls from one Digital Local Exchange (DLE) to another DLE within the same region.

Similar to DMSUs, the WATs are named after a local theme. For instance one of the WATs is named Reading White Knights, after White Knights Park - home to the University of Reading (the park itself was named after 13th century knight John De Erleigh IV who was otherwise known as the “White Knight”) and the WAT in Liverpool is named the Liverpool Cavern after the famous Cavern Club where Brian Epstein first heard the Beatles play.

Digital Junction Switching Units (DJSUs)
There are 13 DSJUs in use. DSJUs are additional switches within the area of London that allow regional London traffic to be routed from one DLE to another. This saves on the capacity of the DMSU and WAT network. Essentially DSJUs are a tandem network within a tandem network that just serves the London area.

Unfortunately, DJSUs are named only after their location within London, so their names are a little less evocative – such as North Paddington A.

Next Generation Switches (NGSs)
There are currently 63 NGSs being used within the DM Network. These are newer digital switches capable of routing both regional and long distance calls and they are being gradually deployed to replace the aging DMSUs and WATs that have reached their capacity and usefulness. Depending on how it is configured an NGS can handle anywhere from 60,000 to 120,000 simultaneous calls.

NGSs are named after minerals, precious metals, stones, etc. Examples of NGS names are Leicester Opal, London Topaz and Edinburgh Ruby.

Advanced Services Units (ASUs)
In addition to the four types of tandem switches listed above, there is another set of switches used to handle additional services like FeatureNet (a BT product that offers a portfolio of VPN services). These switches are known as ASUs and there are currently 26 of them in use.

ASUs are named after mythological creatures or astronomical features. Examples of ASU names are Leeds Atlas, Leicester Pluto and Guildford Venus.

Does your vendor have a special claim form?

There are vendors who require disputes to be submitted on their claim forms. The most common is Verizon and SBC (Southwestern Bell, Pacific Bell and Ameritech). Recently, BellSouth has started to use the SBC claim form. Other vendors who use their own form are Cavalier, ITC Deltacom and Windstream. These forms should be filled out as completely as possible to ensure the vendor understands the claim as well as be able to provide a timely response.

Missing the forest for the trees . . .

I find that it is very easy to put blinders on while you are doing an audit and overlook some dispute opportunities. If I get focused on reviewing one particular item it is easy to get tunnel vision and not look at other things that should jump out at me. I agree that you have to keep your focus otherwise you will never complete your audit, but I find it best to go with your intuition and if you see something else wrong go ahead and research it. In my experience this is how most new dispute types come about, finding something you didn’t know you were looking for.

COUNT YOUR COWS

A cell on wheels, usually referred to as a COW, is a mobile cell site that consists of a cellular antenna tower and electronic radio transceiver equipment on a truck or trailer, designed to be part of cellular network. These sites are used to provide expanded cellular coverage or capacity at major sporting events, conventions or in disaster areas where cellular coverage either was never present or was compromised by the disaster.

Cost management tip: It is a good idea to do a periodical inventory review of leased circuits associated with the COW sites. While some COWs are being used for an extended period of time, others are just a one time deal, a temporary solution. Disconnect leased facilities where COW is no longer needed.

So count your COWs. Maybe some of them already left your pastures.

Advantages to an email repository for disputes

An email repository is a location where email messages can be sent and stored, and access is shared among several employees. There are several advantages to keeping an email repository for filing billing disputes. First, you have an easy tracking method of when disputes were filed with the vendor and any important correspondence. Second, the repository can be set up so more than one individual can view the repository. If someone on the team is out of the office, another team member can easily step in and help with the absent coworker’s disputes until he or she returns. When the individual returns to the office, they know what other team members did on their work. Third, if issues come up in the future regarding disputes, resolutions, etc., then the email repository can support your position.

CLEC Access Reform: Rural Exemption Enables Traffic Pumping

The phenomenon known as traffic pumping has, at its core, a requirement for high switched access rates. Given the benchmarking requirements set forth by the FCC in its CLEC Access Reform rulings (often referred to as the Seventh and Eight Reports and Orders) there is limited opportunity for competitive local exchange carriers to charge rates high enough to rationalize traffic pumping and the associated relationships with free calling service companies. The small minority of carriers that do characterize themselves as rural exempt.

So, what does this mean?

As part of the rulings, a CLEC is required to “mirror” the rates of the dominant incumbent local exchange carrier (ILEC) for interstate switched access. Most often, this is one of the regional bell operating companies (RBOCs). The FCC carved out a set of criteria by which a CLEC could exceed the ILEC rate. Specifically, if the CLEC competed with a non-rural ILEC and served only customers from areas with a population less than 50,000, then it was afforded the ability to charge the highest banded rate from NECA FCC No. 5. The next logical step in the progression here, then, is traffic pumping migrated to CLECs whose service area illustrated they served only rural geographic areas. Thus, these CLECs could theoretically gain the benefit of the higher switched access rates and the high volumes of traffic associated with traffic pumping.

Google Voice Victimized by Traffic Pumpers

Its not just the traditional fixed line operators that are falling victim to traffic pumping. These days traffic pumpers are branching out and taking advantage of new communications technologies, as well as the companies bringing them to market. Just this past weekend The New York Times ran an article explaining that Google's' Voice service had been victimized by traffic pumpers located in and around rural America. (See: Why Google Doesn't like Its Phone Bill - www.nytimes.com/2009/11/01/business/01digi.html)

Under the Common Carrier laws, long-distance companies must provide universal terminations. They can not block calls to other carriers. And, in rural areas long distance carriers are required to compensate local telephone companies for calls originating and terminating to and from those networks. When long-distance carriers connect to those local networks, they may be charged excessively high rates to connect. And, as a result of this loop-hole, local carries in rural areas can take advantage of the inter-carrier compensation system. They do it by partnering with and sharing revenue generated from services that "pump" lots of calls onto their networks. Services that generate lots of in-bound calls include such things as adult pornographic chat lines, free conference calling services, and party lines.

When Google discovered what was happening last August they began blocking outbound Google Voice calls to a small number of these rural numbers. This, in-turn, prompted AT&T's complaint to the FCC that Google Voice should be treated the same as other traditional phone services. The ensuing battle ultimately led to the Google Voice application being rejected from the iPhone App Store. Google's claim was that since they are providing a free, Web-based software application, and are not technically a phone company, they should not be held to the same common carrier laws that other long-distance carriers must adhere to. Regardless of whether Google should be called a long-distance provider, or not, one thing it does have in common with the rest of the industry is that our current carrier compensation system is broken, outdated, and in need of help from the FCC to fix it.

At this point it is unclear when the FCC will take up this matter and issue a formal decision. But, one thing is clear -- as communications technologies continue to converge, we will see more companies like Google fall victim to traffic pumpers. As long as the current loop-holes in our carrier compensation system remain, traffic pumpers will continue exploiting them at the expense of more victims.

Verizon Term Liability

During the course of auditing Verizon West/GTE invoices we found that if a circuit on a term plan has a dispute or other correction that updates via a Service Order it can reset the term clock in Verizon's system causing an over charge in term liabilty.

For example we had a circuit that had been in service for 4 years of 5 year term when it disconnected, the term fee should have been 12 months, however in Jan 09 Verizon corrected a mileage error related to a dispute on this circuit via their Service Order correction in the OCC section. When the circuit disconnected several months later and should have billed 12 months of early term fee, Verizon billed over 4 years of early term fees because their system read the last SO activity date as the dispute correction update from January 09. We disputed the overage and won the claim for $12K. When validating early term fee's with Verizon we always verify our last SO activity and make sure it matches to avoid being overcharge.

First Steps on a Long Road...

Do you remember, when you first entered the Telecom industry, and realized ATM (Asynchronous Transfer Mode) meant something other than an automated teller machine? Or do you remember, when you heard first time CLLI, POTS, etc?
There are so many terms and abbreviations relating to Telecom. I found the solution. Here is a Telecom Terms Glossary and Dictionary http://www.javvin.com/telecomglossary/. It’s free on-line. You can find any abbreviations and terms you are likely to run across most often in Telecom .

For instance, POTS - Plain Old Telephone Service
Plain Old Telephone Service (POTS) is the standard, analog telephone service which remains the basic form of residential and small business telephone service nearly everywhere in the world. Plain Old Telephone Service was originally known as the Post Office Telephone Service in many countries. It has been available almost since the introduction of the telephone system in the late 19th century, mostly unchanged to the normal user, despite the introduction of electronic telephone exchanges into the public switched telephone network since the middle of the 20th century.

And there is a more comprehensive tool - Newton's Telecom Dictionary - The Dictionary of Telecommunications, Networking and The Internet. It has become the industry "Bible".
http://www.harrynewton.com/bigdic.html

SBC: Invoice specific system. How to avoid late fees.

Looking at a credit balance invoice and not sure why there is an LPC? If it happens to be SBC billing, this is very common situation. Since their system is invoice specific, it’s quite possible that there is a credit and a debit just sitting out there, unapplied. For example, if you withhold an amount on one invoice and receive credit on another, SBC doesn’t have a systematic way of applying them against each other. How to fix this? Provide a blanket LOA/authorization for open credits to be applied against open debits within the same BAN. Keep in mind to specify your authorization to include credits/debits in the same account, regardless of the dollar amounts. This blanket LOA/authorization will eliminate the need of individual credit transfer requests within the same account as well as generation of late fees.

Giving Credit Where Credit Is Due

If BellSouth agrees to credit an overbilling error, the customer must submit claims for the entire overbilled timeframe. BellSouth will not automatically issue credits for the overbilling that occurred between the disputed invoices and when they corrected the billing. In order to obtain credit for the lag between the disputed invoices and billing correction, a subsequent claim must be filed requesting this credit.

Early Termination Charges

If you deal with Verizon invoices on a regular basis, it is likely that you have come across early termination charges to meet minimum billing requirements at some point. These charges are billed in the OC&C for circuits that are moved or disconnected before the in-service minimum period has been met. The in-service minimum period is established by circuit type in FCC Tariff 1, Section 5.2.5, but is generally a minimum of one year for rate elements under the National Discount Plan. Early termination charges are calculated to bill the remaining balance of the minimum in-service period.

In some instances, you may come across circuits that are billing early termination charges in the OC&C as well as monthly recurring charges. A common reason for this charge to generate is a circuit move to a new building. From FCC #1, Section 7.4.5 (b), “Moves to a different building will be treated as a discontinuance and start of service and all associated nonrecurring charges will apply. New minimum period and/or Service Discount Plan requirements will be established for the new services.”

However, in the same tariff the definition of a move is given as “a change in the physical location of the customer’s premises which also involves a connection to a different rate demarcation point.” When generating these charges, the move requirements are often not met and overlooked by Verizon, which in turn generates the charge incorrectly.

When you come across these early termination charges it can be valuable to take time to look further into the issue. Verify whether a disconnect order was actually placed, if the circuit is still billing, and if so whether the requirements to be considered a move are met. These charges are substantial and can bill on any number of circuits with the potential to cost a large amount in invalid charges.

NECA Banded Rate Structure for Facility Circuits

The NECA rate banding process is a function of cost where NECA vendors with similar costs are banded into distinct rate bands. There are 10 rate bands (1 through 10) going from the least to most expensive. Each rate band’s rates are equal to the average cost per rate element for the vendors in that band.

NECA vendors have incentives to keep costs low and remain at a lower rate band. The lower cost companies in each rate band charge lower than average rates to their customers thus gaining from the revenue pooling in their particular rate band or revenue pool since NECA members automatically participate in revenue pooling
The NECA Tariff F.C.C. No. 5 Section 17.5.1 has a list of companies that do business under NECA with rate bands for: Multiline Business End User Common Line (MLB EUCL) and Local Transport/Special Access as well as Local Switching and Tandem Switched Transport for Usage.

In order to verify billed Facility Circuit rates for a given vendor an auditor would first have to verify that the vendor is on the list of NECA vendors (Sec 17.5.1) in order to use the NECA tariff; once the vendor is vetted as a NECA vendor the appropriate rate band for Facility Circuit rates would be found under the heading of Local Transport/Special Access.

The Facility Circuit rates are listed under Special or Switched Access sections and broken out by rate elements (Channel Terminations/Entrance Facility, Channel Mileage Termination and Channel Mileage Facility and MUX) for varying circuit capacities such as DS1, DS, OC3 and up to OC 12 – for both one time nonrecurring charges (NRCs), access service charges and monthly recurring charges (MRCs). Additionally, optional rate plan term discount percentages for 36 and 60 months are listed at 10% and 20% respectively.