Optional services

Most optional services are nonregulated, so the charges vary from market to market. One thing these services have in common is that they are “services of convenience.” For example, the average business can usually live without call forwarding or voice mail, but these services certainly make doing business more convenient. Some of the most common optional services are:

- Remote call forwarding;

- Wire maintenance;

- Voice mail;

- Pay-per-use features.

Remote call forwarding
Remote call forwarding (RCF) allows a subscriber to have a local number in one area from which all calls are forwarded to another area, such as the home office. For example, Pete’s Plumbing has an office in Orlando, but Pete and his plumbers work across Florida. When someone in Miami needs a plumber, they look in the Miami phone book and call a local plumber. Pete is not in Miami, but RCF gives the impression that he is in Miami. Pete pays $15 per month for RCF so he can have a Miami number. When the customer in Miami calls Pete’s Plumbing, the call is forwarded back to Orlando. Unless Pete tells him otherwise, the customer in Miami thinks the company is a local business. Pete incurs long-distance charges on these calls, but the additional customers make it worthwhile.

Saving money on RCF
RCF is a tariffed item, so the rates are set. About the only way to save money on this item is to cancel the service altogether and replace it with 800 numbers. Compare all of the costs, including 800 number fees, long-distance rates, and call volume, before switching. The main advantage of remote call forwarding is the perception it creates that the company is a “local business.”

Wire maintenance
The urban legend states that the CEO of one of the Regional Bell Operating Companies challenged his managers to “find a way to generate an additional $2 million in annual revenue, without increasing the level of service we provide our customers.” The end result was the wire maintenance plan that was quickly adopted by local carriers nationwide. Some of the names of this plan used by the different carriers are: Linebacker, Lineskeeper, Inside Wiring Plan, Trouble Isolation Plan, and Wire Keeper.

The local telephone company is not responsible for maintaining the physical wires inside a customer’s premise beyond the demarcation point. The wire maintenance plans work like an insurance policy. A customer usually pays approximately $3 per line per month for the wire maintenance plan. In the event the inside wiring fails, the phone company technician will repair the inside wiring. The main problem with this plan is that inside wiring almost never fails.

Another problem with wire maintenance plans is they often do not cover the entire cost of the technician’s repair job. A typical wiring repair job carries these charges:

Initial trip to the customer’s premise;

- Cost to diagnose the problem;

- Cost to repair the problem;

- Cost of materials.

In the case of Ameritech’s $3.50 Wire Maintenance Plan, only the diagnostic charge is covered. To have the line repair covered, the Linebacker plan must be added for an additional $3.50 per month. To be “fully insured,” a customer pays $7 per month to be protected from a $50 to $100 repair that only occurs once every 5 to 20 years.

The biggest sting of wire maintenance plans is that the average customer is unaware that it even has the plan to begin with. A manufacturer in the Chicago area was donating more than $100 each month to Ameritech, because it had the wire maintenance plan on more than 50 lines. In many cases, the wire maintenance plans were added to customer bills without their permission. Class-action lawsuits against the RBOCs have recently been resolved. The RBOCs had to give back millions of dollars to their customers who had wire maintenance service.

Most businesses have their phone bills managed by the accounts payable department, but the phone service itself is managed by the computer department or telecom department. In the event the lines need repair, the telecom department will probably call its phone equipment vendor to do the work, and not the local carrier.

Cancel wire maintenance plans
Because of the reasons listed, almost every business should cancel its wire maintenance plans. When canceling the plan with your local carrier, request a full refund of back charges unless your organization actually did order the service. Sometimes, the local carrier will issue a 3-month “courtesy credit” anyway.

Voice Mail
On numerous local bills, there is a $5 to $10 charge for voice mail. A decade ago, this may have been a cost-effective way to have voice messaging. Many Centrex services include voice mail as part of the package of additional services.

Saving money on voice mail
If you see voice mail being charged on your local bill, first find out if it is even being used. Your staff should be able to tell you who is using the service. If not, check with the phone company to see who set it up. In many cases, these “mystery services” were set up accidentally by an overzealous phone company representative or by an ex-employee. In either case, canceling the service can reduce your bill.

If you have a large number of voice mailboxes, you may be able to negotiate a lower price with the telephone company, or you may want to look into switching to a company that specializes in offering voice mail separately. Another cost saving idea is to buy your own voice mail equipment. If you have a PBX, it may be as simple as buying a voice mail card and installing it in your PBX.

Pay-per-use features

Pay-per-use features have been described as a lazy man’s way of using the phone. Every time the caller uses the service, a charge is generated, thus the term pay-per-use. The most common charges are directory assistance call completion, call return (*69), repeat dialing, and three-way calling. The charge is typically $0.75 per use.

Saving money on pay-per-use features
Employees typically do not worry about the small cost associated with these charges, but they can potentially be a significant expense for a business. I have seen businesses pay thousands of dollars per year for the convenience of using these unnecessary services. The simplest way to cut your cost here is to call the local carrier and have it block these features in its central office. If you decide these services are necessary, consider purchasing one of the bulk packages offered by the local carriers.

Directory services
Phone books contain two types of listings: white pages and yellow pages. Each separately billed local account is entitled to one white page listing. Enhanced white page listings that include bold text or additional lines cost extra. Having your numbers unlisted will exclude them from the directory but they will still be available through directory assistance operators. A nonpublished number is not printed and is not available to operators.

Yellow pages listings are usually sold once a year, although the billing shows up at the back of the local phone bill each month. In some cases, the billing is a one-time expense. Pricing is based on the size and placement of the advertisement, if any, and the number of listings.

Saving money on directory services
Directory services are nonregulated, so the rates have a greater propensity for error. One of the most common errors is that a business may have some of its numbers incorrectly designated as “nonpublished” and pay $3.50 per month for this. I have seen payphones in a warehouse treated as “nonpublished.” This is ridiculous because the local carrier typically does not publish payphone numbers in its directory anyway.

The most significant errors to occur with directory services are with the yellow pages. When an order is placed for the advertisement, the phone book is printed as far out as 1 year later. Sometimes the advertisement in the book does not match what is ordered. In this case, the business is entitled to some form of refund. Often, the yellow pages company (usually a sister company of the LEC) offers reduced rates on the advertisement in next year’s phone book. If it misprints the number, you can have the company pay to secure the erroneous number and call forward it to your correct number. If the erroneous number is not available, you may be out of luck.

One of the most recent scams in the yellow pages industry has to do with fraudulent billing by other companies. Companies have sprung up that print their own phone books to compete with the standard phone book provided by the local carrier. Usually, the books are legitimate (although not as thorough as the “real” phone books), but their tactics are unscrupulous at times.

When securing a new order for a directory advertisement, sometimes these companies simply mail an invoice to a business in hopes that the company pays it. These invoices look genuine because they include the yellow pages logo, which is not a trademarked logo. The accounts payable clerk who processes the bills understands that yellow page billing is a legitimate charge, so the invoice gets paid. The “dummy invoice” is a fraudulent technique becoming increasingly common, and not just with yellow pages, or telecommunications, for that matter...

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