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.
Showing posts with label local bill. Show all posts
Showing posts with label local bill. Show all posts
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.
Telecom : Managing your payphones
Many businesses have on-site payphones. The local phone company either owns the phones or they are customer owned. If the local phone company owns the phones, then the business owner normally pays a monthly fee to the local phone company for the payphone. The payphone bill is almost identical to a local bill for a regular business phone line. The charge for the payphone is usually about the same as the charge for one flat business line: about $40 per month.
Eliminating payphone bills
The problem with paying the local phone company to have a payphone at your site is that you are paying the company so it can earn money from your employees. Not only does the carrier earn $40 a month from you, but it gets all of the coin revenue and probably receives a commission on all operator-assisted calls, collect calls, calling card calls, and long-distance calls from the payphone.
- The “$4 rule” has long been a standard with payphones. If the payphone is earning $4 or more per day in coin calls, then the local phone company will discontinue billing you the monthly fee and instead will pay a commission on the calls.
- A typical business has multiple payphones at one facility. If most of the payphones are meeting the $4 minimum, then an overall commission agreement may be negotiated with the local phone company. Commissions on payphone calls vary from 5% to 25% of both the coin and long distance revenue. The commission checks are usually paid monthly or quarterly.
- If the local phone company is unwilling to waive the monthly fee for the payphone due to the low amount of calling, you may consider canceling the service altogether. If you have multiple payphones in one location that are not producing significant call volumes, consider reducing the number of phones until the $4 minimum is met.
Eliminating payphone bills
The problem with paying the local phone company to have a payphone at your site is that you are paying the company so it can earn money from your employees. Not only does the carrier earn $40 a month from you, but it gets all of the coin revenue and probably receives a commission on all operator-assisted calls, collect calls, calling card calls, and long-distance calls from the payphone.
- The “$4 rule” has long been a standard with payphones. If the payphone is earning $4 or more per day in coin calls, then the local phone company will discontinue billing you the monthly fee and instead will pay a commission on the calls.
- A typical business has multiple payphones at one facility. If most of the payphones are meeting the $4 minimum, then an overall commission agreement may be negotiated with the local phone company. Commissions on payphone calls vary from 5% to 25% of both the coin and long distance revenue. The commission checks are usually paid monthly or quarterly.
- If the local phone company is unwilling to waive the monthly fee for the payphone due to the low amount of calling, you may consider canceling the service altogether. If you have multiple payphones in one location that are not producing significant call volumes, consider reducing the number of phones until the $4 minimum is met.
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.
How line charges and local calls are billed
Regardless of whether or not a business has lines, trunks, or Centrex, there are three ways to pay for local phone lines. With flat-rate service, the line is billed but local calls are free. Measured service consists of a line charge, and local calls are billed by the minute. Message-rate service has a line charge, and local calling is billed on a per-call basis. Each call is considered a “message.”
Three Different Classes of Service for Local Lines
Reducing line charges by changing class of service
Local telephone companies usually only offer one or two of these classes of service in each market. The best practice is to compare your current service to whatever alternative service the carrier offers. If you change your class of service, it is usually only a billing/pricing change—not a change regarding how the service actually works.
Line charges are usually higher with flat-rate service. A business such as a mail-order company that makes few local calls can benefit by changing from flat-rate service to message-rate. The line charges will be lower, and because the business makes almost no local calls, the local calling charges will be minimal. Table 6.2 shows an example of this type of change. The math, of course, works two ways; a business that makes a great deal of local calls will profit by switching from measured-rate service to flat-rate service.
Saving money by changing to a CLEC
CLECs are aggressively winning business away from incumbent local carriers. CLECs usually enter a local market as a reseller of the incumbent LEC’s services. Once they have established a customer base, they will begin to install their own lines and central office switches. Teligent, one of the first CLECs, offered local service via line-of-sight wireless connections. (Building a network from the ground up is costly, and cash-poor Teligent went bankrupt in May 2001.)
As part of the Telecom Act of 1996, incumbent LECs are required to allow CLECs to interconnect to their network. They are also required to allow the CLECs to “colocate” their switching equipment in the same central office.
CLECs usually offer prices 5% to 30% lower than the incumbent LECs. The end user has to decide whether to sign up with the CLEC under a reseller arrangement or under a facilities-based arrangement. The savings are better using the CLEC’s actual facilities, but many of the problems previously mentioned regarding a Centrex conversion apply with a change to a CLEC’s physical lines. It may not be worth the “pain of change” for the customer, so the reseller option may be best.
Eliminating erroneously billed lines
Many businesses make a “donation” to their local telephone company each month by paying for lines that are not used. Once a year, a business should audit its phone records for these lines. A low-tech method of verifying what lines you have is to request a list of all your telephone numbers from the local phone company, and call the numbers yourself. You may be surprised to see who answers.
In some cases, a business may be paying for someone else’s lines because the telephone company made an error in its records. A simple data entry error may cause you to pay for your neighbor’s phone lines. Or you might be paying the phone bills of an ex-employee’s home office phone bills each month. Unless you are feeling benevolent, you should correct the problem. Notify your local carrier and request a refund of all the past-due charges plus interest. The carrier will reroute the phone bills, but the actual customer probably will not be back-billed.
Reducing the number of trunks
As noted above, a business with a PBX uses trunk lines provided by the local telephone company. The trunks connect the customer’s PBX to the telephone company’s central office. Within the customer’s premise, inside wiring connects each individual phone to the PBX. This configuration is often called “trunks and stations.”
A business only needs a number of trunks equal to the maximum number of callers who will be making outside calls at the same time. To determine whether or not you are “overtrunked,” you can order a trunk study from your local carrier. A trunk study measures the number of outgoing calls over a specified period of time. The term traffic study is used to describe a usage study performed on POTS or Centrex lines.
To order a trunk or traffic study, call your local telephone company representative and specify when you want the company to analyze your traffic volume. Your carrier will probably give you a 5-day statistical sampling of your traffic volume. The trunk study report sent to you details the number of calls, the duration of the calls, the “busy hour” each day, and the amount of any “overflow.”
In the sample trunk study below, the customer experiences “call blockage” on Thursday and is, therefore, “undertrunked.” This study reveals the need to add, not drop, trunks. This is especially important for a business that cannot afford to miss any calls, such as a hospital. A radio station that experiences high levels of overflow should not be concerned, because the overflow is most likely callers flooding the lines in response to an on-air contest.
Trunk study report
Reducing line charges by changing class of service
Local telephone companies usually only offer one or two of these classes of service in each market. The best practice is to compare your current service to whatever alternative service the carrier offers. If you change your class of service, it is usually only a billing/pricing change—not a change regarding how the service actually works.
Line charges are usually higher with flat-rate service. A business such as a mail-order company that makes few local calls can benefit by changing from flat-rate service to message-rate. The line charges will be lower, and because the business makes almost no local calls, the local calling charges will be minimal. Table 6.2 shows an example of this type of change. The math, of course, works two ways; a business that makes a great deal of local calls will profit by switching from measured-rate service to flat-rate service.
Saving money by changing to a CLEC
CLECs are aggressively winning business away from incumbent local carriers. CLECs usually enter a local market as a reseller of the incumbent LEC’s services. Once they have established a customer base, they will begin to install their own lines and central office switches. Teligent, one of the first CLECs, offered local service via line-of-sight wireless connections. (Building a network from the ground up is costly, and cash-poor Teligent went bankrupt in May 2001.)
As part of the Telecom Act of 1996, incumbent LECs are required to allow CLECs to interconnect to their network. They are also required to allow the CLECs to “colocate” their switching equipment in the same central office.
CLECs usually offer prices 5% to 30% lower than the incumbent LECs. The end user has to decide whether to sign up with the CLEC under a reseller arrangement or under a facilities-based arrangement. The savings are better using the CLEC’s actual facilities, but many of the problems previously mentioned regarding a Centrex conversion apply with a change to a CLEC’s physical lines. It may not be worth the “pain of change” for the customer, so the reseller option may be best.
Eliminating erroneously billed lines
Many businesses make a “donation” to their local telephone company each month by paying for lines that are not used. Once a year, a business should audit its phone records for these lines. A low-tech method of verifying what lines you have is to request a list of all your telephone numbers from the local phone company, and call the numbers yourself. You may be surprised to see who answers.
In some cases, a business may be paying for someone else’s lines because the telephone company made an error in its records. A simple data entry error may cause you to pay for your neighbor’s phone lines. Or you might be paying the phone bills of an ex-employee’s home office phone bills each month. Unless you are feeling benevolent, you should correct the problem. Notify your local carrier and request a refund of all the past-due charges plus interest. The carrier will reroute the phone bills, but the actual customer probably will not be back-billed.
Reducing the number of trunks
As noted above, a business with a PBX uses trunk lines provided by the local telephone company. The trunks connect the customer’s PBX to the telephone company’s central office. Within the customer’s premise, inside wiring connects each individual phone to the PBX. This configuration is often called “trunks and stations.”
A business only needs a number of trunks equal to the maximum number of callers who will be making outside calls at the same time. To determine whether or not you are “overtrunked,” you can order a trunk study from your local carrier. A trunk study measures the number of outgoing calls over a specified period of time. The term traffic study is used to describe a usage study performed on POTS or Centrex lines.
To order a trunk or traffic study, call your local telephone company representative and specify when you want the company to analyze your traffic volume. Your carrier will probably give you a 5-day statistical sampling of your traffic volume. The trunk study report sent to you details the number of calls, the duration of the calls, the “busy hour” each day, and the amount of any “overflow.”
In the sample trunk study below, the customer experiences “call blockage” on Thursday and is, therefore, “undertrunked.” This study reveals the need to add, not drop, trunks. This is especially important for a business that cannot afford to miss any calls, such as a hospital. A radio station that experiences high levels of overflow should not be concerned, because the overflow is most likely callers flooding the lines in response to an on-air contest.
Sample local telephone bill
These are typical local bill for a fictional business in Florida. Like other local bills, this one follows an outline: summary page, monthly service, local calling, intralata calling, and charges from other carriers.
Summary page
The bill’s first page usually has two sections: the summary of charges and the bill remittance page. The summary of charges outlines the current charges, any past-due charges, charges from companies other than the local carrier, and the total amount due. The perforated bill remittance page is to be included with the check when the customer sends in the payment.
When looking at this page of the bill, a seasoned bill auditor notices that the customer has measured local service. It is billed $12.54 for local calls. It may be cheaper to switch to a flat-rate service. The customer also has intralata calls. (On Telephone Company A’s bills, intralata calling is listed as “Itemized Calls.”) Any usage, whether it is local, intralata, or long distance, that appears on a local bill can almost always be reduced. In this case, the customer also has $31.04 listed under “Charges for Other Companies.” These charges can almost always be reduced or removed altogether.
Monthly service
Page 2 of the bill shows all of the monthly recurring charges billed by the local carrier. The first item is usually the charge for the lines, which is a fixed expense. Other charges appearing in this section are any optional services, such as call forwarding, wire maintenance, hunting/rollover, and directory advertising in the yellow or white pages. In the sample bill, the customer has two lines that cost $43.87 each. This is a high rate for measured service, so a bill auditor would research why the line rate is so high. A bill auditor would also check with the end user to make sure the three-way calling and call forwarding features are actively used. If not, they should be canceled.
Local calling
As previously stated, local lines can be billed one of three ways: flat-rate service, measured-rate service, or message-rate service. With flat-rate service, local calls are not charged, so this section of the bill may be missing. In some cases, the local carrier will still provide a summary of local calls even though it is not charging for the calls. With measured-rate or message-rate service, this section of the bill itemizes the local calling usage and the charges associated with that usage. If the customer switches to flat-rate local service, the $12.54 charge for local calls, listed on page 2 of the bill, will be eliminated.
Intralata calling
In this bill, intralata calls are listed under the heading “Itemized Calls” on page 3 of the bill. The customer is paying $0.24 per minute. The business saver service discount plan gives the customer a 15% discount. This lowers the effective rate to $0.20 per minute, which is still far too high for today’s marketplace. The customer should consider switching these calls to its long-distance carrier. Most long-distance carriers will carry intralata traffic for less than $0.10 per minute. Telephone Company A can implement this change in its central office. Before switching, the customer should first try to negotiate a lower rate with Telephone Company A.
The next heading on page 3, “Optional Calling Services,” simply shows the business saver service discount plan. The customer receives a 15% discount on intralata calling. If the customer had 800 service or calling cards through Telephone Company A and was using these services within the LATA, the 15% discount would also apply to these calls. However, most customers use their long-distance carrier for calling cards and 800 service.
Charges for other companies
After the local carrier has itemized its charges for monthly service, local calling, and LATA calling, the remainder of the bill is comprised of charges from other companies. The most common charges in this section, also listed on page 3 of the bill, are for legitimate services such as Internet access, interlata calling card charges, direct dial long distance, and collect calls. Fraudulent charges billed by other carriers such as United States Billing, Inc. (USBI) and Hold, Inc. usually appear in this section of the bill. Slamming, cramming, and 900 calls, if billed, will appear in this last section of the local bill.
In the sample bill, one of the two lines is showing long-distance calls carried by Telephone Company B at $0.25 per minute. The true cost-per-minute is actually higher, because the calls are billed in full-minute increments. Full-minute billing is about 8% more costly than billing the same calls in 6-second increments (see Table 7.1 for a further explanation).
This customer might have been slammed by Telephone Company B, but it is more likely that a customer error caused this problem. Assuming the customer has a separate Telephone Company B long-distance account, this line should have been billed on that account, not on the local bill. But if the customer failed to inform its Telephone Company B account team about this line when it was first ordered, the line will bill alone on the local bill. This situation is called “loose traffic” because the calls (traffic) on this line are billing apart (loose) from the main Telephone Company B account. To correct this problem, the customer should inform Telephone Company B and request a refund. Telephone Company B will request bill copies and then “rerate” the bill—it will recalculate the bill at the correct lower rates and refund the difference.
Now that we have examined the outline of the local bill in detail, the different local line charges that appear on the local bill. Customers have many choices when it comes to their local service.
Only through systematic review and diligent auditing of your local bills can you avoid being overcharged. If a customer blindly accepts the carrier’s service offerings and billing, without question, the company will be subject to overcharges and inefficiencies every month. The culture of the telecommunications industry is built on carriers providing customers whatever the customer is willing to accept. The fewer questions customers ask, the greater the revenues for the carriers.
The local bill
Items on a local bill fall into one of four categories: regulated charges, nonregulated charges, taxes and fees, and charges from other carriers.
Regulated charges
Tariffs are filed with the state Public Utility Commission (PUC). Tariffs define the rules and pricing of telecom services. The prices for regulated charges are nonnegotiable, although the carriers often file additional tariffs to be used to offer special pricing to large customers. Line charges and calling rates are regulated charges.
Nonregulated charges
Carriers are not required to file tariffs for these services. Prices on nontariffed items are set based on current business and competitive conditions for the area. These charges are often “nonessential” services such as calling features and voice mail.
Taxes and fees
There are typically four types of taxes and fees that appear on local phone bills:
Service fees and charges, such as the 911 surcharge and PUC funding fees;
Franchise tax—usually a local item like a municipal charge;
Sales, use, or special taxes—usually written as “state and local taxes” on the bill;
Federal excise tax—this 3% tax was originally a World War II emergency tax.
Charges from other carriers
Charges from companies other than your own local carrier sometimes appear at the back of your local telephone bill. Because local carriers keep a small portion of the money, they are always happy to provide this service to other companies. Some of the charges that may appear are collect calls, 900 calls, voice mail, long distance, and Internet access.
Regulated charges
Tariffs are filed with the state Public Utility Commission (PUC). Tariffs define the rules and pricing of telecom services. The prices for regulated charges are nonnegotiable, although the carriers often file additional tariffs to be used to offer special pricing to large customers. Line charges and calling rates are regulated charges.
Nonregulated charges
Carriers are not required to file tariffs for these services. Prices on nontariffed items are set based on current business and competitive conditions for the area. These charges are often “nonessential” services such as calling features and voice mail.
Taxes and fees
There are typically four types of taxes and fees that appear on local phone bills:
Service fees and charges, such as the 911 surcharge and PUC funding fees;
Franchise tax—usually a local item like a municipal charge;
Sales, use, or special taxes—usually written as “state and local taxes” on the bill;
Federal excise tax—this 3% tax was originally a World War II emergency tax.
Charges from other carriers
Charges from companies other than your own local carrier sometimes appear at the back of your local telephone bill. Because local carriers keep a small portion of the money, they are always happy to provide this service to other companies. Some of the charges that may appear are collect calls, 900 calls, voice mail, long distance, and Internet access.
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