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CABS CONFUSION PLAGUES CARRIERS
John L. Guerra
The largest source of revenue for carriers—fees collected for terminating
other carriers’ calls on the
network—can be the most frustrating, time consuming and inexact exercise
a carrier can go through.
In a constantly
changing regulatory and economic environment, carriers
can always rely on interconnect partners to juice up their
revenue numbers at
the end of the month. Or can they?
Determining which carrier
owes you is not getting easier. Bankrupt companies are leaving
interconnect partners in a lurch, and poor circuit inventory
and new regulatory realities such as LNP
and UNE-P rule changes are making access billing more complex
than ever.
Several developments in recent months are directly affecting
the CABS industry.
First, large companies such as MCI, which ring up enormous
CABS bills at local carriers nationwide,
are emerging from bankruptcy and aren’t paying their bills. Even though
MCI owed local carriers millions of dollars, most carriers
won’t see a dime of that money
because they’re at the back of the line of creditors
waiting to be paid by the court overseeing MCI’s reorganization.
Second, the FCC’s Triennial Review Order will redefine how some
carriers do business. The new
rules about UNE leasing will change when and where CLECs
lease network elements or where they’ll be forced
to buy switches, making them facilities-based.
And lastly, LNP, which launched somewhat slowly on Nov. 24,
will affect how well carriers can
identify the origin of wireline phone numbers now being used
in wireless networks.
Unpaid Bills
These days, carrier bankruptcies are affecting CABS, according
Jim Jackson, chief operating officer for
CommSoft. CommSoft provides CABS product service for Tier
2 and Tier 3 carriers. Jackson has seen the uncollectibles
affect the smaller
carriers in big ways. “In some of the largest [bankruptcies],
there were hundreds of thousands of dollars lost on a daily
basis,” he
says. When companies like Global Crossing
were in court and receivership, some CLECs asked the court to turn off
their switches so they couldn’t terminate on their networks. The
CLECs were losing money and continuing to
ring up access charges that weren’t going to be paid.
The court ruled that they couldn’t turn off those switches and
that they had to supply service. “They
were still generating bills, but accounts
receivable wasn’t getting
paid. They were mailing the CABS bills out, but they
weren’t getting
paid for them,” Jackson says. When asked about
the unpaid access charges, an MCI spokesperson
said the carrier “settled all pre-petition claims with regard to access
charges.”
MCI spokeswoman Lauren Kallens says the carrier is in the
process of “consolidating and upgrading our billing
systems both to improve the customer experience and to drive
operational efficiencies. Work is already under way in this very important initiative,” she
says.
The lost CABS payments hit the smaller carriers hard. “They had to
reverse any investing they had planned,” Jackson says. “They
had to hold off on network build-outs and any investments
they were thinking about. In some cases, MCI was their primary source
of revenue; we’re talking hundreds of
thousands of dollars.”
EUR Systems also bills for CABS and has seen the effects
of the bankruptcies on the smaller
carriers. “There’s a hierarchy of creditors [in a bankruptcy];
there are secured creditors, and then
there are trade creditors,” says John Caddell, vice president of outsourced
solutions at EUR. “Trade
creditors are those who provide a service to the bankrupt
company, and they’re at the bottom of
the barrel. Access is closest to that. There’s not a lot left when
you get to those guys.” Some LECs
sell off that bad debt to third-party collection firms that
try to collect those debts. It’s less costly for
the LECs, who’d otherwise have to hire lawyers and spend the time
in court.
But MCI is not the only carrier having trouble paying its
CABS bills. Rural carriers also created
problems as they disappeared or were merged with other carriers.
The National Exchange Carrier Association (NECA) administers
the FCC’s access charge plan,
performs rate and tariff development, industry database management,
compliance auditing,
economic forecasting, trend analysis and regulatory policy
analysis. Because a lot of carriers haven’t
been paying their access fees, NECA made several tariff changes
this year that were designed to
mitigate the impact of future bankruptcies.
“In August, we revised NECA Tariff No. 5 to allow LECs to
disconnect carrier services on a shortened
notice, provided certain conditions are met,” says Peter Peretzman,
NECA spokesperson. Under
Tariff No. 5, the long distance carrier pays the local telephone
companies involved in the call, i.e.,
the LEC in the state in which the call originates and the
LEC in the distant state for the use of their
respective networks in setting up and completing the end-to-end
toll call. Long distance carriers use
common line, switched and special access services provided
by the LECs for this purpose.
“In addition, we strengthened our deposit
regulations to make it easier for LECs to demand deposits
from existing customers that were not prompt in paying their
carrier bills.” The NECA rules say that
after two or more late payments in a year, LECs can now demand
deposits equal to two months of
access billing. NECA wanted to further strengthen the tariff
deposit provisions and tie them to a customer’s creditworthiness,
but these revisions were met with resistance from the FCC and long
distance carriers. “However, the new provisions that were approved
will dramatically reduce the
impact of a bankruptcy on the NECA pools if LECs take advantage
of them,” Peretzman says.
"There are some smaller carriers that
appear to be suffering financial difficulties, but these
are not expected to have a significant impact on the NECA
tariff participants,” he says. “A smaller regional
carrier may have a major presence in a few of the LEC areas
participating in NECA Tariff No. 5, but
the impact to a single company are reduced by spreading the
risk among all NECA pooling
members.”
NECA also built a higher uncollectible
dollar figure than reflected in prior years into its 2003-2004,
July 1 tariff filing in anticipation of these types of bankruptcies
and non-payment situations. NECA is
not planning any additional action to increase its rates
due to bankruptcies, though it will monitor
this situation, Peretzman says. “If bankruptcies were to approach
the levels experienced in 2002,
NECA could seek additional remedies to protect its pooling
companies.
Changing Regulatory Rules
Under the FCC’s Triennial Review
Order, each state is deciding market by market where CLECs
can be forced to buy switches and where they’ll be able to lease
UNE elements. The CLECs and the
ILECs can argue their points before the states, but the fact
is the landscape will change. Some CLECs may become resellers, with others owning their own
facilities.
The difference is important in terms of interconnection agreements,
says Chris Watson, account
director for EUR. “CLECs will have to be very aware of what the new
pricing elements will be and what the effects will be
on their margins. The rating tables and the cost that you pay for the elements will change,” he says. If a CLEC moves to a resale model
then they are not going to get
CABs revenue, because it doesn’t own or lease network elements. “In
UNE, you can bill the IXC; in
resale, one views the network as someone else’s, so you don’t
get to bill for CABS.”
LNP, though primarily in the wireless segment, will further
complicate a wireline carrier’s ability to
determine where the calls originated. The wireline to wireless
porting of numbers means that calls
made on wireless phones using the ported wireline number
frees that number to roam far away
from the central office where that number originates.
Therefore, the information needed in CDRs to jurisdictionalize
calls may not be there.
“There’s no indication if you’re terminating in your rate center
or in your state,” CommSoft’s
Jackson says. “When a wireline number ports to a wireless carrier,
and a customer calls that
wireless number, all you know is where it’s been redirected to; you
can’t tell if it terminated in
LATA, within the state or which rate center.”
Poor Inventory, Bad Billing
As in any billing system,
the results are only as good as the elements used to
record call events. That is also true when carriers don’t understand
where the interconnection points are, or if the data
being transferred at those interconnection points is inaccurate
or incomplete.
“One of the biggest issues that bleed money is the provisioning
of special circuits. That’s what a
majority of our clients are facing,” says Tom Charlton, CABS processing
manager for Alltel
Communications. “The data integrity at the interface between special
circuits and the CABS billing
system is vital. That interface historically has been an
issue.”
Cleaning up those interfaces, inventorying the network, and “aligning
it to their database to ensure
they’re billing properly is a major undertaking,” Charlton says. “Those
inventories can take two to
three months; a lot more carriers need to do it than are
doing it,” he says. Without an accurate
feeding of data from those circuits, carriers won’t even know that
they’re getting traffic, much less
which carrier to bill.
Circuit provisioning is a dynamic process; new orders and
change orders occur all the time. “You
have to make sure things are in synch; you have to do that
through modification and evaluation
between those applications while cleaning up the data,” Charlton says. “Otherwise,
there’s revenue
being left on the table.”
"You have to validate the facility,” says Jonjie Sena, director
of product management at Ace-Comm.“
You’d better make sure it’s in your inventory. If traffic comes
in through a trunk, you have to make
sure it’s a trunk that normally serves you. Some carriers, as they
go into a trial proof-of-concept,
sometimes provision the facility, but don’t enter it into the billing
system or the OSS, and they don’t
know who’s on the other side of this pipe.
If a carrier has a circuit, and there’s no contract to be found
that mentions that circuit, you have a problem.”
Carriers also should have a handle on the type of call in
those records, whether it’s intraLATA, long
distance, long haul, a data call or 800 numbers. “If you encounter
a particular connection or service
type and don’t have an entry for that service, for the facility it
traverses for the particular partner,
you have potential revenue loss. You want to make sure you
can put a price on it,” Sena says. “You
can do that if your rate tables can describe all the interconnect
agreements you have.”
Sena suggests using network alarms to catch those unidentifiable
calls.
Other problems to look for include bad information describing
the circuit and its user; realizing that that circuit
is being used as a way onto the network, but it remains a
mystery as to who’s using it.
Unauthorized use of circuits will continue as long as no
one at the host network notices. The carrier
that uses it certainly won’t alert the terminating carrier; the game
in inter-carrier billing often
seems to be “wait for someone to catch you.” It’s a good
idea to review contracts, tariffs, rules and
other documentation and try to align it with the circuits
in the inventory.
Switch Mishandling Hides CABS Collectibles
Much has been reported in recent months about other carriers
either intentionally stripping the
calling ID number from calls or the network dropping the
information. Without that calling ID
number, the recipient of the traffic can’t determine who owns it.
While some carriers have been
accused of intentionally masking call origination, more innocuous
reasons exist for phantom calls.
Mark Jackson, solution architect for the communications solutions
group at Agilent, says simple
mistakes can ruin a carrier’s chances of recovering what it’s
owed. Agilent’s AcceSS7 product uses
SS7 probes to pull much richer call information than traditional
CDRs. There is some debate about
whether SS7 teardowns are for every carrier; some carriers
find the voluminous information pulled
using SS7 to be too much to wade through. It takes longer
to analyze, and opinions vary as to
whether that kind of detail is necessary for everyday call
maintenance.
However, Jackson has a good feel for the shortcomings that
traditional switches have when it comes
to missing information. When the CDR fields are incomplete,
software systems like AcceSS7 can drill
down into the SS7 signaling data and pull out vital information,
much more than origination,
termination, duration and time of day. SS7 records also let
carriers perform more detailed traffic
audits.
Some of the key mistakes carriers make have to do with how
they handle the programming of
switches, experimenting with code and other human intervention
events, Jackson says. “Take
automatic message accounting (AMA), for instance. The carrier
puts in a brand new load in a switch
along with a new database,” Jackson says. “An AMA call type
is changed and the CABS system
doesn’t recognize the new record, or something that is changed in
the switch causes the records to
be shut off.” Another problem can occur when you go in and add a new
code to the switch for
routing and it’s incorrect or overrides another routing command. Thirdly,
when troubleshooting a
switch, a value could inadvertently get changed in the database—and
that can disable the AMA
altogether. And it can go on for months without being detected.”
Sometimes an outdated switch is the problem. “The
switches were designed before the 1996
regulatory requirements and therefore do not record every
call.” SS7 CDRs created by AcceSS7 are
produced for all calls independent of the switch, and therefore
can be used with a correlation
[function] to identify missing or erroneous AMA.”
Sam Galler, vice president of marketing for Tekno Telecom,
agrees. Tekno generates SS7 CDRs for
billing, QoS, traffic engineering, fraud prevention and diagnostic
functions. “The accuracy is in
question both for retail and wholesale billing,” Galler says. “Switches
were designed to switch first,
and billing is a secondary or even a tertiary function. “Sometimes
the switches are not programmed
properly; they don’t send out CDRs, or they send out corrupted CDRs.
It’s a machine; it’s not
perfect, some are better than others.
Nor is the human element perfect. When programming the switch,
they change the billing criteria,
make provisioning mistakes, and the data gets corrupted in
the mediation process.” Galler brings up
another event that may skew call records: the long duration
call. In this type of event, a call that was meant to
end rather quickly continues for days, weeks, even months. “If someone
makes a domestic, data or international call that lasts for months
and realizes that the switch does not
generate a CDR until the call is hung up, how is that handled
from an inter-carrier billing perspective?”
Data calls are also a problem. These
are not the same as the traditional ISP dial-ups, which are
handled differently. Sometimes a bank or other company will
tie up phone lines while sending data
to the home office. “Even if it lasts two days, where are you going
to put it,” Galler says. “Let’s say
a customer makes a call to Nigeria. The switches do not generate
a CDR until the call is ended, and
when they send out the bill the carrier finds out that the
customer has left and is not going to pay
the bill. SS7 CDRs can solve these issues by generating partial
CDRs, even though the call is in
progress to alert a carrier from a fraud perspective and
generate partial CDRs for a wholesale billing
perspective so that the call is placed in the correct billing
cycles accurately.”
Finding Local Calls
Local carriers nationally struggle each month to differentiate
between local calls and
intrastate/intraLATA calls. The jurisdictions are rated differently,
and there is no sure-fire way in the
industry to separate the local calls from the intrastate/intraLATA
toll calls.
“The majority of switches are not set up to identify these
calls correctly,” says Stan Redden, director
of software development at CDG. “The biggest problem right now in
CABs is determining the
difference between a local and intrastate/intraLATA call.” The jurisdiction
of a call can be
determined through the process of elimination. One way LECs
can do this is to take the total
number of calls and determine the interstate calls from intrastate
through the use of a factor known
as the percent of interstate usage (PIU). The intrastate
calls are then separated into their interLATA
and intraLATA buckets, where another factor, the percent
of local usage (PLU) can be applied to the
intrastate/intraLATA bucket to determine the local calls.
While the PIU is an accepted industry
method for determining interstate usage, the PLU has not
gained approval in most cases and is
used in very few LEC-to-LEC billing agreements.
This highly imperfect way of determining local calls is,
unfortunately, a nationwide problem, says
Vince Kocher, manager of mediation at CDG.
The industry lacks a table, or matrix, that carriers can
use to nail down true local calls apart from
the intrastate/intraLATA calls. Carriers can turn to industry
tables, such as the local exchange
routing guide (LERG) or Telcordia’s terminating point master list,
which identifies all of the NPANXX’s
numbers in the North American Dialing Plan. But these don’t complete
the job and can be
time-consuming and expensive.
Telcordia recently released its Local Calling Area Data Source
software, which is designed to better
differentiate between intraLATA and local calls. Carriers
have several other ways of identifying local
calls. “We use a vast array of methods to determine local calls,” Kocher
says. “We can use the
Terminating Point Master, and when that doesn’t solve the issue, we
sometimes have to look at the
trunk group number or at a client provided calling scope
table. The problem with the calling scope table is that most companies, CLECs in particular, don’t have this
information readily available and
it can be expensive and time consuming to gather.”
Companies such as Tele-Tech have developed such
a table, or software database to better identify
local calls. Redden says it and other products like it could
make it possible to separate local calls
from the vast pool of traffic.
“They gather this information from
the incumbent LECs across the nation and put it into a
local calling scope table based on To and From NPA-NXX’s.”
Linda Lancaster, executive vice president for CABS at Intec
Telecom Systems, has some interesting
numbers she’s put together on who’s paying whom and how quickly.
In spite of the talk about IXC’s
holding back on paying until they hear from their creditors,
CLECs aren’t all that prompt at paying
their CABS bills either.
For instance, Lancaster found that during one month, CLECs
were behind in payments to the tune of
$20,386,008.
When comparing lateness of payment, Lancaster also found
a big difference between North
American ILECs and the CLECs when figuring outstanding days
from date of the bill. CLECs waited
an average of 140.1 days from submission of the bill to pay
their interconnection fees, while ILECs
on the average waited 16 days. When it comes to validating
bills, alarm bells go off when the
difference is at 10 percent for ILECs and 10 percent for
IXCs, Lancaster says. In other words, if the
bill sent to these carriers is within 10 percent of what
they normally see on the bill, they won’t stop
to validate the bill.
It’s Time to Negotiate
Even if you’ve got a good handle on your network circuit inventory,
can identify the types of calls
your network is getting and the origination and ownership
of those calls, you’ll still have to collect
those uncollectibles.
"Carriers have to work on their relationships with other carriers,” Lancaster
says, because if the
carrier that owes you money doesn’t know someone at your carrier,
they’ll not work as hard to pay
the bill. “If they know you, you have a representative,” she
says. “If you can get them to know that
your company is interested in providing service to them,
they won’t slip your bill to the bottom of
the pile.”
“My idea is that you should start talking to them by telling
them they’re behind. No one should feel
bad about asking for their payment. ILECs are more adept
at this; they’ve been in this for a long
time,” Lancaster says. “They know if they don’t pay their
bills, there are consequences.”
One thing holding
up smooth dispute resolution and the collecting of the uncollectibles
is that there
is no uniformity in the electronic or paper methods of disputing
bills. “The IXC might create different
paper, dispute guidelines, forms for dispute, only those
aren’t uniform,” says Andrea Abad, product
manager for CABS at CommSoft. “The OBF has set up guidelines (OBF
issue numbers 2348 and
2307) to make it easier to exchange the same information
in a standard format to expedite the
resolution of these disputes,” she says.
Alltel Communications performs billing for its parent company,
Alltel, and a couple of other carriers.“ Our clients can do online
carrier inquiries, determine what the current balance due
from any given carrier is, determine who they are sending a paper bill or
an electronic bill to and the range from
CABS billing based on PLU factors,” says Alltel’s Charlton.
The bill tallies usage several times a day and lists balance
due at the bill cycle on the site are not in
real-time but are updated by batch several times a day. One
great function: carriers can look at
their bills, discover disputes before the bill is due, and
pay the portion of the bill that is correct—and
the disputed portion of the bill once it’s straightened out. The payoff
for Alltel is that communication
is open, disputes are caught early, and there’s no confusion about
when bills are due, or how
payment is made, removing stumbling blocks to collections.
Less-Prepared Carriers
at Disadvantage
When it’s time to validate CABS bills, a complex document with all
kinds of circuit definition, call
type, duration documentation, not to mention different bill
formats, some carriers are at a
disadvantage.
The best way to approach a validation is to first sort through
the bill at the aggregate level, by
facility, by carrier, by service or by point of interconnect
and service by carrier, says EUR’s Watson.
“If you’re talking
about an ILEC dealing with a smaller company, they normally
don’t
exchange details at this level,” he says. “When CLECs are doing
reconciliation, all they have is their own data. You won’t get it from an ILEC unless you pay for it. And if you don’t
have a reference point, what
are you going to base your dispute on?” The smaller carriers don’t
often bother because it’s an
expense. Each carrier must make the decision on whether to
invest in SS7 validation capabilities, or
do the best manually. Perhaps for small rural carriers that
can invoice their inventory rather easily,
and see a constant bill each month, such a big investment
may indeed not be necessary.
Though complex, billing for other carriers’ access to one’s
network still represents the biggest chunk
of billing revenue some carriers see. “For a lot of these carriers,
CABS billing continues to be a huge
source of revenue,” CommSoft’s Jackson says.
Because carriers large and small have come to rely on access
and interconnection payments as
steady revenue, the task of billing and auditing bills
correctly and paying them on time is crucial.
It’s a big part of carrier relationships and a constant point of
contention and can truly mean the
difference between profit and loss.
About CommSoft
CommSoft's software solutions give communication service
providers the ability to conduct their customer care
and billing operations from one fully integrated,
convergent system. Our ability to centralize data reduces costs, increases
efficiency and enables better service. CommSoft customers benefit from
the ability to offer a single bill for all their
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wireline, cable, and ISP. We have over 20 years experience providing
customer care, billing, rating, financial, cabs,
capital credits and provisioning
solutions. For more information, go to www.commsoft.net.
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