With regulatory change opening the local exchange markets in the United States, many operators are supporting an increasing number of interconnections. Simultaneously, these operators are rolling out enhanced (Advanced Intelligent Network, or AIN-based) services, introducing Local Number Portability (LNP) and planning the full-service networks of the future. One major obstacle to success in these areas is finding a way to bill for this use of the network.
The market has seen frantic activity as competitors have acted quickly to grasp the opportunity, and Incumbent LECs (ILECs) have struggled to cope with the billing implications imposed by the recent regulatory rulings.
Overview of FCC Rulings
The FCC's rules provide several paths of entry into competition and rulings have focused on terms and conditions within three distinct areas:
• Transport and termination of traffic exchanged by telephone networks
• Purchase of "unbundled elements" of existing local telephone networks by competitors
• Resale of existing retail telephone services.
• The rulings have generally benefited new competitors in the local telephone marketplace, including cable operators, competitive local exchange carriers (CLECs) and long distance carriers. Wireless providers, including cellular carriers and PCS providers, have also benefited significantly as their interconnection costs fall.
The main implications of these FCC rulings have been felt within the ILECs, particularly in the area of carrier access billing (CAB) systems. Most LEC billing systems were designed for an earlier, noncompetitive era and require a major overhaul. They generally are not capable of accounting for the new ways the network is being accessed. So operators frequently impose flat-rate charges for wholesale interconnection and for enhanced services. They can't yet bill on a "pay for what you use" basis, which is fundamental to providing interconnection to network facilities and databases. Industry representatives are left to ask:
• How can we gain compensation for competitive access?
• How can we account and bill for unbundled network components?
• How do we charge for usage associated with resold lines?
• While these challenges will occupy the industry for some time to come, some important lessons can be learned from those who have tackled the issues head-on.
Charging for Competitive Interconnection
To access a complete customer base, all carriers must interconnect directly or indirectly with other carriers. As the dominant local loop provider, all ILECs must provide interconnection at any technically feasible point to other carriers requesting transmission of telephone exchange service and exchange access.
An area of much debate in the wake of the Telecommunications Act has been interconnection compensation. At stake is the level of charges competing carriers must pay the local phone companies to terminate calls on their monopoly networks. Debate over the financial model to be used for interconnection has ranged from "bill and keep"-an arrangement where no terminating charges are made-to full usage-based mechanisms calculated on a Minutes of Use (MoU) basis.
ILECs campaigned heavily against bill and keep, arguing that reciprocal-based usage charges were the fairest method because traffic was not in balance across network interconnections. However, ILECs have found that implementing effective usage-based charging for competitive interconnection has its own challenges. Traditionally, network elements have provided Automatic Message Accounting (AMA) data that forms the input to downstream retail and wholesale billing systems.
Unfortunately, many existing network elements were never designed to facilitate detailed recording of terminating usage on incoming or transit traffic. Even in situations where appropriate recording capabilities are available, enabling them to capture interconnect usage across a switch could swamp an already stretched downstream AMA collecting and billing infrastructure.
Many operators have turned to alternative recording mechanisms in search of an answer to this key business issue. The most widely adopted approach has been to use recordings based on the signaling message flow associated with each individual call. This message flow travels along the Signaling System 7 (SS7) links between interconnected networks. The SS7 messages are fundamental to setting up calls in a modern digital network and controlling the key aspects of communication between switches. (For more information on the role of the SS7 signaling network and deriving billing information based on SS7 data, see "Billing Data Solutions Using SS7," Billing World July 96.) SS7 messages can be processed and aggregated by a Link Monitoring System to produce a Call Detail Record (CDR). The CDR contains all the information required to bill a customer or interconnecting operator. Subsequent processing converts these CDRs into Bellcore AMA Format (BAF) suitable for transfer to existing rating and billing systems.
Unbundling the Network
For the Bell operating companies to enter the lucrative in-region long distance market, they must show that they are providing access and interconnection in accordance with the FCC 14-point checklist. Fulfillment of the requirements of this checklist is necessary for the RBOCs to petition the FCC for the right to enter the lucrative long distance market. Among other items, this checklist includes requirements for granting competitors nondiscriminatory access to call-related databases (such as 800, LIDB, CNAM, HLR and VLR) and associated signaling necessary for call routing and completion. Competing carriers will be permitted to buy these unbundled elements in any combination they choose.
Tariffs and prices of these unbundled elements will be set at the state level and it's likely that usage-based charging will be widely adopted as the most suitable way to ensure appropriate cost recovery. In charging for use of the SS7 network, the Ameritech Part 69 tariff structure is proposed for the industry as a whole. This rate structure, established by Ameritech, recovers costs associated with the provision of SS7 signaling services through four unbundled charges for the various functions of SS7 networks. These include Signal link, STP port termination, Signal transport and Signal switching.
Increasing use of the SS7 network as the foundation for Advanced Intelligent Network, Local Number Portability and Mobility (IS-41, etc.) is creating a drive to proper accounting and cost recovery. This becomes crucial with the realization that in a competitive world an operator's SS7 network can be used to carry messages as part of a service setup (that is, authentication for a roaming mobile user) -but the resultant call and associated revenue could bypass that carrier's network.
With the imminent introduction of Local Number Portability (LNP) into U.S. telephone networks, cost recovery has been high on the agenda of many incumbents. In particular, requirements have emerged for usage-based charging for untranslated calls arriving into the network and third-party access to ILEC LNP databases. To understand actual SS7 usage and gather information as the basis for determining tariff levels, many LECs are implementing Link Monitoring-based solutions to account for SS7 network usage between interconnecting networks.
The Wireless Perspective-CMRS Interconnection
Wireline telephony was not the only beneficiary of recent FCC rulings. Other market segments such as Commercial Mobile Radio Service (CMRS), i.e. Wireless Service Providers (WSP) -also face billing challenges on the back of new interconnection rulings. For the WSPs, however, the challenge seems more positive and welcome. The recent FCC Interconnection Docket and subsequent rulings on reciprocal compensation will give all WSPs a significant new revenue opportunity without adding a single new customer to their networks.
Previously, interconnections between LECs and WSPs were based on individual negotiated agreements with varying rate structures. Often WSPs paid originating access rates to wireline network operators, even when they terminated calls. Now WSPs are entitled to request interconnection and obtain access to unbundled elements in an incumbent LEC's network. More important when it comes to reciprocal compensation, all wireless carriers are entitled to payment from local exchange carriers (LECs) for calls made from the landline network to cellular customers.
Given the right to charge for terminating access since November 1996, many WSPs now face the challenge of developing a wholesale billing infrastructure to collect and account for terminating usage. The lack of such recording capabilities will ultimately mean lost revenue potential with reliance on negotiated estimates or other carriers' data. SS7-based usage recording represents an attractive alternative for many.
Billing Solutions Based on SS7 Data
The signaling network offers a source of data that can be captured, processed and formatted to create a usage-based billing system. Such a system can deliver the information needed by operators to bill for the services they provide by giving an accurate and timely accounting of all network activity. The information can also be used to verify the accuracy of billing records and statements.
Carriers using SS7 as a billing data source have found that it offers many benefits. These include:
• Capability to match tight implementation schedules. To meet the requirements necessitated by recent legislation, vendors have developed and successfully deployed solutions within months.
• Vendor independence. By its very nature, a SS7 link monitoring approach to gathering usage billing data is independent of the underlying network elements. Therefore there is no impact on SS7 network performance and, more crucially, no reliance on multivendor support for successful solutions.
• New revenue streams. The opportunity to bill for new services on a usage basis that is not feasible today, such as use of the SS7 network itself by non-ILEC carriers.
• Trouble-free integration to downstream billing and accounting systems. This is accomplished with the support for industry standard formats such as Bellcore AMA Format (BAF) and AMADNS/AMATPS transport mechanisms.
HP's acceSS7 monitoring system is one such SS7 usage billing platform. By passively monitoring the SS7 links, the HP acceSS7 system offers a uniform, non-intrusive method of collecting real-time data across the entire network. Billing applications for the HP acceSS7 system condense the mass of raw data into manageable information. The information is sent in batch format to an operator's revenue accounting office.
The Billing Process in a New Competitive Environment
New types of competitive interconnection and recent requirements to unbundle service components have created demands that traditional recording mechanisms, typically network elements, cannot meet. Upgrades to support the provision of appropriate data must be coordinated across multiple vendors, will be costly and are likely to take many years to implement and deploy. For those affected most by recent legislation the challenges are daunting, and in the aftermath of the Telecommunications Act SS7-based billing solutions may be the answer billing data generation issues.
Scott Bryden is a product manager with Hewlett Packard. He can be contacted at firstname.lastname@example.org.
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