Billing Q&A with Jim O'Neill

Q-Why is it more difficult to bill for wireless calls?

A-It isn’t really more difficult, just a bit more complicated. LECs have to identify local and regional calls of their subscribers and compute any charges associated with them. In many cases today, if the call is long distance the charges are being computed by the IXC that carries the call. Charges for in-collects, such as credit card, collect and third-number charges, are generally computed by the company providing service and passed to the billing LEC via the landline clearinghouse, CMDS. Any other charges that are applied via open billing arrangements are also received rated.

Mobile carriers have to compute airtime for calls (in most cases both outgoing and incoming calls), apply discounts based on the subscriber’s plan, and determine any landline charges for local calls and in some cases long distance. In-collect roamer records arrive with the charges applied by the serving carrier. Increasingly, home carriers who offer wide-area coverage (like the new regional and national plans) are redefining the roamer calls as “home” and applying them to the subscriber’s basic rate plan.

Q-Can you explain how international calls are billed?

A-Each country in the world has a unique country code. The code for the United States is 1, Brazil is 55, the United Kingdom is 44, and so on. Carriers set their own toll rates from the United States to each destination country. As the number of country codes has grown in recent years, some billing systems support “international zones,” whereby all the countries that have the same per-minute rate are defined with the same zone number. Then, when a carrier wishes to change rates, only the zone tables have to be modified.

Q-Does a LEC keep a record of every call event?

A-Yes, and this answer generally applies to all telco switches, whether LEC, IXC or mobile. First, “call events” include every attempt by a subscriber to place a call. Whether in a coherent record or in segments recorded at the various stages of a call, most switches start recording from the time they detect an attempt until it is completed. If the call cannot be identified as a billable call based on the business rules of the serving carrier, it is usually bypassed by the billing system. Unbillable calls include such events as abandoned attempts (misdialed or incomplete digits) or incomplete calls (busy, ring-no-answer). Carriers that do not have automated operations centers to separately monitor network performance may use a copy of the call detail files from the switch to analyze traffic. By creating different views of the same data, carriers can identify originating and terminating call patterns, calculate call completion percentages, detect blocked trunks or outbound routes, identify underutilized routing facilities and develop other information useful for network management and marketing.

Q-Do state tax regulations apply where the service is provided or where it is billed?

A-Taxes are calculated based on where the service is provided, except for federal excise tax, which is applied by the carrier that presents the bill for the end user. Here is an example. Jane Z. lives in Maryland and has a mobile phone from a local digital service provider. All the mobile calls she makes in her home market are taxed (and perhaps surcharged) based on the state and local jurisdiction for that market. In February, Jane attended an industry conference in New Orleans and made a number of mobile calls as a roamer on the network of one of the service providers in that market. Those calls were taxed on the applicable state and local taxes in New Orleans, and passed to Jane’s home carrier via one of the mobile clearinghouses. The charges and taxes by the serving carrier were separately identified on those roamer records. For her next monthly bill, Jane’s home carrier totaled all the home and roaming charges and applied the federal excise tax to the total of both.

Q-Does it cause any problems if mobile roamer calls are not passed to the home carrier in time for the next billing cycle, and companies have to hold them for a later bill?

A-First, let’s review the industry standards regarding roamer message exchange. With few exceptions, unaffiliated markets will compute the roamer charges (and taxes, as noted above) and then pass them through one of the industry clearinghouses to the home carrier. While current rules allow up to 30 days from the call date to get roamer calls home, the vast majority of calls are passed within 5 to 7 days. So getting the roamer call onto an actual bill depends on a) the call date, b) how quickly the call charges are passed to the home or billing carrier and c) the subscriber’s billing cycle date.

That said, the problems are not major. The most common one is that the longer it takes for calls to appear on a bill, the more apt subscribers are to forget they made them. And that leads to customer service calls, requests for credit, etc.

On the landline side, rules for message exchange are not as rigid, and carriers may take longer to exchange out-collects. A few states have regulations that require a carrier to bill a call within 90 days of its date, or not bill for it at all.

Q-How do billing systems safeguard customer data?

A-The degree of effective security depends on the system you are using. Generally, modern systems have multiple levels of security. At the highest level is network security that should restrict access to those with a log-in name and password. An alert system administrator will require passwords to be changed frequently. Once logged on at the system level, users may access only those applications that they have a need to use. For example, only users in the accounting department will be allowed to access the payables and general ledger systems. A good billing system will offer access and restrict actions based on the profile of each user. For example, customer service representatives may be allowed to initiate a credit, but may be restricted to a maximum amount; agents may be allowed to access basic customer information, but not payment and other sensitive records.