Billing Q&A with Jim O'Neill

Q—We are a fair-sized wireless company and have roaming agreements with medium and large carriers throughout the United States and Canada. What will happen when my subscribers are roaming elsewhere, access the Internet through their handset, and obtain some service that may be passed back to me for billing?

A—Well, your question is right on the cutting edge, but I am afraid I don’t have a cutting-edge answer for you. However, your question is beginning to get a lot of attention, not only in North America but in other parts of the world as well.

The scenario you posed suggests a level of complexity we have not yet encountered, so first we should review what typically happens in a roaming situation currently. In today’s North American environment we don’t have too many intelligent phones that can store profiles and prepaid balances, so that avenue is closed to roamers.

When you press your “Send” button to initiate a call while roaming, the network queries your home carrier switch to confirm that you are a valid customer. (If you are not, in most markets your call will be torn down as soon as a signal from your home switch is received.) When you finish your call, a call detail record (CDR) is generated at the serving switch and eventually sent to your home carrier for billing.

With some exceptions, most carriers use one of the clearinghouses to manage roamer traffic. So the CDR arrives back at the home carrier “eventually” because, except for carriers using ANSI-124 technology to send roamer call information home immediately, it will be a day to a week before the serving carrier sends roamer CDRs to the home carrier. And therein lies the key to the problem: we have no real-time linkage between the network, which may know what services you are using, and your home carrier billing system, which knows how and when to bill you.

So, back to your original question. What will happen will depend on how and when billing systems, clearinghouses and network managers all sit down and decide how to manage this new Internet world for services requiring one or more payments.

In the current Internet access model, most carriers are using the flat-rate approach. This model may continue until carriers are convinced of the potential of IP networks and of the product and service innovations they’ll be able to offer over those networks. The major challenge for operators will be the new services. It has been suggested in some industry forums that carriers should try to stop thinking like telephone companies and start thinking more like service providers that will be offering subscribers a rich variety of content products and services.

Local carriers are facing this challenge of billing for content with the current Internet model, in which all they actually have is the access piece. The issue for carriers will be to determine whether the increasing traffic will be enough to compensate for overhead costs. Think about it—in today’s environment, do U.S. carriers have any idea of the relative value of data passing over their networks? In Japan, operators are already making revenue from the content, services and products that their networks carry.

It gets even more complicated with roaming. As noted above, there is no linkage from a serving carrier back to the home carrier’s billing system. The simple solution is to have the roaming subscriber pay for all content purchases by credit card. But that won’t necessarily enable the serving carrier to be compensated for that activity. Some activities will have high value (say, video streaming or video conferencing). Others will have relatively lower value (real-time sports scores or stock quotes), but could still be charged for separately.

In one approach under way in Europe, some GSM operators are allowing prepaid roamers to obtain service by actually connecting back to the home carrier network to access the mobile roamer’s prepaid balance. That could be one solution. However, it would require serving carriers to be linked (either through high-performance clearinghouse routes, or perhaps over the Internet itself) back to home carriers, to either preauthorize content purchases or have the home carrier handle the transaction.

In that way, billing options could be based on the relationship between the roaming subscriber and home carrier. With access to the subscriber profile, the home carrier could either debit a prepaid balance, accept the charge for the service and post it to the subscriber’s next invoice, or pass the charge directly to a credit card.

A number of bodies around the world are considering these questions. They include the Internet Protocol Data Record group (www.ipdr.org) that is defining standards to identify Internet transactions; CIBERNET (www.cibernet.com) and the GSM Association (www.gsm.org), which deal with wireless roamer issues; ATIS/OBF (www.atis.org), the North American organization that deals with message exchange for land-based services; the Location Inter-operability Forum (www.locationforum.org), which addresses issues arising from location-based services; and the Global Billing Association (www.globalbilling.org), which works with most of the other groups mentioned and is dedicated to identifying billing issues and supporting industry efforts to resolve them.

Over time these and other groups will resolve the concerns you have raised. It won’t be easy, and it won’t happen overnight—so stay tuned!