CABS Confusion Plagues Carriers

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 NPA-NXX’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.