CABS Revenue Assurance Disputes: May the Carrier With the Best Data Win
My previous blogs have focused on the importance of a great working relationship between software vendors and carriers. That’s why I’m pleased to have Cheryl Smith Rardin, manager, revenue assurance at Consolidated Communications, join me in this blog. Consolidated and Equinox have been working together since 1988, and we’re going to share the positive effect of our great working relationship. Specifically, we’ll talk about how we recently collaborated on a CABS Validation process at Consolidated.
David West: Welcome, Cheryl.
Cheryl Smith Rardin: Thanks for inviting me, David. First, I think readers would probably like to know a bit about Consolidated. Actually, I joined the firm 38 years ago when we were just a small rural operator called Illinois Consolidated Telephone Company. After merging with McLeod, then divesting from them, we acquired TXU out of Texas, which put us into metropolitan markets for the first time. Next was North Pittsburgh, which took us into our third state and the CLEC business. So our company name says it all: Over the years, we’ve “consolidated" several diverse operators under one telco.
David: Before we get into project details, Cheryl, I want to explain something upfront to readers. While the project’s mission was to create a good ROI for Consolidated through CABS validation, the situation was a big win/win because it also allowed Equinox to advance its software. This project became the vehicle for taking our TeleLink usage-analysis platform to the next level of revenue-assurance issues.
While we could have developed a CABS revenue-assurance platform in a vacuum, it’s not our style to initiate a major new development project without first getting a paying sponsor. And while I’m sure there are people who think that policy is ridiculous, we’re convinced that having a paying customer ensures that we are building something that’s commercially viable as it addresses clearly actual business needs.
Now for the project details: Cheryl, her boss and I were attending a conference on access avoidance. While there was a lot of talk (and not a lot of agreement) about “phantom traffic," the primary issue was clear — carriers, including Consolidated, were seeing a decline in CABS revenue. And everyone agreed that they didn’t want to see this cash cow to go away.
After a dinner conversation at the conference, we decided to partner with Consolidated to address this very issue. After much discussion, Equinox wrote a three-part product description and proposed a price. This initial statement of work simply stated that Equinox should 1) compare AMA to SS7 records and examine all the usage that traverses the network; 2) bounce the AMA against what comes out of the CABS system to make sure the billable usage is getting billed; and finally 3) compare actual usage to expected usage based on historical trends and industry standards.
Those three comparisons – AMA to SS7, AMA to CABS, and actual to expected usage – comprised our project plan. It’s a testament to Consolidated’s faith in us, coupled with the fact that our Protector fraud-management system had delivered for them over the years, that they gave the project the green light.
Cheryl: Actually the third, key partner in our deal was Sue Platner, an industry expert in all manner of CABS regulations and operations best-practices. Sue bridged our knowledge gap and helped us and Equinox talk to each other and troubleshoot. It was Sue’s job to go down the rabbit trails and figure out why things weren't matching up. And her industry knowledge also plugged the holes left by the CABS people who had retired or left the company.
We’re a typical service provider. We’ve got our heads down in operations, so we don't know what we don't know. With CABS, we didn't know what or where our process needed to change. And when you think about it, CABS is kind of an extension of your fraud-management system because the carriers you’re billing are looking to skirt any rule they can. Since they’re eager to get the lowest cost, they won’t tell you if you’re billing them less than you should. So we knew we needed to be more vigilant and look after our own interests.
David West: How did you know that there may trouble in your CABS processes?
Cheryl: Well one clue was a very high volume of disputes outstanding. Some carriers hadn’t paid their bills in months because they said the bills were wrong. Some companies may dispute things just to be ornery; however, we had several carriers with significant outstanding disputes. That’s when Sue Platner came along with this pearl of wisdom: “A high number of disputes means there’s something wrong with the process."
I think we are probably like a lot of companies. Our CABS processes had drifted along for 20 years without much change. We had never done any deep-dive evaluation. Plus the regulations are downright confusing. The NECA rules applied in Pennsylvania; there were price-capping issues in Illinois and Texas; there are so many different rules that play into CABS it makes you want to pull your hair out!
So it was a relief to get some help. We had never done some of the advanced CABS audits, such as reconciling AMA to SS7, to see what might fall out. This simple audit helped us identify a number of trunk groups where we didn't have messaging turned on for all billable record types.
David: Prior to this project, TeleLink analyzed usage and produced reports using LERG or TPM information to determine the jurisdiction. But Consolidated was the first customer to have us go further and identify local traffic using LCADS, though others have since followed using other data sources. Ultimately each CDR was enriched with information about jurisdiction (local, interLATA, intraLATA, interstate, intrastate traffic, toll-free, etc.), directionality and type (wireline, wireless, VoIP, etc.) and other important data points using reference tables and a number of complex algorithms.
While it was certainly a challenge to incorporate these complex rules into TeleLink, it was also a significant evolutionary step for TeleLink — like going from adolescence to adulthood.
David: Where were you able to find revenue using the three comparisons in TeleLink?
Cheryl: Clearly the biggest source of error was call-record generation in switching. Since Consolidated has been around for 100+ years, our switch environment is a mixed bag. We have some switches that pre-date the Internet era and wireless world as well as a number of newer soft switches.
With the newer switches, missing call records is a non-issue because those switches cut a call record for every single call whether it is billable or not. However, that’s not the case for the legacy local switches. Given the cost of storage-processing capability at the time, maximum efficiency was a big concern. These switches don’t automatically create a call record for each event, because much of the local usage is “non-billable."
In one case, we noticed a lot more billable usage reported on our SS7 network than we found based on the switch AMA records. Sure enough! When a certain type of traffic that was formerly “not-billable" became “billable," the switch was not configured to create call records for that.
David: This project was developmentally complex, for sure. For instance, there were also complex legacy rules and state-specific processes in place at Consolidated that had to be understood and applied so that we could create a true “apples to apples" comparison. Making things harder was the fact that in many cases, the person who had originally written Consolidated’s mediation rules many years ago was no longer there. In fact, in some cases there were two or three generations of employees between the person who originally wrote their code and the person now supporting it, and there was not a lot of supporting documentation on the mediation rules in place.
But our development team met these types of challenges head on and didn’t stop until all of the issues were addressed satisfactorily.
David: In the end, Cheryl, what do you think the project accomplished?
Cheryl: Well, senior management had a clear expectation of what the ROI target was and we pretty much hit that. Within the first 18 months, our total recovery was three or four times our initial investment. Of course, as we started producing results, our executive team took an added interest in our success and wanted to be sure we turned over every rock.
The recovery and continued success is possible because we have a great process and tools to deliver daily, weekly, monthly reports and graphs that detail the AMA to SS7 to CABS to usage comparisons. If something changes and there’s a disconnect, the team can act on it.
And it’s even gotten us into some of that “proactive" revenue assurance buzzword stuff. Before the CABS bill goes out, we can say, “Hey! wait a minute, we think there’s something wrong here. Let’s do some research and get it right."
David West: Thanks for joining me in the blog, Cheryl. Do you have any final thoughts?
Cheryl: Yes, we obviously benefited from the project on multiple levels. It was very educational. It’s made us more SOX-compliant. And it feels good to be working with a professional and up-to-date process. We were also able to unite our CABS operation across regions. Of course, it was painful for us to find things that had fallen through the cracks, but it’s been all good. I just wish we had done it sooner.
Best of all, we now have a great deal of data to back us up when a dispute arises. If somebody claims that we overbilled, it takes only a few clicks to provide the usage to support how we billed and successfully defend our position. We had push-backs from carriers in the past, but because we now have the data, I guarantee we can collect the money.
Bottom line: Whoever has the best data is going to prevail in the dispute. At the onset of the project, Sue cautioned our executives that we might not be able to collect everything that we were owed. I’m pleased to report that we eventually did collect 100 percent of all back bills!
Service providers who don’t have similar CABS audits and checks in place are likely missing several great revenue opportunities. As Sue Platner says, they are missing the low-hanging fruit.
David West is executive vice president of Equinox Information Systems, responsible for developing and implementing the company’s long-term strategic plan, including product design and marketing. West works directly with the company’s hundreds of customer sites across the United States, Europe and Asia. To learn more, visit www.equinoxis.com or call (615) 612-1200.
Cheryl Smith Rardin is responsible for accessing and protecting the company’s revenue streams in her current position as revenue assurance manager at Consolidated Communications. Before this position, Cheryl was tasked with identifying and preventing fraud in her role as Consolidated’s fraud prevention manager. To learn more about Consolidated Communication, visit www.consolidated.com.