And even though the growing use of virtual and discounted long distance services accessed via local exchange lines/trunks is making LCR less applicable, it still is an area in which dramatic savings can be realized without degradation of service.

Least Cost Routing (sometimes referred to as Automatic Route Selection) is still applicable for three main reasons:

Long-distance calls, and often local calls, can be placed over many different services, at widely varying rates;

The optimum facility for any given call depends on factors such as urgency, time of day, availability of facilities;

If there are more than three or four factors to consider, individual users cannot be expected to reliably choose the optimum facility. (Too much time is required.)

The 3 Levels of Least Cost Routing

Route Advance
A standard capability with many PBX systems. This feature routes outgoing calls to alternate facilities when the first trunk group is busy.

For example, in a system with Headquarters T1, Band-5 WATS and local trunks, Route Advance could be established so that headquarters’ calls would first seek the T1 channels.

In the event that the T1 is busy, calls would “advance” to the Band-5 lines. And finally, if the Band-5 lines were busy, calls would be advanced to the local trunks.

In this arrangement, separate access codes would need to be dialed to select Band-5 or local facilities directly. Queuing (see below) can also be applied to Route Advance configurations.

Automatic Route Selection (ARS)
This configuration allows for a single access code (usually “9″) to be dialed for all outgoing calls. After the call is dialed, the system then sorts through a hierarchy of routes to place the call on the lowest-cost available facility.

Hierarchies may vary according to number called, calling station, time of day, etc. Calls may be allowed to overflow to local trunks, or they may be blocked. A warning tone can be configured to alert the caller before it overflows to a different route.

As in the case of Route Advance, queuing and repetitive search can also be applied to ARS arrangements.

Queuing
This type of arrangement places callers in line to wait for facilities when all authorized routes are in use. This enables more traffic onto fewer and lower cost facilities.

The most common types of Queuing are:
Off-Hook Queuing functions so that the outbound caller stays on the line after dialing the call, and the call goes through immediately when a facility is available. This type of queuing is preferable when a maximum wait time of 30 seconds or less is programmed into the system. Off-hook queuing is an acceptable mode for waits up to one minute.

Call-Back Queuing functions so that the outbound caller hangs up after dialing the call until a facility is available. When this happens the number is dialed automatically. Call-back queuing is preferable if waits of longer than one minute are allowed.

Least Cost Routing, where applicable, is still an area that can provide considerable cost savings.

Submitted by: TelCon Associates, Inc. 

While the percentage of errors is high, billing errors usually account for only a small portion of total savings during telecommunications audits.

Nevertheless, it is a good idea to be familiar with the most common errors that will appear on your local telephone bills. Keep in mind that errors may take the form of “overbilling” and/or “underbilling”.

Routine examination of your local phone bills will, sooner or later, turn up the one or more of the following most common types of errors:

#1 - Intermittent Errors

Intermittent errors are just as the name implies - they appear on a non-regular basis. This type of error is usually associated with the “Other Charges and Credits” pages of the phone bill. Examples of intermittent errors may include:

• Other charges and credits for installation or changes are often found to be incorrect, especially for services provided under many negotiated deals or contracts.
• Incorrect applications for refunds or credit adjustments is another typical intermittent error. Surprisingly, you may find this error soon after your carrier representative has agreed to the refund or credit!
• Charges for uncompleted calls are sometimes found on billings from two types of vendors-resellers using feature group A connections to carrier central offices, and vendors that are reselling service from a virtual private network.
• Facility malfunctions can result in you being charged for lines that are not working resulting in higher charges for usage forced onto other lines or services.

#2 - Recurring Errors

Recurring errors are the result of incorrect information and data in the vendors’ customer service records. These types of errors can be very costly simply because they appear each and every month until they are corrected.

Examples may include: inventory discrepancies, contract discrepancies, differences in tariff or rating regarding grade of service, mileage charges, enhancements, etc.

Recurring errors are not as easily uncovered as are intermittent errors. This type of error can only be corrected through a thorough audit of customer service records. A routine examination of phone bills will not reveal all recurring errors.

#3 - Tax Errors

Tax errors are most commonly associated with exemptions or incorrect taxing districts. When facilities are taxed incorrectly, the associated usage charges may also be taxed incorrectly. Examples of tax errors may include:

• Taxes being collected after exemption has been filed (a copy of the applicable exemption certificate or earlier exempt billing will verify the overbilling)

• Exempt account without authorization
• Taxes applied for wrong jurisdiction
• Taxes applied despite statutes or rulings exempting them

For more basic information on telecom taxes, refer to this newsletter article - Understanding the Taxes Imposed on Telecom Bills.

#4 - Metering and Database Errors

These types of errors are commonly associated with local and long-distance calling charges. They can occur through metering malfunctions or clerical transcription errors. Examples include:

• Double metering (easy to identify since each call is shown twice and in complete detail)

• Charges for incomplete calls
• Usage from a different subscriber (another easily identifiable error-charge for another individual’s line number will appear on carrier bill)

#5 - Telecom Agent Errors

Agent errors continue to be a problem as more and more agents are accepting either partial or end-to-end responsibility for service segments provided by vendors.

Agent misfeasance occurs when a supplier orders or assumes responsibility for service segments provided by several different carriers or vendors, then fails to exercise responsibility for those services. Examples may include:

• Local lines ordered and installed by equipment vendor or IXC. (In the event those lines are no longer needed, the agent is nowhere to be found to cancel the unused lines and services!)

• Excessive or sub-optimum facilities installed
• Promises of credits or changes that fail to materialize

Telecom billing errors will never disappear. However, even a little knowledge in what kinds of errors to look for can go a long way in reducing telecom expenses.

TelCon Associates, Inc. 

Although it may be the same boring set of copper wires that connects to a standard telephone and rings when calls come in, the local phone service portion of your company’s telecommunications bills is the perfect place to begin your telecom cost reduction efforts.

Here are 8 quick ways to begin cutting your local phone service bills. Check them off one by one when completed and you could reduce your local phone service bills by up to 10% or more.

1) Determine the proper local service plan for your needs - then regrade if necessary.

Many Local Exchange Carriers (LECs) offer three basic types of local service plans. Flat-Rate Service allows for unlimited calling within a local area at no additional charge. With Measured Rate Service, charges are applied to local calls according to time and/or distance and/or time of day. Message Rate Service which applies charges to each local call without regard to duration or distance.

Analyze your company needs through observational and personal surveys, then determine the most cost-effective local service plan. You will be amazed at the savings by simply implementing the appropriate plan for your company’s calling patterns.

NOTE: When regrading from a flat-rate service plan to a measured or message rate plan, be sure that you are aware of the extent to which employees are making personal calls. Also, consider any lines that may be connected to frequently used services such as apartment door answering systems.

2) Remove unnecessary or unused lines.

Historically telephone companies have recommended and provided quantities of access lines sufficient to provide a P.01 grade of service. This means that no more than 1% of all callers will receive a busy signal during the busiest hour of the day. P.01 is appropriate for some situations, but it does result in many customers having many more lines than are necessary.

Take inventory of all the lines that are being billed, then track them down and determine their level of importance during day to day business activities. Eliminate lines with phone numbers that cannot be identified, lines that ring with no answer, and/or measured or message rate lines that show no usage.

For more advanced telephone traffic calculations, use , our online telephone traffic analysis program.

3) Remove unnecessary or unused line features and services.

More often than not, most companies have lines that contain features and/or services that are either not needed or are rarely used. The problem arises when features are added to serve a specific purpose or employee, then not removed when things change. Over time, many features may be included on lines and users have no idea they are even available.

Your previously conducted circuit inventory will help you determine the specific features needed for each line. Wire maintenance charges should always be eliminated. These charges can be as high as $6.00 per month for each line!

4) Block expensive pay-per-use features.

Directory assistance call completion, repeat dial and call return are nice and convenient for employees - but they will cost your company over time. These features can and should be blocked through your carrier immediately. If any of these features are needed, contact your LEC and ask if a monthly fee be paid for unlimited usage.

5) Review the summary section of your bills every month.

Nothing can take the place of a well-designed and systematic telecom audit of your entire telecom department. However, a quick monthly scan of the summary section of your local telephone bills will sometimes turn up “golden nuggets” of savings.

Common problems include: more than one long distance carrier included (slamming), bogus Internet charges (cramming) from companies other than your ISP, and directory listings that are not listed. These charges can run as high as $29.95.

To maximize savings, review each bill every month. Bogus charges will continue month after month until they are removed. And don’t be surprised if they magically appear again in 2-3 months time after they are removed from a bill.

6) Consider upgrading to a T1 if you have more than 20 lines.

For smaller businesses, installing a T1 line into your PBX system can reduce your local telephone charges. A T1 can be cost-effective because it combines many outgoing lines into a single digital line that runs from your office to the LEC central office. The T1 can replace up to 24 POTS lines in your PBX. No one will notice a difference except maybe the person who pays the bills. In addition, a T1 can carry data as well.

7) Gather customer service records (CSRs) from your LEC for more detailed local service analysis.

A great deal of information can be found on CSRs that are not contained on your monthly billing statement. They are an invaluable resource when attempting to identify unneeded services and unused lines. CSRs reveal the quantity and types of lines, their PICs, service elements, hunting arrangements, wire maintenance, circuit termination locations, directory listings, and a host of other esoteric information.

Obtaining your CSRs from the LEC can be a painful and time-consuming process, but the effort is worth it in savings and credits that are eventually rendered. Some LECs will charge a fee issuing CSRs, but with some persistence, you may be able to get this fee waived.

8) Consider engaging a telecom consultant for telecom auditing, bill management or telemanagement services.

Time is money. If your staff is not prepared to consistently implement the above tasks, consider engaging a professional telecom consulting firm to handle them for you. Ideally, a telecom audit done first will turn up many areas for potential cost-savings. Then a monthly bill management program will keep bills clean and free from those pesky recurring errors.

At TelCon Associates, we have structured our consulting services for maximum savings to the client with no risk. We place our emphasis on details, timeliness and a high level personal service for our clients.

The Truth About Telecom Outsourcing and How To Select a Telecom Consultant will give you more specific information regarding this subject. The Telecom Cost-Cutting Reference Manual is an excellent resource for those that would rather do it themselves.

So get to work on reducing those local phone bills. You will be glad you did.

TelCon Associates, Inc. 

• Billing Errors
• Unclaimed Exemptions
• Over provisioning
• Sub-Optimum Rates
• Sub-Optimum Vendors/Facilities
• Abuse
• Fraud

1) Local services are the least likely to be monitored. Be sure you check each of the seven areas when reviewing your bills.

2) A back-up or overflow line costs roughly half that of a flat line.
These lines will save you money and are perfect for alarms, metering services, or any line function that has very light use.

3) The “summary” section of your local telecom bill will reveal items that should not be there.  Fraud, (i.e. cramming, slamming, late payment charges, etc.) can be found in this section. ALWAYS thoroughly review the summary section when paying each monthly bill.

4) Always secure the Customer Service Records from your local carrier when conducting a thorough audit of your bills.
Simply looking at your monthly bill will not uncover costly errors that could be buried within the customer service records.

Many business owners, managers and controllers make the mistake that telecom cost savings can be found in ‘big ticket” items such as long-distance services. Choosing the correct local telephone service package is the first and most important step in controlling telecom bills.

Three Types of Local Telephone Service

In most states, three types of local telephone service are available to business customers.

1) Flat-Rate Service: the line cost is high, but the user can make unlimited local calls on the line at no extra charge.

2) Message-Rate Service: the line cost is lower than a flat-rate line, but the user pays an additional per call charge, usually $.07-$.12 per call.

3) Measured-Rate Service: the line cost is usually low, but the user pays for each minute of local outbound calling. There is an initial rate for the first minute and a lower rate for each additional minute of the call.

Before deciding on a local phone service type for your business, first identify, or estimate, the amount and duration of outbound local calling for all lines at one location for a one-month period.

Here is one simple example of a business and the appropriate service plan for its usage:

A plumbing parts manufacturer receives hundreds of inbound calls daily. These are calls from vendors, suppliers, contractors, etc. Most of these calls come in on the company’s toll-free number. Out bound local calls are relatively few but when they are made, they can be long. These outbound calls average 10 minutes or more.

The best local service choice for this company is Message-Rate Service.

Why?

Because the outbound local calling is relatively low, but the calls are long. The company could choose Flat-Rate Service, but the cost of each line would be higher than Message-Rate. Measured-Rate Service is inappropriate because the outbound calls are long, and there is a per-minute charge for calls with this service type.

Message-Rate Service allows the company to pay a lower line charge, and then pay once for each outbound call made.

Understanding the calling patterns for your business and learning the local service options available in your area are important first steps in reducing your telecom expenses.

Analyze your local bills now. You’ll find savings you never knew existed!

While a simple review of telecom bills can reveal cost-saving savings opportunities, Customer Service Records contain very specific information and data. Most suppliers will release a copy of a CSR when requested by a customer or auditing firm on their behalf.

What is a CSR?

A CSR is a copy of how your telephone records appear in the telephone company’s database. It contains information about each separate line charge (i.e. type of service, federal access charge, number portability charge, calling blocks on the line, 911 charge, etc.) that encompasses your monthly service charge on your bill.

In addition, a CSR reveals the service location of the account, the billing address, additional directory listings, PIC designations, hunting order, features that are being charged and on which line these features appear, calling plans that may include monthly charges, and taxes applied to each of the items on the record.

“Customer Service Record” is the most commonly used term for the internal record of your account. Others may include a “2733″ or “PBX/Key/Multiline” record. (SBC) Some LECS use the term “Service Record” or “Billing Services Record” while others have no record at all. These would include the Mom and Pop telephone companies and CLECS. They can usually type them manually with the information you request.

Universal Service Order Codes (USOC)

Customer Service Records are written in codes, commonly called USOC, or Universal (or Uniform) Service Order Codes. These codes are literally a foreign language to most, so allow yourself plenty of time to become familiar with the USOC codes used by your local carrier. A more in-depth discussion of USOC codes will be discussed in a future issue of this newsletter. At TelCon Associates, we’ve developed a database of over 10,000 USOC codes. CONTACT US for information on this valuable auditing resource.

The Four Main Sections of the CSR

A typical CSR is divided into four sections: The Header Record Section, the List Section, the Bill Section, and the S&E Section. Below you’ll find a summary of what each section contains.

The Header Record Section

This Header Record section is found at the top of the CSR, and details information about the CSR and the account itself. While CSR’s do not always contain identical information, generally the header section will include: the print date, billing period, directory, class of service (business or residential), customer identification code, account number, USOC code and quantity of service items, description of service, unit rate, total monthly charge, and tax.

The following two sections of the CSR contain important information about your company.

The List Section

The List section identifies whether or not the account is listed in the white pages of the telephone directory, as well as how the listing reads. Ironically, there is an extra charge for non-published listings, unless there is already another account listed at the same service address. The code NLST indicates that it is NOT listed in the the telephone directory although it still may be listed with directory assistance operators. SIC defines the service industry for proper Yellow Pages headings.

The Bill Section

The bill section of the CSR includes: bill name (BN1), bill address (BA) and tax area (TAR) for the account. The billing address is oftentimes different from the bill name.

The Service and Equipment Section

This section is the most important part of the CSR. Since this area lists all charges associated with each phone line, the bill section is also the area where USOC and nomenclature translations are necessary, in order to identify the exact line items. It is this area of the CSR where you will spend the bulk of your auditing time.

Obtaining and reviewing CSR’s is an important part of the telecom auditing process. A thorough job can be a time consuming and tedious, but the cost savings and increased efficiency is well worth the time and effort.

About the Author

Robert Potter is Vice-President and Senior telecom consultant for TelCon Associates, a 35 year old telecom bill auditing and telecom bill management consulting firm.