Telecommunication Billing – What the Phone Company Doesn’t Want One to Know

Communication is the lifeblood of business, and telecommunications are in the heart of most business communication. Companies know that they need reliable, quality service of sufficient capacity to take care of their needs plus they are often intrigued by the most recent service or technology; however the billing structure remains a mystery to many. Telephone service is taken for granted at the same time that it’s grossly misunderstood. And, while businesses have historically been at the mercy of a monopoly regarding phone service, the telephone company has done a pretty good job of connecting businesses to their customers. The issue with former monopolies is that they continue steadily to think and become monopolies.

With quality and reliability issues fairly well resolved, businesses are focusing their attention on the expense of service. However, many companies depend on the telephone company to advise them on the most affordable services available also to insure that they are being billed properly. Others rely on their internal telecommunications personnel who have been trained to think like the phone company. You should understand that throughout attempting to improve its bottom line, the phone company may not be researching to help you reduce your phone service costs. Is it coincidence that 80% of billing errors favor the telephone company?

In 1934, the Federal Communications Commission was made to regulate the interstate areas of telecommunications. However, local phone service and in-state long-distance issues were left to the states to regulate.

In 1975, in response to public outrage about soaring utility bills and a telephone company scandal, hawaii of Texas established the Public Utilities Commission to represent and protect the public fascination with regard to public utility rates, operations, and services. THE GENERAL PUBLIC Utilities Commission regulates the phone company (and other utilities) through tariffs define the operations of the utility, the services it could provide and the rates it is allowed to charge.

Until 1984, telecommunications was the exclusive domain of monopolies, though it had been regulated in the State of Texas by the PUC. The monopoly was so tightly held that companies had a phone room in their own buildings that has been off limits to everyone however the phone company. Many businesses didn’t even own their very own phones.

Following the breakup of AT&T in 1984, businesses had to take on a number of the responsibility of managing their telecommunications internally. Businesses now had to obtain their very own phone systems and integrate them with the available service from the regional Bell operating companies, who still maintained a monopoly on service. With no internal expertise available, the obvious answer was to employ former phone company employees to manage internal telecommunications issues.

As complicated because the technology was, billing for phone service was even more complicated. Though these former phone company employees were, actually, technicians, businesses increasingly (and unfairly) relied upon these technicians to control not merely their telecommunications technology issues, but phone service billing issues aswell. Ironically, it is often a company’s internal telecommunications experts that prevent an organization from getting the greatest rates for the services they use.

Business phone service is subject to two distinct forms of billing errors: 1) usage errors using the volume and duration of calls, and 2) rate errors using the costs and fees the phone company is authorized to charge for phone service. Companies can themselves detect usage errors, but because billing structures are so highly complicated, companies need professional help to detect rate errors.

Tariff regulations are particularly complicated and are at the mercy of frequent change. The current tariff schedule for SBC alone comprises of over 8,000 pages, with some 250,000 pages of retired tariffs no longer in place. These rules are first interpreted by the telephone companies and summarized into billing, operational and service policies that are interpreted a second time by phone company employees implementing the policies. With two levels of interpretation, there is absolutely no surprise that the rates businesses pay for phone service varies greatly from the language of the tariffs.

Tariff regulations are well beyond your knowledge and expertise of telecom, IT and MIS personnel; and individuals with experience in telecommunications billing (usually former phone company employees) are usually trained to think just like the phone company and rely on the telephone company billing policies to resolve billing issues. To conclude, telecommunications personnel are simply not qualified to handle tariff and rate issues. However, because most businesses rely on their telecommunications personnel to take care of billing issues, some telecom managers may avoid bringing in outside help for fear that if long-standing large errors are found, they will obtain the blame.

The Telecommunications Act of 1996 introduced competition in the telecommunications marketplace. Various companies popped around provide alternative local phone service. A few of these companies provided their very own hardware and infrastructure, however the vast majority were simply resellers of Bell service.

While one would expect that competitive pressures could have caused the industry to use more efficiently with fewer billing mistakes, numerous factors actually caused billing errors to increase. In fact, for the seven largest phone companies, excluding cell phone companies, consumer billing complaints rose 95% from 2002 to 2003. Many of the issues that existed with the Bells prior to deregulation remained in place after deregulation and could have even been exacerbated by budget cuts and high turnover. Most competitive local exchange carriers were merely resellers of Bell service, who simply passed through any billing errors on the underlying service while adding yet another layer of bureaucracy. Additionally, newer carriers were prone to internal billing errors since they were not yet acquainted with their very own billing systems.

Rather than improve operational efficiency to become more competitive, some telecom companies tried to trick consumers into providing them with their business, according to an article by CBS News. Even probably the most reputable phone companies have already been accused of “competing by cheating” including continuing to send bills after service is terminated, and billing for services never ordered.

In a single published example from Direct Marketing News, AT&T was accused of incorrectly billing 200,000 to 300,000 non-customers as well as 800,000 of its customers purportedly in order to draw inbound calls so it could pitch them on phone services while getting around national and state do-not-call lists. Consumers who called to complain were allegedly told by AT&T agents they would have to sign up for a calling plan in order to get the wrong fees refunded.
In another published example, a phone company in New Jersey, after paying out over $25,000,000 in refunds, decided it would pay just refunds for overcharges back for three months. Their argument was that by paying the overcharge, the client was agreeing to the overcharge. While regulators repeatedly rejected that argument, it stayed used. The phone company further complicated the issue by prematurely and illegally destroying customer support records that may be used to document how far back overcharges extend.

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