Telecommunication Billing – What the telephone Company Doesn’t Want You to Know

Communication is the lifeblood of business, and telecommunications are at the heart of all business communication. Companies understand that they need reliable, quality service of sufficient capacity to take care of their needs plus they are often intrigued by the latest service or technology; but the billing structure remains a mystery to many. Telephone service is overlooked concurrently 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 fairly good job of connecting businesses to their customers. The issue with former monopolies is they continue to think and act like monopolies.

With quality and reliability issues fairly well resolved, businesses are focusing their attention on the cost of service. However, many companies rely on the phone 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. It is very important understand that in the course of trying to improve its bottom line, the phone company may not be researching to help you lessen your phone service costs. Is it coincidence that 80% of billing errors favor the telephone company?

In 1934, the Federal Communications Commission was created to modify the interstate aspects 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, the State of Texas established the general public Utilities Commission to represent and protect the public fascination with regard to public utility rates, operations, and services. The Public Utilities Commission regulates the telephone company (along with other utilities) through tariffs that define the operations of the utility, the services it could provide and the rates it really is allowed to charge.

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

After the breakup of AT&T in 1984, businesses had to defend myself against a number of the responsibility of managing their telecommunications internally. Businesses now had to obtain their own phone systems and integrate them with the available service from the regional Bell operating companies, who still maintained a monopoly on service. Without internal expertise available, the most obvious answer was to hire former phone company employees to control internal telecommunications issues.

As complicated as 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 only their telecommunications technology issues, but phone service billing issues as well. Ironically, it is often a company’s internal telecommunications experts that prevent an organization from getting the best possible rates for the services they use.

Business phone service is at the mercy of two distinct types of billing errors: 1) usage errors based on the volume and duration of calls, and 2) rate errors using the costs and fees the telephone company is authorized to charge for phone service. Companies can themselves detect usage errors, but because billing structures are so highly complex, companies need specialized help to detect rate errors.

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

Tariff regulations are well outside the knowledge and expertise of telecom, IT and MIS personnel; and people with experience in telecommunications billing (usually former phone company employees) are usually trained to think just like the phone company and depend on the phone company billing policies to resolve billing issues. In summary, telecommunications personnel are simply just not qualified to handle tariff and rate issues. However, because most businesses rely on their telecommunications personnel to handle billing issues, some telecom managers may avoid attracting outside help for fear that when long-standing large errors are found, they will get 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 own hardware and infrastructure, but the the greater part were simply resellers of Bell service.

While you might expect that competitive pressures could have caused the industry to operate better with fewer billing mistakes, many factors actually caused billing errors to increase. In fact, for the seven largest phone companies, excluding cellular phone companies, consumer billing complaints rose 95% from 2002 to 2003. Lots of the problems that existed with the Bells prior to deregulation remained set up after deregulation and may 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 another layer of bureaucracy. Additionally, newer carriers were prone to internal billing errors because they were not yet familiar with their very own billing systems.

Rather than improve operational efficiency to become more competitive, some telecom companies tried to trick consumers into giving them their business, according to articles 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 along with 800,000 of its customers purportedly in order to draw inbound calls so it could pitch them on phone services whilst 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 incorrect fees refunded.
In another published example, a phone company in NJ, right after paying out over $25,000,000 in refunds, decided it would only pay 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 telephone company further complicated the problem by prematurely and illegally destroying customer support records that could be used to document how far back overcharges extend.