Phone Service Background Information
Phone Calling Network (PSTN)
Local Calling
The phone network in the United States is organized into Local Access and Transport Areas (LATAs) to facilitate local calling. Depending on the size of the population, a LATA may include a single city, several adjacent towns, or an entire state. New York City and the surrounding metropolitan area are in LATA 132, and several area codes may be served a single LATA.
Prior to 1984, each LATA was served by one of the original Bell Companies, and is referred to as an Incumbent Local Exchange Carrier (ILEC or LEC), providing telephone numbers and dial tones associated with the area codes included in that LATA, as well as handling local calls. After the break-up of the Bell monopoly in 1984, new telephone companies were established (e.g., PINS in NYC), each of which utilizes it's own, dedicated telephone switches to handle calls, and is referred to as a Competitive Local Exchange Carrier (CLEC). Telephone companies that do not have their own switches, do not originate any calls, and can only act as resellers of telephone services. PINS functions as both a CLEC in NYC and as a reseller in various markets around the country, including Boston, Denver, Portland and San Francisco.
Calls made between parties within the same local calling area, typically the same city or town, are referred to as "local calls". In some areas, local calling may extend to include several towns that are in the same LATA. These calls are handled by the local carrier.
Regional Calling
Calls made within the LATA, but beyond the local calling area are referred to as "regional calls". These calls are also called "Local Toll" or "IntraLATA" calls. Until recently they were handled by the local carrier, but billed like long distance calls. Now they can be carried by either the local carrier or the long distance company.
Long Distance Calling
A telephone company that has installed copper and/or fiber optic cables across the country which are capable of handling long distance calls between the LATAs (including toll-free calls), is referred to as an Interexchange Carrier (IXC). When a call is initiated by a LEC in one LATA, it is handed off to the IXC, which in turn hands off that call to the LEC in a different LATA. Long distance calls are referred to as "intrastate" if both LATAs are in the same state, and "interstate" if the LATAs are in different states. Some local carriers, such as Verizon and SBC, can provide local, regional and long distance service. PINS is a long distance carrier based in New York City and manages the bills for other IXCs throughout the U.S., such as Qwest and Global Crossing
Phone Regulation and Charges
Service Charge
Each local and long distance carrier establishes it's own rate schedule for the services it delivers within the regulatory structure imposed by the Federal Communications Commission (FCC) and the analogous agencies that have oversight in the states in which the company operates. The service charge is a fixed monthly cost associated with the cost of the company providing to the customer a dial tone and access to the PSTN. The magnitude of this charge depends in part on how service is delivered, i.e., via an analog line (POTS) or via the Internet (VoIP).
Usage Rates
In addition to the "service" charge, a "usage" charge is billed based on the geographical relationship between the person making the call and the person receiving the call, and the number of minutes the call lasts.
As a general rule, usage rates charged for calls made are broken down into the following categories for billing purposes:
- local
- regional
- intrastate
- interstate*
- international
- toll-free intrastate
- toll-free interstate
[*Note: The term "Interstate" usually refers to the 48 contiguous states, also referred to by the acronym "CONUS". Higher rates typically apply to calls made to Alaska, Hawaii, Puerto Rico and the and the US Virgin Islands.]
In addition, many carriers offer bundled plans which provide a fixed number of minutes of local, regional, intrastate or interstate calls for a flat monthly fee. In general, per minute charges are likely to be more cost effective than bundles, but bundles offer the advantage of a phone bill that doesn't undergo large changes from month to month as calling frequency changes.
Fees and Surcharges
A wide variety of fees and surcharges are imposed by both the regulatory government agencies and the telephone company. All phone companies are required to charge the government-mandated fees and surcharges, which are imposed to maintain the integrity of the PSTN and also to pay for the cost of regulation. However, many phone companies add other charges to their bills which may look like government charges, but in reality are just part of the cost of doing business and could be included in the monthly cost of delivering phone service and the usage rate structure of the company. As a consequence, in comparing the cost of service offered by different companies, it is important to look at the total cost of the service charge, usage rates, fees and surcharges. In order to maintain the most transparent billing system for our Clients, PINS only charges government-mandated fees, such as the PICC charge.
Taxes
All telephone companies are required to collect the state-mandated tax on the services they deliver, which is then passed on to the states in which they operate.
Contract Issues
Normal Contract
Telephone services are normally contracted for a specific length of time in order to amortize the cost of setting up the service in the customer's office and contracting with the underlying Tier 1 carrier that is also involved in providing service. The minimal contract length is typically one year, but many companies offer longer contracts which come with lower rates or waiver of setup costs. Once the initial contract period is completed, companies may either automatically renew for the same contract period, or extend service on a month-to-month basis.
Slamming
When ordering long distance service from a telephone compay, it is up to the local phone company to make an entry into a government-regulated table that controls which long distance company will handle your calls. If the local phone company makes a mistake with your order or makes an incorrect assumption about what you want, your long distance service may be handled by a different company than the one you originally contracted with, and the rates charged will be controlled by that company.
Slamming refers to unethical practices by some telephone companies to trick a customer into unknowingly switching their long distance service. An unscrupulous sales representative will call your office and trick your staff into changing your long distance service to that company. When that practice is intentional, it's called slamming and is illegal. Whether intentional or not, you can be switched back to your carrier of choice at no charge by notifying your local company.
Unauthorized changes in your long distance service provider can be prevented by putting a "PIC block" on your lines. This is done by the local phone company, and involves password protection or written authorization for carrier changes. There is no cost to do this - other than the administrative time, but it can save a lot of future hassle.
Dial Around Codes
All carriers have special codes that allow callers to bypass the regional and long distance programming set up on the lines. For example, dialing 10-10-288+1+area code+ phone number will bypass the regular carrier, and route the calls over AT&T's network - for just that one call. The code for MCI is 10-10-222. The code for Qwest is 10-10-432.
These codes can be useful in testing your long distance service carrier. Let's say you've been using Qwest and had project codes which suddenly stop working. Dialing the call with the 10-10-432 prefix would force the call onto Qwest. If the codes work on the forced call, you've been slammed. If the codes don't work on the forced call, then the problem is with Qwest.
