Telecom Billing – Jurisdiction

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First, a qualifier and a disclaimer.  I have been involved in telecom billing for 25 years.  I have experience in rating, tarriffs, costs, design, programming, troubleshooting and monthly processing of telecom bills with more than a half dozen telecom companies and as many different billing systems.   I will be the first to say, that it is a changing field and what was yesterday may not be tomorrow.  That said, there are sets of common constants that are generally true and present on all the billing systems I have dealt with.   In this article I attempt to stay within a set of boundaries that I have found to be generally true and common across all the billing systems I have dealt with.  Time and circumstances may alter information over time, but my experience is that what I represent here is generally true and accurate.

I know that for most people, telecom billing is dry stuff.  That said, I have always found it very interesting.  Telecom billing requires an understanding of the telecom network, the call flow, products, rates, taxes, accounting, contracts, provisioning and bill distribution.  I am often involved in determining how a new service or call flow will bill and I can tell you that billing the call is usually more difficult than placing the call.   Thinking on that, I decided that it might be useful to write a few things about telecom billing.

One important term to understand is Jurisdiction.  Jurisdiction describes how a call should be taxed and rated and to whom those taxes will be paid.

The terms used for jurisdiction are;

  • Inter-Lata
  • Intra-Lata
  • Inter-state – Intra-Lata
  • Inter-state – Inter-Lata
  • International

(To find out how we came to have all these ‘Jurisdictions’ – read The Deal of the Century: The Breakup of AT&T)

Each of these call types affects the rate or cost of the call and amount of taxes that are assessed.  And it seems that everyone wants to get in on taxing telecom services, both state and local governments.    According to a study by the Council on State Taxation, a telecommunications provider filed an average of 47,921 tax returns, compared to 7,501 returns for the average general business. (See Consumer Affairs Article 2004),  Not only making telecom a highly taxed service  but also making it all the more complex to bill.  In addition to its impact on taxes, jurisdiction also affects rates.  The costs associated with processing the call by both the Local Exchange Carrier(LEC)  and long distance carriers are affected by whether a call is intra-state or inter-state.  Usually inter-state is less expensive.  (See Telecommunications Tariffs)

Telecom providers derive call jurisdiction by determining where a call came from and where it went to.  This can be done several ways.  When available, the callers ANI or caller ID is used to determine the origin of the call.  However, it is not necessary for a call to have a valid or complete ANI for it to work and inContact get thousands of calls that have incomplete or invalid information.  InContact has to then decide whether or not to process that call with the invalid ANI or caller ID.  InContact has elected to process those calls and to utilize other information available to it to establish the calls jurisdiction.    One source of information can be the contract which contains address information for the customer.   If the call came from a T1 or dedicated circuit then we can use the address for the T1 as the point of origin.    Next we look at the number dialed to determine the destination.  Using these two items, we determine the jurisdiction of the call for both rates and taxation.     All calls must have a FROM and a TO so that jurisdiction can be assessed.    Telecom billing systems require this, because of the requirements for taxing and rating that jurisdiction affects.

Jurisdiction affects taxes and rates for calls.  My next installment will dig deeper in to telecom billing and discuss some of its other nuances.