The carriers

Long-distance carriers are not all alike. Some are small, specialized carriers, while others such as WorldCom are giant carriers offering a wide variety of services. The following sections explain the types of carrier that typically offer long-distance service.

Supercarriers
AT&T, Sprint, WorldCom, and Qwest all brag that they can be a “one-stop shop” and provide all the telecom services a business customer needs. Some people in the industry call these supercarriers, because they can offer not only long-distance service but also local service, data service, and wireless service. The main advantages of supercarriers are that customers can receive one consolidated bill, and the carrier might offer some services at cost. For example, Qwest may give rock-bottom pager pricing in hopes of also securing a customer’s data and long-distance business.

Regional carriers
In certain regions, a single independent long-distance carrier may earn a large share of the market. Through referral marketing, these long-distance carriers build a loyal following in their region. Later, they hope to break into the national scene. Two regional carriers that have successfully competed in the national marketplace are Frontier and McLeod USA. Regional carriers usually have low rates and are very attentive to their customers, but they struggle to manage large accounts with multiple locations.

Resellers
Supercarriers are eager to win as much market share as possible, so they allow their services to be resold by other companies. With a reseller such as Network Plus, a customer uses AT&T’s network but receives a phone bill from Network Plus. During the 1990s, resellers’ rates were very low so many customers switched to resellers. However, resellers are limited in the range of services they can offer, and they are not very good at troubleshooting customer problems. This is because they do not control the physical network or the actual billing records, only the rebilling records.

Agents
Agents are like resellers in that they do not have their own physical network of lines. Unlike resellers, they do not pretend to be an actual phone company. Instead, they are simply sales agents for long-distance carriers. Telecom technicians sometimes become agents for long-distance carriers. They are highly trusted by their customers and can earn extra commissions by selling long distance.

Most agents work alone or in a small firm. They represent numerous long-distance carriers and can usually offer the lowest rates in the industry. During a sales presentation, an agent may present proposals from two or three carriers. They are generally more loyal to their customers than to the carriers they represent. Agents usually give better customer service than the actual carriers, but an agent’s recommended carrier may not always be the best carrier for the customer. Agents are likely to recommend the carrier that pays the greatest commission, which may or may not be the best carrier for the customer.

Consultants
Most agents say they are consultants, but consultants never say they are agents. Consultants are independent of carriers and receive compensation only from their clients. Agents are paid by the telephone companies they represent.

Consultants are usually people who have worked for the carriers for many years. Because of their experience, they have become experts in their specific field. The two most prevalent types of consultants are cost management experts and technical experts. Unlike agents, consultants always make unbiased recommendations to their clients.

Shifting local calls to an alternate carrier

In some markets, the local provider does not offer low rates for local calls. A business in this situation may be able to cut its costs by switching to an alternate carrier for its local calls. Changing your local calling provider is not as simple as changing your long-distance provider, but it may be worthwhile if you can save enough money.

Using the long-distance carrier’s T-1 for local calls
Local calls are normally carried across LEC trunks to the central office and then the call is connected to its destination (see Picture 1). But if you have dedicated service through your long-distance provider, you can easily switch your local calls to your long-distance provider from your local carrier. Dedicated service means you have a T-1 connection from your facility directly to the long-distance carrier’s central office (see Picture 2). The outbound local calls can be rerouted away from the local provider by reprogramming the PBX to handle local calls as long-distance calls. Incoming local calls will still use the local carrier’s trunk lines.


Local calls originate at the customer’s premise and travel across local telephone company trunks.


Local calls originate at the customer’s premise and travel across the T-1 connection

In a typical example, the PBX sends these local calls to AT&T instead of the incumbent local provider, such as Pacific Bell. AT&T has been calling this service Digitalink. By reducing the cost of their local calls from $0.02 per minute to $0.01 per minute, I have seen many Digitalink customers save more than $500 each month.

CLECs
The second way to move your local calls away from your current provider is to switch carriers altogether. The new CLECs would be more than happy to have your business. A business with a significant amount of expensive local calling whose local service is not complex is a good candidate to switch to one of the many new CLECs. Be careful that they do not also secure your long distance, however, unless you want them to.

OPX: The off-premise extension
A business with two locations in the same city is billed for local calls between the two facilities. If it has Centrex service, however, it can eliminate these charges. With Centrex, one location can be designated as an off-premise extension (OPX).

The OPX functions like an internal extension, and calls between the two facilities are handled like internal calls rather than local calls. Converting an off-site location to an OPX eliminates all local calling charges between the two locations.

Zone calls
In certain markets, customers are billed for zone calls, in addition to the local calls and the intralata calls. This is true for Ameritech’s Detroit, Michigan, customers. As Figure below reveals, the zone is a geographic area in-between the local area and intralata area.


Zone calls in Detroit, Michigan.
Zone calls are like local calls in that the phone bill gives no detail for these calls. Zone calls are like intralata calls, in that zone calling rates are much higher than local calling rates. But unlike local calls and intralata calls, the cost of zone calling is difficult to reduce. However, you can have your zone calling volume contribute toward a greater volume discount with your carrier.

Ameritech’s Value Link plan offers lower intralata rates based on a term and volume commitment. Although the zone calls are not directly reduced, at least the volume from these calls contributes to the overall Value Link volume commitment. The Value Link plan is being replaced by the newer Complete Link plan.