Saving Money on Network Costs

In a similar fashion to airlines, and hotels, carriers and Internet service providers are tacking on more fees, which are consuming increasingly higher percentages of bills. Decreasing revenue for long distance, and Internet access have spurred carriers to add fees that they list at the end of bills along with taxes.

Up until a few years ago, customers saved money on long distance by selecting carriers with the lowest cost per minute and T-1 or T-3 rates. This strategy is no longer adequate. Organizations that are vigilant about checking accuracy of fees on data and voice bills, analyzing capacity on broadband Internet access, and bill accuracy to avoid waste can often save money monthly.

Internet Access
Requirements for additional Internet access are skyrocketing, spurred by growth in video on internal networks, employees’ remote access to files and email, and customers’ connections to online information, such as schools’ calendars, lunch menus, course content, and, product updates. In addition, organizations are increasingly using video and multi-media applications.

How can institutions manage Internet access requirements?
Organizations that monitor traffic levels on Internet connections can ensure that their networks are not overbuilt, but have inadequate capacity during traffic peaks. Most carriers, if requested, provide traffic reports indicating percentage of utilization in peak and average periods. These statistics should be checked to ensure that new capacity is in fact needed, and to understand how often circuits are at capacity.

What about voice and fax lines?
Traffic on voice trunks, while perhaps not growing, should be monitored. No traffic may indicate a repair problem or excess capacity

The most efficient way to design voice networks is to put all voice calls on one large group of trunks. Rather than for example, separate groups of trunks for incoming, and outgoing traffic, or particular departments. This is because one large group of trunks can carry more traffic than an equal number dispersed among multiple groups

Telephone numbers billed individually should be checked to make sure they’re in service. If there’s a doubt, equipment vendors can trace them to their location to determine if the lines are in fact working. It often makes sense to check with groups using these lines to verify that they’re still needed.

Add on fees, disguised as taxes
Organizations evaluating a new carrier should request a list of all fees. Some fees on bills are government taxes passed on by carriers to customers. Others are carriers’ attempts to offset lower margins due to lower costs per minute, and competition. Examples of fees passed on as government charges are: Property Tax Surcharge, Cost Recovery Fees, and FCC Common Carrier Regulatory Fee.

Universal Service Fees
The Universal Service Fee on voice and cellular telephone bills is used to subsidize telephone service for rural areas, income eligible subscribers, rural health care facilities, and schools and libraries. It is based on the percentage of revenue each carrier derives from long distance voice revenues.

USF Errors
Although, the FCC has mandated that carriers access USF fees on voice services only, I’ve run into carriers who charge these 12% of cost fees on data lines. Customers who object to these USF charge can protest with their provider. If the carrier refuses to issue a credit and remove the USF fee from bills, organizations can file a complaint by filling out a form on the FCC’s Web site.

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