Posted: 05/1998

Just for CICs
Switchless Resellers Join the PSTN Crowd

By Ken Branson

Just as the U.S. Postal Service uses names, addresses and ZIP codes to identify and
sort mail, the public switched telecommunications network (PSTN) uses carrier
identification codes (CICs) to sort out telecommunications traffic.

"CICs are used to ‘mark’ the carrier of traffic, so (local phone companies) know
to whom they should bill a call," says Ron Conners, director of the North American
Numbering Plan (NANP) at Lockheed Martin Information Management Systems in Washington.
"The other, obvious use is to select a (long distance) carrier."

Lockheed Martin IMS has administered the NANP since Jan. 19, when it took over that job
from Bellcore. The part of that job most familiar to the general public is the
administration of area codes, which help route calls by geography. But for long distance
companies, including switchless resellers, CICs are at least as relevant.

Of course, most switchless resellers don’t have CICs. Their arrangement with wholesale
long distance companies allows them to leave network management problems to their
wholesalers. The reseller deals with the customer. The wholesaler collects from the
reseller for allowing the reseller’s traffic to ride over its network. The customer gets
the job done and pays the reseller. The network routes the call based on the wholesaler’s
CIC.

However, some resellers are discovering that a CIC has its uses, even for a purely
switchless reseller. A reseller who obtains a CIC for this purpose is said to have a
"subCIC." Such a reseller can reach new customers outside its traditional
territory, and relate to those customers as if it–not the wholesaler–owned the network.

Eastern Telecommunications Services, based in Ridgefield, Ohio, has its own CIC, a
subCIC to that of its wholesaler, Frontier Corp. of Rochester, N.Y.

"Through Frontier, I can load my CIC onto the feature groups in most of the
country, at least in Bell company territory," says Robert Mocas, Easton’s president.
"In other places, I can ride on Frontier’s CIC."

Bill Capraro, president of CIMCO, a reseller in suburban Chicago, cites another
advantage to having his own CIC.

"We get billed directly for access by the local telephone company," he says.
"And with access reform, the access charges are coming down, and I can afford to have
a CIC."

Capraro, whose company operates mainly in the Midwest, says it costs CIMCO about
$15,000 to get its CIC loaded in a city. The value, for him, lies in the practical
benefits of being considered a real carrier by his local phone company.

"If you’re a purely switchless reseller, and you’re not the carrier but somebody
else is, and you have a problem, you’re just traffic (to the local phone company),"
he says. "But if you have a CIC, you are the carrier. That means we’ve been able to
interface with the carrier group at Ameritech (Corp.)."

In addition, Capraro says, if a switchless reseller wants to change long distance
companies, and doesn’t have its own CIC, it must "PIC (primary interexchange carrier)
every line, one by one."

However, Capraro concedes that subCICs may not be useful for every reseller in every
situation.

"You have to load that subCIC into every central office in the area you want to
serve," he says. "In Chicago, there are, what? Two hundred fifty central
offices?"

At least one option for a switchless reseller is to become switched. Network Plus Inc.,
Quincy, Mass., took that road.

"There are some factors to weigh," says Rob Hale, Network Plus’ president.
"Will you save money in this partnership (with a wholesale long distance company)? In
other words, will the wholesaler cut you a carrier access deal that’s cheaper because
you’re bringing in more traffic? Then, can you manage this business? There are
complexities that you wouldn’t have otherwise. Without a CIC, you just hand off to
AT&T Corp., or Sprint Communications Co., or some other long distance company, and you
won’t have the network management component. But if you have a CIC and a feature group (in
each market where the CIC is loaded), it’s your job to make sure you have capacity. You’ll
have 24 circuits. With that 25th call, you’ll start giving out busy signals."

Capraro claims to enjoy a good relationship with Ameritech, his local exchange carrier
(LEC). But sometimes a reseller’s relationship with its LEC can be frustrating. Easton’s
Mocas calls it, "The black art of local telephony."

"There are a number of processes that have to take place between the physical
writing of the ASR (access service request) and its actual implementation," Mocas
says. "The (wholesale) long distance company has to write the ASR to the local
exchange company. That’s who controls this. The feature group is their facility, the
translations lie within their systems, and they’re the ones who attach a CIC to an
end-user’s line."

Mocas sees nothing sinister in all this, but explains that complex processes involving
lots of people and systems offer opportunities for error. "Installing a CIC
nationwide, or in a big area…well, people make mistakes," he says.

Capraro says his long distance wholesaler, Frontier, encouraged him to apply for a CIC,
but other wholesalers say they neither encourage nor discourage their switchless customers
from getting one.

While some long distance wholesalers may encourage resellers to widen their marketing
footprint by getting CICs, many provide the service without proactive encouragement to get
traffic across its network.

"We allow resellers to do that (to obtain CICs and use the wholesaler’s network),
but we don’t force them to," says Steven Jacobson, senior manager of market support
for WorldCom Network Services. "It’s a product we offer, just like any other."

Aside from bringing traffic to the wholesaler’s network, Jacobson points out, there are
other advantages to long distance wholesalers when their reseller customers get CICs and
raise their own flags before the public.

"Any PIC disputes will show up under the CIC owner’s name, not the carrier’s
name," he says. "If I’ve got a reseller (without a CIC) who has a problem with
slamming, all those disputes will show up initially under the WorldCom CIC. It’s a problem
I’d rather not have."

Sprint–an incumbent LEC and a long distance company–takes a similar approach to its
reseller customers, neither encouraging nor discouraging them from obtaining CICs. Deb
Keating, Sprint’s director of product development for wholesale services, echoes Rob
Hale’s warning about looking before leaping. She adds that the initial cost of loading a
CIC into central offices across the United States can be expensive–between $500,000 and
$1 million.

"There are some products the LECs are beginning to offer that add clarity and
crispness to the way calls are billed," Keating says. "So many resellers believe
it would be useful to have CICs."

The Federal Communications Commission (FCC) limits the number of CICs per carrier to
two, but there are a number of ways around this restriction. For example, companies that
acquire other companies may use their CICs.

WorldCom’s Jacobson happily concedes that his company has acquired considerably more
than two CICs along the way.

"We have a bunch," he says. "If the FCC ever tried to mandate a specific
number, we’d probably have more than the mandated number."

Jacobson explains that the CICs picked up with corporate acquisitions are supporting
traffic. To give them back and shift them to other CICs would be costly and complex, he
says.

"We certainly weren’t happy with the FCC’s suggestion that merged and acquired
companies get down to six CICs," Jacobson says. "We thought reducing the number
of CICs to any fixed number was burdensome."

The FCC also has mandated the expansion of the CIC’s length from three digits to four.
The change is in process now, and is due for completion June 30. At least one reseller has
formally protested the change in the courts.