Posted: 1/2002

Wholesale Channel

OSS Advances Preserve Promise of
UNE-P

By Fred Dawson

Regional Bell Operating Company
(RBOC) executives who view the unbundled network element platform (UNE-P) as a failed model for competition may soon find it’s harder to make their case. This, in part, is thanks to better
UNE-P operational efficiencies and a new generation of software that could bring much-needed automation to the billing and data reconciliation processes.

It’s generally agreed that administering UNE-P, from the supplier or customer end, is a headache. But, it would be less a headache if the manual labor involved in keeping tabs on billing data could be reduced. UNE-P has begun to play a big role in sustaining hopes for a competitive marketplace.

“The companies I’m talking to are moving more and more toward a comfort level with operating in the UNE-P space,” says Randy Browning, a partner in Pricewaterhouse-Coopers LLC who leads the firm’s business advisory services for technology, information commerce and entertainment.

While times are tough in general for telecom players, mid-size CLECs with a focus on developing key markets rather than building out huge footprints “are still very well positioned for surviving,” he says. “UNE-P is going to be a significant part of that.”

The trend is evident at BellSouth, which has put a lot of effort into tailoring its legacy OSS to fit the unbundled element model, says Susan O’Bryan, a senior director in the carrier’s billing organization. At the start of 2001, the company was registering about 130 million messages per month in the process of tabulating and billing for unbundled-element usage across its operating regions, O’Bryan says. As of October, the volume was close to 300 million.

“Clearly, we see a lot of carriers converting from resale to unbundled elements,” she says. The sheer volume of usage tends to keep the administrative burden at a high level even as her group makes progress in efforts to improve the efficiency and accuracy of the billing process, O’Bryan adds.

This is why most RBOC leaders see UNE-P more as a failure than a success, Browning says. “As unbundled-element usage intensifies, the ILECs have to invest in new systems and have to learn to deal with a whole new set of customers. It consumes a lot of their time and resources.”

Judging from recent comments by the heads of Qwest Communications International Inc., Verizon Communications Inc. and SBC Communications Inc. these RBOCs seem intent on building a case in Washington that the Telecommunications Act of 1996 has failed because it favored nonfacilities-based over facilities-based competition.

Says Qwest CEO Joseph Nacchio: “Micromanage every UNE element, and nobody puts capital in the ground.”

SBC chief Edward Whitacre Jr. characterizes UNE regulations as “a drain on resources and people.”

And Verizon co-CEO Ivan Seidenberg asserts, “Instead of focusing on the mindless approach with UNE-Ps and everything else, what regulators should do is focus on real facilities-based competition in the business space. We would welcome another company with our scale and size competing in our market.”

One might assume the RBOCs were digging in their heels to make matters harder for competitors that use UNE-P. This would seem to be true in Pennsylvania where

having a complete OSS in place for administering unbundled elements hasn’t stood in the way of obtaining state support for an RBOC’s entry into long distance. But, judging from reports from the field, the RBOC people in the trenches are bending over backwards to make things smoother in the UNE-P environment.

Verizon has been the most cooperative of all four RBOCs in addressing the complexities of UNE-P administration in the experience of UNE-P-based service provider Z-Tel Technologies Inc, says Don Burkhardt, Z-Tel’s vice president of network administration.

“Things were rough at the beginning, just like with all the RBOCs, but people at Verizon have been very open and cooperative, even to the point of soliciting our help in validating the accuracy of their data,” he says.

Verizon officials declined to discuss UNE-P billing issues in detail. However, through spokesman Mark Marchand, the view was conveyed that OSS in the UNE environment “is something that’s in a constant state of improvement.”

In general, Verizon believes wholesale customers “are telling us our billing is fairly accurate,” Marchand says. The company readily credits customers when mistakes are discovered and always is pressing vendors “to do better.”

Burkhardt says UNE-P administration has improved overall. SBC’s Ameritech, for example, has become the first Bell company to base its usage metering on individual telephone numbers rather than on end offices. This provides a level of accounting detail that makes it easier for CLECs to compare their records with those of their suppliers.

“It would be absolutely helpful if other RBOCs moved to TN usage reporting,” Burkhardt says. “It allows for a more thorough validation of our costs and helps us with our own revenue assurance.”

With more entities flocking to UNE-P and with carriers getting better at fulfilling customer orders for new services as well as keeping track of element usage, this industry sector appears ready to move to a new level of efficiency.

This new-found efficiency could go a long way toward diluting the RBOCs’ claims that UNE-P is more bother than it’s worth. These improving prospects reside in new software programs designed to take a lot of the manual labor and guesswork out of the billing and revenue assurance processes.

One such program is already in use through the consulting services supplied by Pricewaterhouse.

“We’ve been using a tool for billing and revenue reconciliation associated with

UNE-P for the past year or so,” Browning says. “For example, one application involves obtaining the UNE records from the ILEC and doing a reconciliation with how usage is being billed in the CLEC’s system.”

Billing inaccuracies are as likely to be the result of flaws in how the CLEC sets up service provisioning in its own billing system as they are to be the consequence of poor record keeping by the ILEC, Browning adds.

As for how the ILECs handle these complex tasks, “some do a better job than others,” he says. But, he notes, they’re all trying to play ball and, more often than not, they’re receptive to challenges posed by reconciliation discrepancies as important steps on the learning curve.

Pricewaterhouse often leaves its UNE billing reconciliation software tools with its customers, once they’ve learned how

to use them, but it isn’t in the business of selling the tools as product per se, Browning says.

Other software systems developers are in the market with new products that aim to make life easier for suppliers and customers in the UNE-P space.

One example is a new software system from a newcomer to telecom OSS. Lavastorm Telecom’s product is being tested by a handful of CLECs as a UNE-P billing reconciliation and a revenue assurance tool.

“This is software that automates the billing validation and payment process for UNE-P services from the ILECs and has the capability to reconcile usage data from the UNE-P side with specific retail customers,” says Tom Nolting, vice president of product management at Lavastorm. “One of our customers tells us that after using our software they found they had been losing 10 to 20 percent of their potential revenue as a result of not billing properly for customer usage.”

It isn’t so much the possibility of saving money by uncovering improper billing by ILECs for unbundled element usage that makes such software attractive, notes Burkhardt, who says Z-Tel, after more than two years experience with UNE-P, has gained enough understanding of the accounting process to be in a position to evaluate and deploy new software solutions.

“Right now cost validation is a fairly minor part of what we gain,” Burkhardt says. “Automation can lead to gains in efficiency which frees up time for our staff to perform other essential tasks and allows us to expand our operations more effectively. The other important benefit is revenue assurance. There are some pretty substantial gains to be had there.”

Z-Tel, with operations in 35 states, is looking at a number of software solutions, Burkhardt says. The company and others like it — dependent on a smooth-functioning UNE-P environment — appear to be in a good position to make the model work better than ever.