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Module 5: Telecommunications Issues and 511 Business Models

Overview. The Telecommunications IndustryStructure and Implications for 511LandlineWirelessIssuesWireless Carrier Concerns Regarding 511Call Routing and its Implications for 511Working with Carriers and PUCs: Issues and Examples511 Business Models and Costs. Industry Structure: Landline. Lo

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Module 5: Telecommunications Issues and 511 Business Models

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    2. Overview The Telecommunications Industry Structure and Implications for 511 Landline Wireless Issues Wireless Carrier Concerns Regarding 511 Call Routing and its Implications for 511 Working with Carriers and PUCs: Issues and Examples 511 Business Models and Costs This session will specifically highlight: The use and history of other 3-digit phone services that offer lessons that could be applied to 511 services Transportation services in existence today that offer information to the public via the telephone.This session will specifically highlight: The use and history of other 3-digit phone services that offer lessons that could be applied to 511 services Transportation services in existence today that offer information to the public via the telephone.

    3. Industry Structure: Landline Local Exchange Carriers (LECs) Within “local access and transport area” (LATA) Incumbent Local Exchange Carriers (ILECs) Original “Baby Bells” and smaller regional companies Competitive Local Exchange Carriers (CLECs) Resell ILECs’ capacity or build own facilities Long Distance/Interexchange Carriers (IXCs) Interstate and inter-LATA services within a state Pay Phone Carriers 75% operated by ILECs

    4. Landline Carriers View of 511 Minor issue when compared to other “problems” and “opportunities” ILECs desire a consistent 511 approach across their service areas Larger number of LECs require 511 deployers to work with more carriers Landline carriers are more receptive to implementing 511 code since FCC assignment. Many see the need to create a tariff where one is not already in place. At least one major carrier is taking 511 implementation on an ICB (Individual Case Basis) with regard to charges to the DOTs for programming of switches. Some carriers are choosing to try to charge for 511 on a per-call basis. This is not being well received where attempted.Landline carriers are more receptive to implementing 511 code since FCC assignment. Many see the need to create a tariff where one is not already in place. At least one major carrier is taking 511 implementation on an ICB (Individual Case Basis) with regard to charges to the DOTs for programming of switches. Some carriers are choosing to try to charge for 511 on a per-call basis. This is not being well received where attempted.

    5. Industry Structure - Wireless Market Segments National Regional Small/Rural Top six carriers Nationwide footprint Serve ~80 million, or 72% of the market All major carriers offer “roaming agreements” with other carriers in areas where they do not have infrastructure. This allows for a caller to roam to another area and still use their phone, as long as there is a carrier that provides service on the frequencies that their phone is capable of using. Callers do not know who the roaming agreements are with, just that their phones still work. All major carriers offer “roaming agreements” with other carriers in areas where they do not have infrastructure. This allows for a caller to roam to another area and still use their phone, as long as there is a carrier that provides service on the frequencies that their phone is capable of using. Callers do not know who the roaming agreements are with, just that their phones still work.

    6. Wireless Industry Implications for 511 (1) Traveler information services already provided by six national carriers as value-added services As wireless devices become Internet accessible, value-added services will tend to be location-based and customizable Traffic services in place (*JAM from Verizon, #ROAD from AT&T, and others), are only available in specific markets. Some carriers see location based services as an untapped market that will open up once E-911 enhancements are in place. Others are already working on their own location based services.Traffic services in place (*JAM from Verizon, #ROAD from AT&T, and others), are only available in specific markets. Some carriers see location based services as an untapped market that will open up once E-911 enhancements are in place. Others are already working on their own location based services.

    7. Wireless Industry Implications for 511 (2) Wireless carriers will want a consistent implementation and cost-recovery model for 511 services as their geographic presence grows A consistent DOT interconnection and cost recovery model will help expedite 511 calls to the wireless carrier Carriers are very much in favor of a consistent model for 511 services. This will also help greatly on regional and national advertising models.Carriers are very much in favor of a consistent model for 511 services. This will also help greatly on regional and national advertising models.

    8. Industry Issues - Wireless Carrier Concerns Regarding 511 Call Routing How many translations per state or region? Will the customer be charged anything? Will the carrier incur additional charges? Competition Will this service compete with any current/future offerings? How may the carrier benefit from offering 511 (i.e. as a service differentiator)? Costs for implementation, whether to the carriers or charged back to the DOT are a major issue. Programming costs are determined by, amongst other things, the way the carrier has deployed their network: If the carrier has only 2-3 “switches” per state, then geographic programming of more than one translation becomes more cumbersome If the carrier is asked to program only one translation per state, costs are significantly lower. There will be an issue with state-line service, as caller’s phones will look for the strongest signal, which might be coming from a cell site on the other side of a state line.Costs for implementation, whether to the carriers or charged back to the DOT are a major issue. Programming costs are determined by, amongst other things, the way the carrier has deployed their network: If the carrier has only 2-3 “switches” per state, then geographic programming of more than one translation becomes more cumbersome If the carrier is asked to program only one translation per state, costs are significantly lower. There will be an issue with state-line service, as caller’s phones will look for the strongest signal, which might be coming from a cell site on the other side of a state line.

    9. Routing a 511 Call: Implications Optimally, landline calls will translate to a local number where available and to a toll-free number where local access is not available. Inbound calls will be terminated into the same system for both translations. Similarly, wireless calls will translate to a local number where available and to a toll-free number where local access is not available. The wider local calling area inherent in wireless calls will allow more calls to be handled as local calls, thus reducing the costs to the toll-free number owner (the DOT).Optimally, landline calls will translate to a local number where available and to a toll-free number where local access is not available. Inbound calls will be terminated into the same system for both translations. Similarly, wireless calls will translate to a local number where available and to a toll-free number where local access is not available. The wider local calling area inherent in wireless calls will allow more calls to be handled as local calls, thus reducing the costs to the toll-free number owner (the DOT).

    10. Working With Carriers and Public Utility Commissions (1) Some landline carriers have tariffs on file for 511 Call for fees for translation programming Some by Central Office, calling area, other designation Others are implementing 511 on case-by-case basis 511 deployers should try to use precedent of other deployers As noted previously, there are some carriers that are attempting to charge for 511 on a per-call basis.As noted previously, there are some carriers that are attempting to charge for 511 on a per-call basis.

    11. Working With Carriers and Public Utility Commissions (2) Call routing may be an issue with landline and wireless carriers Who pays for carriage? Wireless – Does a 511 call count as airtime minutes? Landline – If a local call, does user pay? If a toll-free call, who pays for programming? Is there any per-translation fee? If using a toll-free backbone, is there additional per-translation fee? Other methods for carrying calls (T-1, reverse charge). There are a number of scenarios for carrying calls translated from 511. The goal is for the caller to pay no more than the cost of a local call. The obvious solution would be to use a toll-free backbone, however there are inherent costs with toll-free numbers that can make this cost prohibitive for some DOTs. Public Utilities Commissions and Public Service Commissions are helpful or at least supportive of the FCC assignment and in local DOTs requests for assignment and cost limiting.There are a number of scenarios for carrying calls translated from 511. The goal is for the caller to pay no more than the cost of a local call. The obvious solution would be to use a toll-free backbone, however there are inherent costs with toll-free numbers that can make this cost prohibitive for some DOTs. Public Utilities Commissions and Public Service Commissions are helpful or at least supportive of the FCC assignment and in local DOTs requests for assignment and cost limiting.

    12. Working With Carriers and PUCs- Some Examples (1) Kentucky Requested and received assistance from PUC early in process PUC took a leading role Seems to be the exception to the rule Kentucky’s example is more the exception than the rule, as the Kentucky Transportation Cabinet has been working with the PUC for a number of years on this issue (since 1995).Kentucky’s example is more the exception than the rule, as the Kentucky Transportation Cabinet has been working with the PUC for a number of years on this issue (since 1995).

    13. Working With Carriers and PUCs- Some Examples (2) Utah - PUC Supportive, but needed to be educated Came to life when carrier filed for tariff with recurring per-call charges North Carolina - PSC Supportive, asked the DOT to meet with telecomm industry first Wanted to make sure the industry was coordinated in implementation goals This seems more like the common scenario, where the PUC will support but not direct the DOTs requests for implementation and fair pricing.This seems more like the common scenario, where the PUC will support but not direct the DOTs requests for implementation and fair pricing.

    14. Working With Carriers and PUCs- Some Examples (3) Florida No legislative jurisdiction PUC supportive, asked FDOT to take the lead Will stand behind FCC decision, and advise carriers as such if asked Florida’s PUC also falls into the supportive model, but will not direct the ILECs with regard to pricing and implementation.Florida’s PUC also falls into the supportive model, but will not direct the ILECs with regard to pricing and implementation.

    15. 511 Business Models and Costs Considerations Published and Being Updated Switching gears, we will focus a few minutes on the recently released business models and costs considerations report. Todd Kell of Virginia DOT, who led the effort in the Working Group to develop this report, will give a more detailed presentation in Session 3A tomorrow. What follows are some of the conclusions from the report and some of the next steps identified for further study.Switching gears, we will focus a few minutes on the recently released business models and costs considerations report. Todd Kell of Virginia DOT, who led the effort in the Working Group to develop this report, will give a more detailed presentation in Session 3A tomorrow. What follows are some of the conclusions from the report and some of the next steps identified for further study.

    16. 511 Business Models and Costs -- Report Summary (1) Followed a simple principle - “a basic 511 service should be available to the end user at no more than the cost of a local call” Identified key players Described the “anatomy” of a 511 call Addressed various business models First, the report was developed under the basic premise established by the Policy Committee at its initial retreat in March 2001, that the basic 511 service is essentially free to callers – except for any local calling charges they might incur. This means that the business model or cost recovery method would need to generate revenue through other means. The report identifies key public and private sector players in determining business models and costs. The report also deconstructs a 511 call to illustrate and quantify the cost elements and magnitudes associated with 511 services. The report also identified several possible methods of delivering and funding 511.First, the report was developed under the basic premise established by the Policy Committee at its initial retreat in March 2001, that the basic 511 service is essentially free to callers – except for any local calling charges they might incur. This means that the business model or cost recovery method would need to generate revenue through other means. The report identifies key public and private sector players in determining business models and costs. The report also deconstructs a 511 call to illustrate and quantify the cost elements and magnitudes associated with 511 services. The report also identified several possible methods of delivering and funding 511.

    17. 511 Business Models and Costs -- Report Summary (2) Identified costs to deploy 511 Implementation hierarchy (5 Stages) Cost elements (of a 511 call) Call volumes Determined that all business models will require some level of public sector funding Provided some resources useful for additional business analysis The report establishes a multi-tier hierarchy of costs, to aid implementers in determining the cost elements that may apply to them – as not all implementers are starting from the same foundation. The report also provides some estimates of call volumes and the costs associated with such volumes. Key findings in the report are that it is unlikely, given the information presently available, that a sustaining 511 business model exists that does not require some level of public sector funding for the service. In other words, public sector funding will be needed at some level for some time into the future to sustain 511 services. The report is well footnoted and identifies additional resources for readers to investigate.The report establishes a multi-tier hierarchy of costs, to aid implementers in determining the cost elements that may apply to them – as not all implementers are starting from the same foundation. The report also provides some estimates of call volumes and the costs associated with such volumes. Key findings in the report are that it is unlikely, given the information presently available, that a sustaining 511 business model exists that does not require some level of public sector funding for the service. In other words, public sector funding will be needed at some level for some time into the future to sustain 511 services. The report is well footnoted and identifies additional resources for readers to investigate.

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