New possibilities

Flat-rate is no longer the only option as network management technology changes the telecom billing equation

Network management technology is emerging as a competitive weapon, and as it does, billing is becoming a new area for differentiation. Detailed billing information is becoming the basis for flexible, competitive call plans that have service provider customers demanding more than just traditional flat-rate approaches.

Applications such as Internet/800 caller ID, global roaming via credit card usage, integrated messaging, integrated asynchronous transfer mode access and frame relay high bit-rate digital subscriber line integration are a few examples of services that different carriers want to introduce for revenue generation and differentiation. Because such services require the convergence of voice, video and data networks, service providers face the challenge of introducing billing plans that will meet the requirements of these new environments. Network management tools will help meet this challenge by allowing them to create unique billing offerings.

Network management applications can be used by service providers to differentiate themselves by creating billing plans that align with enterprise business practices. Enterprises are using networks in more flexible and demanding ways, and they expect billing to match their use.

Attractive billing plans for these customers include those not only based on flat rates but also augmented with billing plans in which charges are based on duration of calls or total bandwidth used.

Customers must be able to pay only for the service they actually use and to see the various types of services they have been consuming. To meet changing demands, service providers must be able to bill customers based on service types, actual service consumed and distance in addition to today's flat rates.

New options A host of potential new billing plans can be created to help service providers sell new services to their users.

Flat-rate billing is the most common form of network billing today. For example, the flat rate for a frame relay circuit is calculated based on committed information rate and distance, resulting in a constant monthly figure. A 56 kb/s frame relay circuit from Boston to Washington, for instance, is always the same charge per month. Some customers like this approach because what they spend on the circuit does not vary on a monthly basis.

Bandwidth-based billing is coming. This type of billing would allow customers to be billed based on total bandwidth consumed during the time period (week or month), resulting in a bill for exact amounts of bandwidth (58.5 or 34.2 kb/s, for example, vs. the 56 kb/s flat rate). Customers pay only for the amount of network consumed. Frame relay and ATM permanent virtual circuits (PVCs) and switched virtual circuits (SVCs) can be billed this way (Figure 1).

Duration-based billing may be the optimum billing form for customers and their service providers that can support SVCs. With this type of billing, a data bill more closely resembles a telephone bill in that it lists the calls made from point A to point B, the duration of the calls, the amount charged and the charge per minute. This billing and networking technology is especially attractive for small offices that cannot afford PVC dedicated lines.

Service providers can offer these billing methods separately or in any combination. They can mix and match methods to suit the different segments of a customer's business.

Flexible accounting Network management-based accounting applications can collect detailed call information on network traffic. Working with the software on intelligent switches, data traffic passing through the network is measured on a per-call basis.

By providing a new level of information about traffic delivery and flow made on networks, these network management accounting applications enable service providers to offer their customers competitive new data plans, precise performance information and enhanced services.

The accounting applications also correlate all network traffic and resolve the data flows into specific call or circuit records. The data is then formatted into standard records and forwarded to a service provider's existing accounting system. These applications can feed systems so that they can generate invoices or performance reports.

The most effective of these applications is based on architectures that allow multiple copies of the application to be distributed throughout the network so that service providers can distribute billing operations.

By automating functions, new accounting applications can ease the handling of data collection and billing, as well as the deployment of new billing services. Once configured, these applications automatically work with existing software applications and support either network usage or time-based account billing. In addition, these applications can minimize the effect that accounting has on the network as a whole by measuring cell counts for each call at the ingress point only. That keeps records at a per-switch, per-port or per-circuit level, depending upon billing requirements, and correlates multiple records pertaining to the same call.

The most sophisticated applications also gather network traffic not only for call duration or throughput, but also based on quality of service. QOS billing lets users see how much they are paying for voice, systems network architecture and local area network, among other services, rather than how much they paid overall. Service providers benefit by being able to create services with different QOS classes and charge different dollar amounts for those services. For example, a constant bit-rate service that delivers a higher degree of availability can be charged at a higher rate than unspecified bit-rate best-effort services.

The ability to provide differentiated billing services is a critical success factor for service providers. In moving from flat-rate to flexible-call plans, service providers are realizing that their network management tools are crucial elements of their strategy to maintain a competitive edge.