In the old days of making calls with a telephone (remember, just last year), you paid for a phone line. Your company may have had one network to handle dozens or even hundreds of phone lines coming into your business and another network to handle computers. Now companies can converge both networks into one. By using VoIP over a private data network, your com- pany can bypass the older, more expensive way of using the public circuit- switched network.
Although some local telephone lines may be necessary, you can reduce or eliminate the cost of your older telephony infrastructure, the total volume of call minutes per month, line-related regulatory fees and taxes, and therefore most if not all of your total phone bill. When was the last time your phone bill was less than you thought it would be?
This chapter describes the bottom-line savings of using VoIP. You see how traditional calling methods hit you with charges for everything under the sun and how calling with VoIP can change this for the better. Along the way, I explain the terminology used by traditional phone companies. By chapter’s end, you’ll know about all the charges billed by traditional phone companies — as well as which of those charges your conversion to VoIP can eliminate or drastically reduce.
Accessing the Network
All phone costs start with leasing some sort of access line or set of access lines from the local exchange carrier (affectionately called LEC, which rhymes with “heck”). For the line itself, you pay a monthly access fee that varies depending on the type of line you lease. For most consumers, the line is a POTS line that permits them to place and receive telephone calls on the PSTN. Local line access costs the typical residential customer an average of about $25 per month, not counting recurring per-minute usage charges, toll charges, regulated fees, and taxes.
For businesses, regular POTS line access costs two to five times what a resi- dential customer pays. If you run a small business, you might lease a group of lines and accept, as consumers meekly do, the telephone numbers assigned and provided by the LEC. A larger company with an in-house telephone system might lease different types of access lines. Some may be POTS lines that support two-way access, permitting callers to place and receive calls. Other types of access lines may be used depending on the size and type of company.
You may hear the term two-way used to refer to POTS lines that can be used to both make and receive calls from the PSTN.
Never one to make things simple, your LEC has a different monthly access cost for each type of line. In addition, if your company has its own telephone system, you pay a one-time fee to buy a bulk list of usable telephone numbers that you assign to your employees. As employees come and go, your com- pany can reassign those telephone numbers accordingly.
Some companies lease higher bandwidth access lines, which are much more expensive. These lines combine bandwidth and provide what are known as POTS line equivalencies. In this way, companies can reduce the total number of physical POTS lines needed and therefore reduce their monthly line-access costs. But to be able to do this, the companies must have their own in-house telephone system, which introduces another cost to the mix.
After you establish access, you can make and receive calls to and from the PSTN. That’s when recurring usage charges kick in. (Just when you thought you were safe!) Usage charges for consumers are based on two factors:
Total length of the call in minutes
Calling service category
Timing the call to calculate your usage charges is pretty simple: Multiply the total time in minutes by the rate per minute. Although this is considered simple math, few people time their calls. This is especially the case when the calls originate at work because we all think “it is a business call and the com- pany pays for it.”
The other factor, the calling service category, presents a more complex chal- lenge because few people know or care to know the differences among calling service categories. There are five such categories, four of which relate directly to your toll usage charges each month. A description of each is coming up next.
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