Better Cost Control Out-Sourced Cost Reduction Expertise Improve profits by controlling costs in areas where you never thought there were opportunities for savings

When you pay your telephone bill.  How do you verify that the taxes, fees and surcharges are correct?  Few people do.  But depending on the size of your bill, you could be paying more than you need to.

 Federal Taxes, Fees & Surcharges
At times, the local and long distance phone bill will contain surcharges or fees that are required by federal law, but are not a tax, which means the funds are not collected by the Federal government. On the other hand, the federal taxes applied to local and long distance telephone service are established by the U.S. Congress and are collected by the Internal Revenue Service as part of the general tax revenue for the U.S. Department of Treasury. Telephone companies do not keep the federal tax money that they collect, but forward the money to the Department of Treasury.

Number Portability Service Charge
Local Number Portability is required by federal law and, allows phone customers to keep their same phone number if they switch from one local telephone company to another. This charge covers the consolidation of the printed telephone directory, rather than having a directory for each local phone carrier, and directory information. Carriers recover the costs of providing this service through a fixed, monthly charge. Local telephone companies may continue to place this charge on their customers’ phone bills for five years from the date the companies first began itemizing this charge on their bills. This is not a tax or a charge by the government. For many providers, this fee costs 34¢ per month.

Charges for Network Access for Interstate Calling
Though this fee is regulated and capped by the Federal Communications Commission (FCC), it is not a tax or a fee charged by the government. It maintains the network for connecting customers to local switching via wires, poles and conduits. This money goes to the phone company, not to the government, and covers costs that are not already recovered by the local phone service monthly charge. The FCC caps the maximum price that a company may bill you for this. To ensure that all Americans can afford at least a minimal level of basic telephone service, the FCC will not allow phone companies to charge more than $6.50 for a single line.

Other names for this charge: “FCC Charge of Network Access,” “FCC-Approved Customer Line Charge,” “Interstate Access Charge,” “Federal Access Charge,” “Federal Line Cost Charge,” “Customer Line Charge,” “Interstate/Single Line Charge” or “Subscriber Line Charge.”

Universal Service Fee
Our nation has had a policy to promote telephone service to all Americans at affordable and reasonably comparable rates since 1930. The Universal Service Fee helps to make basic telephone services available to all Americans, including those with low incomes or those living in rural areas where service is very costly to provide. Universal Service support also helps provide discounted telecommunications, Internet access, and internal connections to schools and libraries and makes telecommunications rates for rural health care providers comparable to those in urban areas. All telecommunications companies providing service between states must contribute to the Universal Service Fund. Some of these telephone companies decide to pass their costs of contribution on to you in the form of a line item on your bill. Typical names for this charge: “Universal Connectivity Fee” or “Federal Universal Service Fee.” This fee is found on the long distance bill and is based on a percentage of total long distance charges, which can vary from carrier to carrier.

Federal Excise Tax
Taxed under the Internal Revenue Code and applied as a percentage of local and toll telephone service and teletypewriter exchange services. This is a 3% tax mandated by Congress. It is imposed on all telecommunications services and appears on local and long distance bills.

State and Local Taxes
To obtain information about the state and local taxes listed on your telephone bill, you should contact your local and state tax offices. These offices may be listed in the government section of your telephone directory. Additionally, your local or state consumer offices should be able to provide the address and telephone numbers of these offices.

California High Cost Fund (CHCF) Surcharges A and B
Levied by the CPUC under Public Utilities Code Section 739.3, these surcharges subsidize the basic rates for local telephone companies servicing rural areas and compensates carriers for providing basic residential service in areas where the cost exceeds the CPUC determined statewide average.

CHCF-A and CHCF-B are levied on local phone charges. The CHCF-B surcharge is also applied on the long distance bill. They are charged as percentages of your total bill. These percentages are set by the CPUC, and they are set every 3 months - which means they can change frequently. Click here for the latest figures set by the CPUC.

California Teleconnect Fund Surcharge (CTF)
Established by the CPUC, this surcharge provides discounts on telecommunications services to qualifying schools, libraries, community-based organizations, and county-owned hospital and health clinics. This surcharge is calculated as a percentage of local phone charges. This percentage is set by the CPUC, and can change. Click here for the latest figure set by the CPUC.

Universal Lifeline Telephone Service (ULTS) Surcharge
CPUC levied under the Public Utilities Code Section 872, this surcharge reimburses intrastate service providers for lost revenues and operating expenses associated with providing ULTS, the low-income local phone program described in Tab 1. The ULTS fee on the phone bill subsidizes these users for their reduced monthly phone rates and is charges at 1.450% of the local phone and long distance charges of all end-users.

Rate Surcharge
Customers receive a surcredit on their bill when Pacific Bell’s revenue exceeds CPUC-imposed price caps. This amount can vary from month to month.

State Regulatory Fee
This nominal fee is charged to all local phone customer to fund the CPUC in regulating utility companies such as local phone carriers.

California Relay Service (CRS) and Communications Devices Fund
In compliance with Public Utilities Code 2881 and Section 270, the Commission implemented three telecommunications programs for California residents who are deaf, hearing impaired and/or disabled. These three programs are collectively known as the Deaf and Disabled Telecommunications Program (DDTP), doing business as the California Telephone Access Program (CTAP). This fee is remitted to the Deaf & Disabled Program Trust Fund to reimburse intrastate service providers for lost revenues and operating expenses associated with providing relay services and communications devices (see Tab 1). This fee is charged as a percentage of local phone charges. This percentage is set by the CPUC, and can change. Click here for the latest figure set by the CPUC.

State 911 Tax
Provides funds to public agencies operating emergency 911 services. This charge helps pay for emergency services such as fire and rescue.

Local Tax
City-imposed utility users tax on telecommunications services. There is no such tax currently imposed by the City of San Diego (as of August 2003). Click here to see what taxes other cities may assess.

Emergency 911 Charge (E911)
Enhanced 911 - Wireless Services

This charge helps pay for emergency services such as fire and rescue. Local governments may impose this charge on the long distance bill.

The wireless Enhanced 911 (E911) rules seek to improve the effectiveness and reliability of wireless 911 service by providing 911 dispatchers with additional information on wireless 911 calls.

The wireless E911 program is divided into two parts - Phase I and Phase II. Phase I requires carriers, upon valid request by a local Public Safety Answering Point (PSAP), to report the telephone number of a wireless 911 caller and the location of the antenna that received the call. Phase II requires wireless carriers to provide far more precise location information, within 50 to 300 meters in most cases.

The deployment of E911 requires the development of new technologies and upgrades to local 911 PSAPs, as well as coordination among public safety agencies, wireless carriers, technology vendors, equipment manufacturers, and local wireline carriers.

(Source: http://www.fcc.gov/911/enhanced/)

The energy market has never been as volatile as it has been recently.  Your company can control your energy costs  through smart hedging strategies that energy contracts can provide.

To the uninformed, energy procurement seems simple.  Quality is not an issue since electricity and gas are always the same when delivered to your facilities.  The problem: energy pricing is complex.  Therefore, it’s not sufficient to just get quotes from three or four energy sales people and then select the one with the best price.

Clients such as the Boston Red Sox, Simmons College, Leviton Manufacturing. WCVB-TV, Mitre Corporation and Middlesex County turn to Better Cost Control to reduce their energy risk, control their costs, and protect their interests.   As a licensed energy broker working as a business partner, BCC makes quick decisions on their behalf when the timing is right–saving these companies thousands of dollars and eliminating budget risks.

Because energy is a commodity, timing is everything.  Just like stock prices, energy prices fluctuate—but predicting the price direction is even more difficult because the information needed for decision making is hard to interpret.  The experts in energy markets, therefore, make split second buying decisions.  Suppliers then need to add margin to the pricing they quote to cover their bets for future fluctuations measured in fifteen minute increments– rather than hours–since most companies are not prepared to sign the contract quickly.  Even then, their quotes are only good for that day.  For this reason, companies that work with a licensed energy broker—who can make quick decisions for them—pay significantly less for their energy than those that deal directly with energy providers.

Add to this complexity the rules, regulations and a variety of different fees that are specific to each state. There are even some fees that are specific to only certain regions of a state.  Then there is the question of whether your company is even on the correct utility rate. This is based on your historic energy consumption, but you cannot assume you’re your rate is the correct one.

Finally, consider the complexity of arcane contracts that affect how everyone sets their prices.  The price from supplier A may be lower than supplier B, but the contract terms might make supplier B the better deal.  Many companies don’t understand what they are committing to in their contracts. Terms like RMR, ICAP-Tag, Congestion, Capacity, Clearance Price, Capacity Reserve, basis, and LFR don’t have much meaning to most people, but when it come to energy contracts, they matter.

As a licensed energy broker, Better Cost Control can negotiate the best prices for electricity and natural gas. Using our regulatory knowledge and experience, you can be confident of securing the best energy options, regardless of your annual energy budget.

To get energy pricing, contact us  at http://www.bettercostcontrol.com/contact.html

Your telephone and data connectivity services are the life blood of your business.  There is probably no other service (except electricity?) that is more mission critical.  That’s why utilizing the best telecom carrier is a requirement for every business.

As the prices for long distance and data services has decreased over the past several years, the major carriers such at AT&T, Sprint, Verizon and Qwest have been forced to reduce their staffing levels to remain profitable.  This is one of the reasons why you find a maze of auto-attendant selections when you call for customer service or billing.

It is expensive to run a direct sales force with feet-on-the-street.  Someone has to pay this cost, and that someone is your company.   All of these carriers also have what they call an Indirect Channel.  This channel includes companies like Better Cost Control and others, that are able to obtain better prices for their clients, by eliminating the need for the local sales channel.  The Indirect Channel handles all the sales related customer service and client relations, and is compensated for this service.  The result is lower pricing for the customer.  This also usually means better service, since the indirect channel experiences far lower employee turnover than the direct sales force.  Think of how many telecom carrier sales people you have worked with over the last five or six years!

Another option is to purchase your telecom connectivity from a wholesaler.  The indirect channels for the major carriers also typically offer wholesale services.  Wholesale services can save you as much as 40% over “retail” while actually offering better service, than you might find direct.

You might be surprised to learn that you can get better service through wholesale than the direct sales channel.  How is that possible?  From the carrier perspective, say AT&T, the wholesaler is considered on big customer.  If a customer that does $50 million a year calls AT&T with a problem, how do you think they’ll respond?  Now if a customer that does $50,000/year calls AT&T, what happens?  You see, the small customer calls the main AT&T service number and goes through the normal queue.  The big customer has direct access to a special support group that only supports three or four major customers.  So the treatment is very special.  You receive this same treatment when you do business with the right wholesaler.

But there are some important things to consider in making the correct decision:

• How long has the wholesaler been in business?
• How much annual business do they do with the desired carriers?
• What is their D&B rating? (Check this yourself!)
• Do they offer 24×7 support?
• How many people are on their support staff?
• What level of support do they offer internally?
• What communications capabilities do they have with the specific carriers of interest?
• Can they integrate your varied services on a single bill?

Speak to reference customers about the wholesaler.   A good sales agent or telecom consultant that has been in business for any length of time won’t be suggesting a wholesaler unless they have done their own due diligence, since their reputation depends on it.  But for those customers that really get it, using a respected wholesaler for their data connectivity and telephone services is a real no-brainer.

Did you know that when a FedEx morning delivery letter misses the 10:30 guaranteed delivery time, that you are entitled to a 100% credit for that shipment?

All the major package delivery companies have a variety of service guarantees.  To claim credits on these guarantees, you need to review the invoices to see the delivery date and time, compare that to the guarantee and then file for credits all within ten days.  Do you have the time and energy to do this?  I’ll bet the answer is no!

 Our industry benchmarks demonstrate that 3% to 5% of deliveries are not performed to the guaranteed service level.  So if your company spends $150,000 on FedEx or UPS shipments, there might be $4500 to $7500 in credits that you are missing out on.  If you spend $500,000/year, then the numbers rise to $15,000 to $25,000 in possible credits.

You say, ” I don’t have time to worry about that!”

I say: there are automated ways of doing this that take absolutely no time.  You just get a check in the mail every month.  It’s like free money!   Read about how one client  http://www.bettercostcontrol.com/cs_riso_inc.html did it.

The mantra of cost reduction is to leave no stone unturned.  Saving small amounts in many areas adds up to serious money.

This blog is under development.  But ponder the above thought.  The services provided by Better Cost Control allow you to improve your bottom line with virtually no effort or risk.

Come back soon.