Telephony 101

Part 1Secrets Revealed

Dial “F” for Fone FundamentalsPresented by Ken FinkelsonABA 2004 National LRIS Workshop, San Diego

How do we get there ?Phil Anderer was “caught in the act” of an

indiscretion by his wife. He quickly realizes he will need an attorney, for she has threatened immediate filing for divorce. She was overheard leaving instructions to her attorney: “I want him left only with one pair of socks and a belt from which he can hang himself after the judgment” He called your referral service’s 800 number.

Before the call even gets here The 800 service

routes the call to the servicing local phone company (last mile)

The caller is routed into your facility where it is handed to your system

Telephone

QWest SBC

QWest Switch SBC Switch

DEMARC in your buildingVerizon

Verizon Switch

DEMARC Main DistributionFrame (MDF)

Your Phone SystemPBX -Key - or IP

Burnin up the wires These are the

“internal” connections to the phone system.

In addition to the lines feeding the rep, there are peripheral devices hooked in. These can be Voicemail, and other terminals

Your Phone System

Main DistributionFrame (MDF)

Intermediate DistFrame (IDF) a.k.a.

Floor Closet

MaintenanceTerminal

Vociemail

ACD ReportingDevice

Call DetailRecorder (CDR)

IntelligentModem

We’re finally there From the floor

closet, cables are run to individual locations on the floor, where the phones are connected.

Agent's Telephone

IDF (Floor Closet)

Floor orWall Jack

Why is this important and Why do I care ? Each of these connections bear an

expense, whether hidden or visible.

Lets start from the inside out Excluding the capital expense of the

PBX & the local and long distance charges, look at cabling and peripherals

DEMARC Main DistributionFrame (MDF)

Your Phone SystemPBX -Key - or IP

Extending the phone company’s entry point into the building (DEMARC) to where your phone system is located can be expensive. This can be accomplished by the Phone Company, PBX Vendor, or Electrician/Cable contractor. Ensure you get quotes !

Your Phone System

Main DistributionFrame (MDF)

Intermediate DistFrame (IDF) a.k.a.

Floor Closet

The cabling between the MDF and IDF or IDF’s is inexpensive (comparitively) to buy, but very expensive to pull. This is due to the size of the cable, coring, fire-stops, etc. Ensure you buy plenty of expansion so you only pull once. Generally this is pulled in by a cable contractor, electrician or the PBX vendor. Occasionally the phone company will do this, but they are not usually competitive and don’t want this type of business

Agent's Telephone

IDF (Floor Closet)

Floor orWall Jack

Same rules apply, you only want to pull once. Ensure you have sufficient station cable to handle possible future expansion. Make sure it is data quality cable i.e.: Category 5 – 4 pair – UTP (or better) with RJ45 jacks.(Lets explain that one !)

What kind of system do I want PBX Key Centrex/Essx IP-Hybrid IP

PBX and Key System Both are legacy and they technically

differ only by how they are classified by FCC-ID.

They are hard-wired to the station jack so any compatible set will ring your line at your desk

The exact wire leaving the switch needs connectivity to your exact jack

PBX hints Know what features you need and

want Get line item pricing Try to get all the features you need

up front and activate later. These are always cheaper initially and expensive later

Look for hidden costs

More hints Hidden cost examples

Does not include cabling Training not included Needs server (not provided) Does not include software license fee Installation is during business hours –

does not include overtime Does not include UPS system

Centrex & ESSXThese are same as PBX/Key except

the phone company is using their switchgear and you have no (or minimal) hardware investment. In fact, you may not even own your telephone sets. Over an amortized system life, this will generally be a more expensive option.

Voice over IP (VoIP) Basics

IP -Telephone192.168.1.5

Extension 4357MAC Address 34.56.55.43.56

10BASE-T wall plate

Data switch on serviced floor - connectedvia backbone to data-center

Patch panel - servicing closet

Core Switch in Data Center

Telehphone Controller,telephony server, etc

Desktop Computer

Fiber -Optic Backbone

Cuts down on install expense byeliminating need for "Black Riser Cable"

“Input/Output Device !”

2nd Floor

1st Floor

BasementSewer Line

(Phone Terminal)

IDF

MDF

Access to Phone Co.

Perhaps this analogy will help

Examples of IP Telephones

Example of an IP Softphone

VoIP - Advantages Utilizes Data Network Easier to maintain Done properly – will be less expensive

Less Build-out Expenses Less MAC Cheaper maintenance fees Open standards switchgear allow mix and

match (NOTE: theory great – practice; not yet)

More VoIP Advantages Sets work anywhere on network. Not

port dependent Variety of “softphones” available Can be maintained by data personnel

not necessarily voice experts One network and cabling

infrastructure This is the future !

VoIP Flavors Line Side

Means the phone or station connections inside the system

Can be “soft phones” or traditional handsets

Phones have Media Access Control Layer (MAC) addresses

Trunk Side Means

connectivity to outside world or remote offices

Telephone company is the public internet or data connection

VoIP Practical Application Faith Buena is an attorney who works

with your LRIS. She has a laptop with “soft phone” capability on it. She can plug in anywhere in your network (or even off premises) and calls can be routed to her for her specialty. She can concurrently use her laptop to access LEXIS, her docs, etc

What if I don’t want to embrace this technology, just shake hands with it ? Hybrids are available where you don’t

have to go 100% into the VoIP arena Examples of when to use Hybrids

You have a huge investment in sets or a legacy system

The system hasn’t been amortized yet The system is serviceable and has

custom applications written for it

What’s the Bottom Line ? It’s a jungle out there ! Ask for help

and use fundamentally sound purchasing techniques i.e.: RFI/RFP/RFQ.

Look at the whole system before you sign anything. Don’t ask for $200k for a system, get it approved, and find out you need another $80K in cable !

End of Part 1 - Questions ??

Part -2- Pumping up your vendor management muscle !

Let’s go to the Gym !

Dealing with the myriad of vendors can make you feel like a 10 year old calculus student locked in a room full of school bullies. You may be smarter but there are more of them and they are bigger than you. How can you even the playing field ? Answer: bulk up with the free-weights of knowledge !

Who are the vendors ?

PBX Vendor Local Exchange Carrier (LEC) Interconnect Carrier (IXC) Competitive Local Exchange Carrier

(CLEC) Cabling Contractor/Electrician/Riser

Management

PBX Vendor

Installs, Maintains, and performs Moves, Adds and Changes (MAC’s).

How is he/she paid ? Maintenance Contract Hardware Purchases MAC’s Time and Materials (T&M) where

applicable

PBX Vendor – Cost Savings

RFI yearly maintenance pricing T&M if this is prudent Consolidate MAC Activity Use independent for MAC work Use the secondary market (resellers) Pre-wire if possible Learn to do the easy items yourself !

What the heck is a LEC ?

The LEC is the local exchange carrier. In the industry they are known as the “Baby Bells” or the regional bell operating companies a.k.a. “RBOC’s”. They are a by-product of Judge Greene’s ruling that broke up the bell system in the 1980’s and created the SBC’s, US West’s, Bell Atlantic’s, Bell South’s etc.

What’s so important about Judge Greene ?

By breaking up the “Bell System” vendors can compete for your business. Today you can buy your local and long distance service from anyone in your market.

Remember when $ .10 for long distance was a bargain ? Now it’s a rip-off !!

The downside – It’s a lot more complicated.

Who are the IXC’s

The inter-exchange carriers are most commonly the big long distance carriers. AT&T, Sprint, MCI, Qwest etc.

They usually do not have local physical access to your facility and rely on the LEC’s for the “last mile” of service.

UNE-P // FCC // Court Rulings

Simply stated, for LEC’s to provide long distance service as part of their offering, they were required to provide their “last mile” to the competition at a discounted wholesale rate. These Unbundled network element (UNE-P) rates were set by the government and were (as stated by the LEC’s) below cost !

Rulings Continued

The Supreme Court refused to rule on a lower court ruling which will allow the UNE-P rate requirements to expire June 15, 2004. Ironically, IXC’s are the LEC’s biggest customers. One can assume there will be a re-negotiation of wholesale rates shortly.

CLEC’s (Competitive Local Exchange Carrier)

Want to be your own phone company ? There are over 300 in California alone. Lets say Jane Nosbisch wants to start a phone company (call it NosbischTel). She could make an arrangement to re-sell SBC service to you at a rate lower than the average. She negotiates a bulk rate with SBC for a 40% discount.

Secrets of “NosbischTel”

Jane knows she can resell service to all the LRIS groups with a combined buying power to justify the lower rate. She offers LRIS groups 20% off the going rates. The carriers agree to wholesale the bulk rate to her at 40%. She can pocket the difference. All she has to do is bill you !

What’s the catch ?

If everything works fine, None ! But, if NosbischTel goes bankrupt &/or stops paying their bills, you will be disconnected, even if you pay your bills on time. You are not the LEC’s customer, Jane is ! This also applies to outages and cases of line trouble.

Weigh the Risk vs. Reward

CLEC’s generally offer the lowest rates. You will have to weigh the risk versus reward. Take the time to create a spreadsheet and see where the numbers come out. Then weigh the potential cost of an outage and speed of recovery.

You are the best folks to make this recommendation !

Forget the old rules – There’s a new game afoot

Don’t get caught up in too much of the old naming conventions. LEC’s can sell Long Distance, IXC’s can sell local service, cable tv companies & CLEC’s can sell anything !

So how do I play ??

Try this matrix on for size

Telephone Expense Worksheet (Fixed)

PBX Maintenance

Vendor Cost Annual Term Notes

Nextiera 9,000.00$ 1 yr 3 year rates = $7700/yrAvaya 11,000.00$ 1 yr 2 year rates = $10,999/yrSBC 9,600.00$ 2 yr 1 year rates = $12,500/yrVerizon 8,800.00$ 2 yr No 1 year rate offered

And one more !

Telephone Expense Worksheet (Variable)

Local Service

Vendor Cost /Min # Minutes/Yr Annual Cost Commitment

SBC $0.040 100000 4,000.00 2 yrUSLEC $0.033 100000 3,300.00 2 yrNosbischTel $0.028 100000 2,750.00 1 mo

Long Distance

Vendor Cost /Min # Minutes/Yr Annual Cost Commitment

AT&T $0.028 29000 812.00 2 yrSprint $0.026 29000 754.00 1 yrMCI $0.024 29000 696.00 2 yrUSLEC $0.019 29000 551.00 1 yrNosbischTel $0.017 29000 493.00 1 mo

Last one – I promise !

Telephone Expense Worksheet (Variable)

800 Service

Vendor Cost /Min # Minutes/Yr Annual Cost Commitment

SBC $0.044 160000 7,040.00 2 yrUSLEC $0.037 160000 5,920.00 2 yrNosbischTel $0.019 160000 3,040.00 1 mo

What’s the bottom line ?

The bottom line is you can win the game and lower prices. Using old proven techniques like RFP/Q/I will tell you where you are and where you can go. And, you are not alone. Use forums like this one to share ideas, victories and near misses.