Billing Advances Aid Ops in Bundling

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As cable operators migrate into the multimedia world,
vendors of information-management systems are elbowing one another to pitch their
solutions for operators' new, complex billing needs.

Each of the major players have brought converged products
to the table, and each claims the features and skill sets to capture every penny of
revenue from each new business stream, sating every marketing executive's
product-packaging dream.

Even a few upstarts, such as Canada-based Proxima and Kenan
Systems (recently acquired by powerhouse Lucent Technologies) have stepped up with
promises that they can meet the needs of the operators of the new millennium.

But even as vendors sing the praises of their all-in-one
billing platforms, one question remains: How do you avoid sticker shock?

According to focus-group testing from CableData Inc.,
consumers are still not sure about receiving a $1,000 monthly bill comprising cable,
video, and wireless and wire-line phone services.

But when queried further, the same respondents knew how
much they paid separately for the services each month, within a dollar.

This seems to indicate consumers would accept a single bill
if they were persuaded that such a bill is a service. It also fits in with the plans of
many operators to provide one bill for the sake of unified record keeping and reduced
postal costs -- and to allow for different payment options.

For instance, some multi-product consumers already receive
bills with cable or Internet services billed directly to a credit card or subject to an
electronic funds transfer from their bank.

The only actionable part of the bill may be the cable
portion, for instance. The rest of the information, such as details on Internet usage, is
only for the subscriber's records.

Only a few vendors push a single-bill solution. Competitive
cable and telephone provider 21st Century Cable in Chicago sends out one
statement for its cable, high-speed data and telephony services, according to vendor CSG
Systems Inc. Cogeco Cable, a Canadian operator, will switch its 800,000 customers in
Quebec and Ontario to a single bill, generated by CableData's Intelecable convergence
billing product, by year-end.

PHONE BILLED SEPARATELY

Most operators that have moved into the multiple-product
realm are bundling cable and Internet-related services, leaving a separate telephony bill.
However, the technology they employ is able to bundle the products for record-keeping
purposes.

Put Cox Communications Inc. in that category. The MSO is
presenting services such as local and long-distance calling on one bill. Digital cable,
Internet and cable-modem rental fees appear on a separate statement.

Cox decided to take a conservative approach to bundled
billing, said Mike Riddle, the company's director of applied technology. The MSO believes
more customer education and company analysis is needed before it can make the jump to a
single bill. Further, some of its accounts-receivable information is sent to various
outside vendors.

Despite the separate bills, accounts are kept on a single
billing platform. Cox chose ICOMS from Convergys Corp. The MSO had invested in a billing
company acquired by Convergys, then called Cincinnati Bell Information Systems, in 1995.

"Customer service was our key interest [when we
selected a vendor]," Riddle said. "For instance, if a customer has a question on
a converged bill, we want the local CSR to be able to visualize it on the screen."

ICOMS, working with a standardized IBM AS400-based
platform, supports all the company's business practices, including work-order entry,
scheduling, flow-through assignments, tracking of historical accounts, accounts
receivable, collections and marketing campaigns.

Cox does its billing daily, from its Atlanta office. ICOMS
works with another vendor, J.D. Edwards, for ledger capability, as well as with Cox's own
marketing tools.

MODEMS ARE STICKY

Cox has noted no significant churn or downgrades among its
multiple-product customers, Riddle said. The anchor: cable modems.

"You just can't take away the cable modem," said
Riddle. "It (provides) an opportunity for upselling." He declined to offer
numbers.

Though Cox is pleased with ICOMS, Riddle continues to look
at other vendors.

When Cox ventured into telephony, no one at the MSO knew
how to build a phone company, he said. All of its technology was inherited from cable
operations and traditional, single-service telephony vendors.

So, software firms had bits and pieces of what Cox wanted,
he said. ICOMS had the best core competencies, but "we still need to be apprised of
what's out there," he added.

Cogeco also performed an extensive search before selecting
Intelecable, which the company deemed most appropriate to handle transaction volume and
complexity and because it offered scalability from a single database. As a user of
DDP/SQL, CableData's cable product, Cogeco also found itself creating billing records that
had to be sent to CableData's sister company in California for statement processing.

Using Intelecable, the operator can transmit its billing
data to a local statement processor, saving postage costs. Also, since it is moving to a
single database, Cogeco can choose up to 31 billing cycles and eliminate the
"twilight" period between the close of the billing period and the processing of
statements.

Customer records are updated in real time, so CSRs can tell
callers whether their payment has been posted.

More important, the product allows CSRs to monitor call
volume status and access 13 months of buying history. That allows outbound telemarketing
and enables telecommunications providers to notify consumers when their bills are
escalating beyond their demonstrated history of payment ability.

Flexibility and interoperability appear to be the greatest
selling points, and vendors have gone to great lengths to build those features into their
software.

MULTILINGUAL BILLS

Platforms now available allow MSOs serving ethnically
diverse communities to work in different languages. Features also allow a
telecommunications company to let the end user decide when the bill should arrive.

Vendors are also helping operators automate the billing
function as much as possible, to give consumers control and to cut operational costs by
avoiding the predictable surge of phone calls after the statement arrives.

Curt Champion, director of cable and broadband marketing
for Convergys, offered a scenario in which a multi-serviced home receives one or two
bills, dependent on that customer's dictates. The consumer can then decide when the bill
will arrive and determine that cable fees will be paid by check, Internet service will be
billed to a personal credit card and the telephony component charged to a corporate
account.

"[Billing software] is highly parameterized for each
customer," Champion said. "We can extend to specific requirements with the same
software across the board."

Scalability drew in client MediaOne. Although that company
will be absorbed by AT&T Broadand & Internet Services (which has a contract with
CSG), Convergys said it has a signed contract with MediaOne and the MSO has already
started migrating to ICOMS.

Flexibility also means looking beyond the paper bill. For
instance, CableData's CyberCSR allows end users to log on to a secure Web page to check
their bills and seek product-related information.

WEB SAVES MONEY

Web-based self-service can save operators a lot of money.
According to Robert McKenzie, vice president of marketing at CableData, Web usage can trim
customer interaction costs to 1/10th of a cent, versus the $3 to $4 spent when
a consumer talks to a CSR.

Time Warner's Memphis system has installed the software,
and its application is logging 7,000 hits per month. That translates into about $7,000 a
month in customer contact costs, versus $21,000 under the traditional method. The
application complemented its launch of Road Runner high-speed data service and defrayed
some of that service traffic.

CyberSCR has the added benefit of exposing consumers to
other products, such as pay-per-view titles and other marketing materials, as they
navigate the Web site.

CSG also has a self-service component, CSG Care Express, as
a module that can be deployed with its Convergent Express. Its first customer is Time
Warner Cable's Los Angeles cluster. The business unit will beta test the convergence
product for the next 60 days. It should be ready for broad deployment in eight to 12
months, executives said.

Convergent Express leverages CSG's core product, so current
customers can upgrade with minimal training to CSRs, said Char Noland, director of sales.
CSG currently handles billing for operators serving 34 million customers, roughly 55
percent of the video marketplace. Its largest customer is AT&T Broadband, from which
it bought a proprietary billing system still under development. That product, SummiTrak,
has become the CSG Workforce Express product.

The convergence product is designed so telecommunications
companies can create specific work screens for CSRs, depending on their aptitude level.
Representatives can drill down through separate menus tailored for individual products,
such as telephony. The database at the service bureau tells the CSR which tasks must be
done (such as switch updating, order validation or contacting a telephony vendor) to
complete a request for service.

OTHER CONTENDERS

Though CableData, CSG and Convergys have staked out the
bulk of the business, other convergence options are available.

Proxima just released its contender, Mystral, and offers a
unique guarantee to operators considering its service. If the company believes it cannot
install Mystral on time and on budget, it will not sell the system.

Proxima, which serves companies primarily in Europe, has
yet to invoke the guarantee, company officials said. Look Communications, a
12,000-subscriber operator in Canada, has just signed up for Mystral.

Kent McIntosh, Proxima's director of strategic development,
said Mystral is a technology developed from the start as a convergence solution, not a
reconfigured system designed for cable. The telecommunications client can use Mystral to
manage residential and commercial accounts, and even figure settlements with partners and
track ratings processes. All of those functions are configurable.

The company conceded most of the big potential customers
have re-signed with the big three billers. "They feel risk-adverse," he said.
"They tend to stick with what they know."

But with the big behemoth, AT&T Broadband, dictating to
billing vendors, "maybe the smaller telecommunications companies with specific needs
will come to us," McIntosh said.

There's one thing all the players agree on: As the number
of vendors offering multiple products grows, companies will have to change one basic
factor that ruled cable-only billing. It is no longer efficient to track a customer by
address, the traditional method.

The only way to track the moving target that is the modern
consumer, and follow his paying (or non-paying) habits, is to key all accounts to the
customer's name and Social Security or driver's license number. Those will not change, as
addresses and phone numbers will. Also, identification by name will allow operators to
check into national credit databases.

No one wants to sign on a customer and send them that new,
bundled bill if they've proven no ability to pay elsewhere.

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