Bill2phone

Bill2Phone™ is an alternative payment option, offered by BSG Clearing Solutions (BSG), that allows purchasers of eCommerce Digital Content (consumers) to place those real-time purchase transactions onto their Local Exchange Carrier (LEC), telephone bill (similar services are offered by other clearing houses listed below).The consumer receives a bill from their LEC on their regular monthly billing cycle. An additional page of eCommerce charges is appended to that bill by the clearing house in accordance to LEC guidelines as defined in a Billing and Collections (B&C) Agreement between the two parties. These charges are placed on the un-regulated portion of the onsumers bill. Consumers remit payments for those purchasers directly to their LEC who further remits payment to the clearing house, who acts as a clearing and settlements provider to participating eCommerce Merchants.

History

Placing third party charges onto a telephone bill with B&C functionality, has been in practice since the time of Bell System Divestiture and the Modified Final Judgement in 1982. As part of the break up of AT&T, it was mandated that the resulting RBOCs, and subsequently most LECS, would allow other providers of telecommunication services to place their third party charges onto the LEC bill. The intent and result was to increase competition in the industry.

As telecommunication services are highly regulated and billing systems are complicated, an industry emerged as did standards (EMI) to simplify the process of taking the third party telephone records and placing those charges onto the1400 US LEC bills. In the 1990’s there were many providers of long distance telecommunication providers IXC, Operator assisted telecommunication service providers, etc, who wanted to avert or defer the cost of implementing a costly billing system of their own, and by doing so, get to market more quickly. IXCs also understood that a single bill to the customer was desired. Companies like ZPDI, , Integretell, Enhanced Billing Services, OAN, ACI and many others emerged to reduce the integration complexities of these many to many relationships.

Billing for third party charges had for the longest time been restricted totelecommunications charges, Customer Premises Equipment(CPE), and Enhanced telecommunication charges (e.g. ISP services, voicemail). In 2005, the LECs having expanded their own initiatives into IPTV (IPTV: e.g. AT%26T U-verse,Verizon FIOS), and Video on Demand, and with increasing penetration of DSL connectivity into the household, allowed for more content types to be billed to their bills. While there is no uniform standard for what is an allowable content type, it is safe to say that most digital content delivered over the internet has been acceptable as long as it meets the prurient interests of the LEC consumer base.

As it is now possible to bill for digital content using the phone, a variety of changes to the standard data and financial procedures had to be implemented to satisfy the needs of the entire value chain: Consumers, eCommerce Merchants, Clearinghouses and LECs.

imilarities to Credit Card

For illustrious purposes, Bill2Phone and like services work very similarly toCredit Cards from the following value chain perspectives:

End Users: Online Consumerschoose a Bill2Phone payment option. They are prompted to enter their telephonenumber and data that uniquely identifies them (e.g. last 4 digits of socialsecurity, LEC billing code, birthdate, etc).

Merchants: Merchants collectinformation from the user to uniquely identify them. They attach appropriatepurchase data (e.g. date, amount, product description, tax, email, etc) andcommunicate that data via a secured Payments Gateway and associated API calls (Authenticate,Authorize, Settle, Sale, Credit Order, etc) to a Payments Processor orclearinghouse. A fee is assessed the merchant for processing transactionsthrough-out the value chain.

Clearinghouse: Authenticates theuser against various public and private databases and then authorizes thetransaction based on preset spending limits as determined by the LECs. Translatesthe API call into a telecommunication industry standard (EMI) format defined bythe Alliance for Telecommunications Industry Solutions’s (ATIS) Ordering and Billing Forum (OBF). The resulting EMI record is sent to the LECs for processing in theirnormal billing cycles. Remitted payments from the LEC are subsequentlyremitted to the merchants less their processing fees.

LEC: Processes the EMI records for placement on the end user telephone bill, collects payment fromthe end user and remits payment back to clearing house.

Differences to Credit Card

Billing to a phone bill is different from credit cards in a variety of ways:

The consumer is not offered a revolving credit line. The charges are expected to be paid, in full at the time of the next billing cycle. Failure to pay in a timely manner can result in some user services from the LEC being with held, and subsequent collection proceedings.

Merchants are typically paid after the monies have been remitted by the consumer to the LEC. However, most providers of this service have facilities for forward funding monies to the merchant to assist in cash flow.

User credit lines typically range from $100-$200 per month. The intent of the service is to allow for sufficient micro payments ($0.99 -$50) on a single transaction basis or for subscriptions.

imilar Services

Others providers of similar services include [http://www.ildtelecom.com ILD] , and PhoneBill™ from [http://www.paymentone.com PaymentOne ] .

References (External)

[http://www.nanpa.com/number_resource_info/carrier_id_codes.html NANPA Carrier ID Codes]

[http://www.atis.org/obf/mpc_home.asp ATIS Online Billing Forum]

[http://www.bsgpayments.com/bill2phone.php BSG Bill2Phone]

[http://www.atis.org/inc/index.asp ATIS]

[http://www.fcc.gov/Bureaus/Common_Carrier/Other/lec62497.html FCC Common Carrier Discussion]

Further Notes

Modified Final JudgementIn United States Telecommunication law, Modification of Final Judgment (MFJ) is the 1982
US Antitrust law suit settlement agreement Consent Decreeentered into by the United States Department of Justice and theAmerican Telephone and Telegraph Company (AT%26T) that, aftermodification and upon approval of the United States District Court for the District of Columbia, required the Divestiture of theBell Operating Companies from AT&T.

The exact term for the MFJ is given under the general definition of Local Access and Transport Area (LATA), a term usedin U.S. telecommunications regulation for geographic areas in which localtelephone companies are allowed to provide service, the term being used is

the Modification of Final Judgment (MFJ) entered by the United States District Court for the District of Columbia in Civil Action number 82-0192 or any other geographic area designated as a LATA in the National Exchange Carrier Association,