Submitted by Adam Reeves, NetScout Product Marketing Manager
The FCC is allowing telephone operators to stop filing yearly reports on service quality and customer satisfaction as part of their ARMIS (Automated Reporting Management Information System) filings that had been mandated in 1987. I had originally read about the issue at wsj.com (– sorry it’s pay to read the entire article) and saw that in fact, on Friday, the FCC had issued a 57 page document announcing the change (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-203A1.doc).
While, according to the Wall Street Journal, consumer groups and state regulators opposed the request, claiming that the “data collected are useful for monitoring the largest phone companies’ infrastructure investments and service quality,” I’ve decided that I’m OK with it. I’ve got three interrelated reasons for feeling this way:
· Changing competitive environments
· Investment in service quality
· Focus on churn
First, let’s look at the changed competitive environments that these carriers are playing in. When the rules mandating the reports went into effect (in 1987) there were a limited number of providers of local exchange (as opposed to long distance) services. Generally consumers were forced to go with a single carrier as there was only one per region. The competitive local exchange carriers like MFS and Teleport wouldn’t become players for several years still – and even when they did, were focused on large enterprise accounts. Now the world has changed. I moved to Denver last year and my choices for local voice services (ignoring data) were Qwest, AT&T, and Comcast. In addition, I could also choose to not have a landline and have gone all cellular (adding a large number of options). I could even claim that Skype is an option, if I wasn’t worried about quality and I wanted to save some money. Coupled with number portability, I feel the market for my voice business is highly competitive. In fact, as a percentage of total carriers, the number that were still subject to ARMIS was tiny (compared to the 100% it was back in 1987). A result of this competition is that service providers need to focus on the customer and try to differentiate themselves.
The competitive marketplace leads us to the second point, investment in service quality. One way in which carriers are being forced to differentiate themselves is through the quality of the services that they’re offering. Whether its voice or data services, customers (consumer and business) aren’t going to (if they can help it) stick (at least not for long) with a service that doesn’t work. This need to differentiate based on service quality is combined with the move to VoIP technology (cost reduction with a hopeful impact on consumer cost) and IP-based services and application (service differentiation). As a result, carriers are rolling out pretty cool monitoring and troubleshooting solutions for assuring their networks, services, and ultimately customers. In fact, NetScout has many of these companies as customers as they work to bulletproof their networks and services, proactively monitor performance, reactively troubleshoot service degradation and faults, and keep their customers happy with their service.
By keeping their customers happy, the carrier goal is to a) reduce churn, b) attract new customers, c) sell their customers additional services, and d) make more money. With it being so easy for a customer to switch carriers, churn has become the key performance indicator for the carrier community. And, with the growing numbers of competitors (bringing us full circle, back to competition), and ease of switching carriers (number portability, again) carriers need to work harder and harder to assure their networks and keep customers happy (service quality issue from the paragraph above) or face reporting degraded churn statistics (Wall Street does like that) and ultimately, make less money. This adds a level of urgency to the need to invest in service quality which is driving the need for IP-based service assurance product like nGenius Performance Manager.
I don’t necessarily see the removal of the requirement as a result of what I’ve written about here. I think they didn’t like filing the reports, didn’t like the cost associated with it, and felt it put them at a disadvantage against the many carriers that weren’t required to file them. All that being said, I’m fine with reduction in visibility into quality of service because I know a lot of them are using NetScout’s solution to maintain and improve service quality.
Agree? Disagree? Leave your thoughts in the comments.
More information can be found on the nGenius Performance Management system and its use with carriers in the following documents:
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