cVidya Slights AT&T, ECtel and Subex

Last week I blogged that cVidya and BT had won this year’s World BSS Award for revenue assurance. The award has doubtless boosted egos at cVidya, but perhaps the effects have gone too far. Since the award was announced, cVidya has managed to find reasons to subtly, but publicly, denigrate two of its larger competitors and one very large telco.

On June 15, cVidya’s Chief Scientist, Dr. Gadi Solotorevsky, blogged about the settlement of a class action law suit about third party services billed by AT&T. According to the news story, the same kind of law suit has been filed with all the other big mobile providers in the US, but AT&T is the first to settle. Per the details of the settlement, the refunds to customers will be modest. For example, the settlement covers customers between 2004 and 2008, but no more than 3 months of third party subscription charges will be refunded. The case looks pretty simple to me. Third party providers used unscrupulous tactics to get customers to sign up for services without making it clear how much they cost. They used the same tactics with all US mobile providers. Many customers who got suckered spotted the unexpected costs on their bills and complained. AT&T, for one, gave refunds to customers who complained. Lawyers spied the opportunity to make some money, by suing on behalf of all customers charged for those third party services, and not just the ones who complained. AT&T, wanting to protect its reputation, opted for a reasonable settlement instead of fighting the law suit and appearing unsympathetic to the customers who had been swindled. Solotorevsky, in his blog, drew the following conclusions about AT&T and its approach to revenue assurance and risk management:

Now AT&T acknowledges the problem, do their existing mechanisms permit to discover which customers where unjustly charged, and if not, what mechanisms are needed? It seems that AT&T will wait until the individual customers complaints. Is this approach something that regulation can permit in the long run?…

…Don’t $4.3 million to the plaintiffs’ lawyers + whatever payments (which I assume will be higher) to the customers + the cost of handling all the individual claims justify some investment in RA tools, and proactive RA methodologies, to prevent such things from happening?…

…Content is out there and it is a mayor [sic] opportunity for SPs. Just supplying it without taking appropriate practices is a mayor [sic] risk – it is the SPs responsibility to mitigate the risks, to really enjoy the fruits of the content revolution.

I think this criticism goes too far. Solotorevksy is saying that not only AT&T, but also the businesses supplying AT&T with revenue assurance and risk management tools and advice have done too little. That is a bold assertion to make about a large publicly-listed company in the country which is home to the Sarbanes-Oxley act and all that entails about internal controls. To begin with, to say that AT&T now acknowledges the problem implies they did not acknowledge it before. The settlement, however, is not an admission of wrongdoing by AT&T. Because AT&T has given refunds to those customers that complained directly, we know AT&T has already acknowledged third party misinformation is a genuine issue. The obligation asked of AT&T by Solotorevksy, that it have mechanisms to discover who has been unjustly charged, would be onerous. A customer is unjustly charged if the customer was misinformed about costs. But what kind of mechanism, other than reviewing all the marketing output of third parties, would allow AT&T to identify when third parties misinform their customers? Even if AT&T realizes, as a result of complaints, that third parties provided inadequate information in general, it does not follow that they should be able to identify which customers have been unjustly charged. To do that, you would need to identify which specific customers had been misinformed. That is the same as knowing what had been communicated to each individual customer. A customer that gets inadequate information through one channel may have also obtained adequate information about costs through another. How would AT&T be able to tell which customers were adequately informed from those that were not? To do so would be impractical. The best option is the option that AT&T has taken, which is to assume that all customers who either complain or who sign up to compensation via this law suit were misinformed. It also, fairly and reasonably, has established that customers have some responsibility for checking their own bills and taking steps to protect their own interests, which is why the subscription refunds will cover no more than three months of payments, no matter how long the third party subscription charges were levied in practice.

There is no doubt that AT&T would rather avoid the cost of legal fees, handling complaints, and refunding customers. That does not justify a conclusion that extra investment in revenue assurance would have enabled AT&T to avoid these costs this time. It is definitely a step too far to blame inadequate revenue assurance tools. I cannot imagine what kind of tool would even be relevant. This issue is about the customer’s understanding of the services they signed up for, and of the charges they will pay for them. I usually cite these kinds of issues as proof that tools are not the solution to all revenue assurance problems, despite the over-zealous way that revenue assurance developers try to pretend that software solves every problem. No tool is going to tell you if a customer understands or misunderstands something, or if the blame belongs with how the information was communicated or with the customer for failing to read or listen properly. A reconciliation will not help you determine if a human being was tricked, or whether they simply made a mistake. The right to complain does not imply every complaint is justified. A proactive review of information to be provided to customers does help to mitigate the risk of misunderstandings, but it is not clear what responsibility a network provider could and should take over the information or misinformation given out by third parties. Clearly the primary responsibility for clear communication is with the third party, and networks should be reluctant to adopt any universal obligation to protect customers from the improper behavior of companies outside of their control. Even if the network tries to review the marketing practices of third parties, and seeks to approve them before signing up a third party supplier, an unscrupulous third party could always vary the content afterwards, or try to deceive the network about what it says to customers and what it does not say to customers. I really think AT&T deserves an apology about the implication that it may have supplied third party content without taking appropriate steps to mitigate the risk to themselves and to their customers.

This cVidya blog draws an unwarranted conclusion about the investment made by AT&T in its revenue assurance tools. I do not think it is fair to conclude that AT&T has made an inadequate investment in revenue assurance, and in revenue assurance tools in particular, just because of the decision to reach a settlement of this law suit. There are some things that are bigger than revenue assurance, like reputation. A business needs to defend its reputation even when the threat to its reputation is not justified by any wrong-doing or failure on its part. The timing of cVidya’s criticism of AT&T is especially peculiar. Last week BT and cVidya won the prize for best revenue assurance project in the World BSS Awards. The runners-up were AT&T and ECtel. ECtel, like cVidya, are an Israeli revenue assurance business. By implication, if AT&T’s tools are inadequate, either ECtel has provided them with inadequate tools, or AT&T simply has not purchased enough of the right tools. Either way, I think cVidya should be more careful about statements that could be interpreted as slurs about the quality and adequacy of work performed by their professional peers and competitors.

The next day, cVidya’s press release made it clear how proud they were to be co-winners of this years award for best revenue assurance project. In the press release they stated:

cVidya was awarded this recognition for deploying its MoneyMap®/Configuration and MoneyMap®/ Rating and Billing Verification solution within the RA Center of Excellence at the British Telecom group, demonstrating a strategic and comprehensive RA program covering all business units of BT, and handling both the business aspects and the operational day-to-day challenges of Revenue Assurance.

This looks like a very deliberate snub of Subex and any other revenue assurance vendors that cVidya must know has supplied the various business units in BT. The press release encourages the reader to believe that cVidya’s products are used to provide comprehensive revenue assurance across all units. However, it was only in January of this year that BT Global – one of those BT units – signed a multi-million dollar deal to deploy a Subex revenue assurance bureau. See the press release here. It is reasonable to expect some exaggeration when businesses market their products, but exaggeration can go too far. Either cVidya’s solutions in BT are comprehensive, or they are not. If they are comprehensive, then there would be no need for rival vendors to supply individual BT units with additional revenue assurance solutions. If they are not comprehensive, then cVidya should avoid using language that implies they are. Snubbing rival vendors might seem like a good idea, until you realize you must also be snubbing the people in BT who signed those deals and work with the rival vendors. If you really want a strategic and comprehensive revenue assurance program, you have to work with your colleagues, not badmouth them. The irony here is that cVidya is guilty of some dubious marketing the day after it chastises AT&T for not doing enough to prevent and address misleading marketing.

Perhaps cVidya is only guilty of some careless language. Even so, if I was in AT&T, ECtel or Subex, I do not think I would be feeling too complementary towards cVidya right now. cVidya needs to draw a line, in public, between fairly promoting its own products and being disrespectful to its rivals and the people in operators who decide to buy rival products. It would be generous to say that these recent cVidya comments sit on that line, if they do not cross over it. Insulting rivals at least is understandable. Criticizing potential customers is not. cVidya and Solotorevsky have played an admirable role in supporting RA in the industry, particularly through the TM Forum, but they risk going too far and making it hard for rival telcos and vendors to collaborate with them in future. The RA industry is small, and it employs some very thin-skinned people with long memories (as I have learned the hard way!) so you never know when relationships will be reversed, giving old enemies an opportunity for payback. Being an independent consultant, I say what I think, safe in the knowledge that ultimately, I will never be able to please everyone. I need to give useful advice, and that advice cannot always be positive about all things at all times. cVidya is vying to be a global supplier that has to keep its investors happy by making big sales all over the world. cVidya do not have that luxury to slight potential customers by saying they have made bad choices by not buying enough tools, or by buying the wrong tools. What goes around, comes around. Perhaps cVidya should spend a little more time analyzing their own performance, whether it wins awards or not. They can start by taking a look at my recent blog about the leakage I noticed on my own BT bill… ;)

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.