What Your Phone Company Doesn’t Want You to Know About Caller ID

Sept 27, 2006
What Your Phone Company Doesn’t Want You to Know About Caller ID
By Greg Smith

Every day, millions of Americans are paying for a specific service, and yet they are completely unaware that they are not getting the most for their dollar.
Customers that subscribe to caller ID services pay anywhere from $6.75 per month up to $9.95 per month, but a number of calls listed as "unavailable," "unknown" or "out of area" continue to appear in the caller ID display. While some calls are genuinely blocked or listed as private, these unavailable and out-of-area calls are simply the result of a phone company not spending the money to gather this data.
A small test of caller ID accuracy conducted by The Boston Globe in conjunction with Accudata Technologies Inc. found several instances where two prominent providers in the New England area didn’t supply a caller’s name because they did not want to pay the extra money to obtain the data from the Line Information Database (LIDB)/Calling Name (CNAM) Database where the data is stored – in some cases these databases are combined.
CNAM/LIDBs house most of the working telephone landlines in North America and contain information ranging from service and operational information to customers’ names, their payment history indicator and their preferred language. This data is vital to the normal operation of the phone line. Telephone service providers need this information not only to display names on caller ID, but also to make credit decisions, ensure appropriate billing and other necessary services that callers take for granted. And with fewer than 20 CNAM databases in North America, including one owned and maintained by Accudata, carriers don’t have to search very far to get this information.
In The Boston Globe test, conducted by reporter Bruce Mohl, five calls were monitored on two telephones in Massachusetts belonging to customers who subscribed to different, large telecom companies. Each of the five calls came from out of state; two from Texas and one each from Missouri, New York and Washington. Of the five calls, the first provider was able to identify and properly deliver the calling name for only two. The other service provider registered an even less favorable score, identifying only one of the calls. Research showed that the names were available to both telecom companies; they just chose not to retrieve the data.
Caller ID works by matching the phone number of the person calling with a name obtained from a CNAM database. For the larger providers, caller ID information is typically easier to retrieve in their service areas since it is likely that the caller is one of the carrier’s own customers and therefore the information is located in the provider’s own database. However, if a caller is calling from outside the provider’s service area, or if he or she subscribes to a different provider, the firm then has to purchase information from the caller’s phone company. For example: Larry and Gail both subscribe to AT&T.
If Larry calls Gail, AT&T has only to dip into its own database to provide Gail with Larry’s name and phone number. However, if Angie – who subscribes to Verizon – calls Gail, then AT&T must pay Verizon to gather Angie’s caller information.
The cost of this information is typically less than a penny, but many telecom companies don’t give their customers what they paid for because they choose not to purchase data from other telecom companies. So why aren’t telecoms providing true caller ID services for their customers? Follow the money. Assume that the average telephone receives 200 calls a month, and 100 of those calls come from within the network. In this case, a phone company would need only to identify 100 phone calls from other databases. At a premium rate of one penny for each call, providers would spend $1 each month per customer. If the customer pays $7 per month for caller ID services, the provider receives a 600 percent profit. And while the pennies can add up to millions of dollars, how many other services have this kind of profit margin?
Another big reason for failing to provide true caller ID services is that phone companies don’t want to give money, even the pennies per call it costs for calling name information, to their competition. But perhaps the greatest reason is the lack of knowledge by the customers. Most caller ID users don’t know why "unavailable" shows up on their caller ID displays, and since most calls typically come from within the calling area anyway, unknown numbers are pretty unusual. The biggest exception is cellular calls that still do not always have the name stored in an accessible database.
This doesn’t change the fact that caller ID customers are still paying anywhere from $80 to more than $100 per year for a service that is not living up to expectations. Consumers do not typically put up with this type of service; they squeeze every last mile out of their gas tanks, every last gigabyte out of their iPods or every last bit of speed out of their modems. Consumers would complain if the call forwarding feature that they purchased only worked 80 percent of the time, or if it only functioned if it was forwarded to a number provided by the same carrier. People want the most for their money, but if they want the most out of their caller ID, they’re going to have to do something about it, whether by lodging a complaint with the FCC or to their local state public utility commission. Otherwise, phone companies will continue to provide this incomplete service to unsuspecting consumers. Consumer complacency is the phone company’s friend.

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