State departments pay a wide range of rates for their services and maintenance, many paying for local lines and long distance services with rates payable in measured business flat and long distance rates. [3] Many state departments also incur costs by using a call reception console and some by employing receptionists to answer calls.
State departments now connect from their central office local area network (LAN) to the satellite office LANs through a wide area network (WAN). The LAN and WAN connectivity is provided via network switches that have the ability to carry voice and data, but the state is using the switches to transmit and receive data only. Most of the data network switches currently in use could also be used in a voice over internet protocol framework.
While the Department of General Services Telecommunications Division CALNET contract provides for state telecommunication services, many state departments receive better rates from non-CALNET providers. The CALNET contract also restricts departments from using new and emerging technologies. A limited survey of state departments found that the monthly cost for each telephone line averages about $80.
| Agency Name |
# of Phone Lines |
Monthly Cost |
Monthly Cost per Line |
Note |
|---|---|---|---|---|
| EDD [4] | 25,588 | 1,761,170.47 | 68.83 | Average numbers |
| Corrections | 3,000 | 275,000 | 91.60 | |
| FTB [5] | 7,661 | 896,796.33 | 117.06 | FY 02/03 numbers |
| CHP [6] | 4,240 | 339,031.33 | 79.96 | FY 02/03 numbers |
The convergence of voice, video and data communications on an IP network lowers the total cost of ownership and operation by enabling cost savings for long distance calls and by integrating the infrastructure and management operations. Replacing many different telephone systems with a single state-of-the-art system will improve efficiency and simplify system management and maintenance.
In addition, significant and more immediate potential savings in telecommunications costs could be realized if an audit of the state’s telecommunications bills is undertaken. [7] The following audit processes and savings are identified:- One-time audit savings—15 to 20 percent is recovered from billing errors; and
- Optimization savings—15 to 20 percent of additional savings generated by maximizing the use of discount rate plans, network optimization and more efficient use of technologies
- The Governor should direct the California Inspector General to conduct an independent audit of all telecommunication services and respective billings received by the state.
- The Department of General Services or its successor should initiate a pilot project to further test and confirm the advantages of VoIP within a statewide network infrastructure by January 1, 2005. It is anticipated that this project would take 90–180 days.
An appropriate measure of savings resulting from this one-time audit should be redirected to acquire and implement a Telecommunications Management System to control telecommunications costs and optimize the state’s network. [8]
Based on results of the pilot, the Department of General Services or its successor should coordinate the replacement of all appropriate departmental telephone systems with VoIP, using existing infrastructure components to the maximum extent possible beginning July 1, 2005.
- Integrated audio conferencing;
- Built-in caller ID;
- Flexibility and scalability;
- Better utilization of network infrastructure to leverage cost effectiveness;
- Savings in phone cost and increase in bandwidth;
- Equal or better sound quality than on traditional phone networks; and
- Network management tools that provide real-time monitoring of networks and troubleshoot problems with voice quality.
The cost of performing a pilot project is projected to be about $2,050 per pilot project location. Existing staff can be used to perform the pilot project workload.
Future regulation by the Federal Communications Commission and the state may add costs for a voice over internet protocol system. [10] This cost cannot be estimated at this time. State telephone numbers may need to be changed depending upon the current Public Utilities Commission guidelines. These costs would be minimal.
Cost savings per user is projected between $10 dollars to $40 dollars per month per line converted. The state has about 315,000 state employees, if one-half of the phone lines are converted to voice over protocol system, a potential savings between $1.6 million and $6.3 million may be realized per month. The one time cost to install the voice over internet protocol is projected to be $6.5 million in the year of conversion. Existing staff resources can be used for the conversion to VoIP.
[2] Integrated Services Digital Network is an international communications standard for sending voice, video, and data over digital telephone lines or normal telephone wires. ISDN supports data transfer rates of 64 Kbps (Kilo bits per second). Two types of ISDN: Basic Rate Interface consisting of two 64-Kbps B-channel and one D-channel for transmitting control information and Primary Rate Interface consisting of 23 B-channels and one D-channel. T-1 lines sometimes referred to as DS1 lines are a popular leased line option for businesses to connect to the Internet and for Internet Service Providers (ISPs) connecting to the Internet backbone which consists of faster T-3 connections. T-1 dedicated telephone connection supports data rates of 1.544 Mbits per second and consists of 24 individual channels, each of which supports 64 Kbits per second. Each 64 Kbit/second channel can be configured to carry voice or data traffic. Direct Inward Dialing (DID) trunk lines are incoming only and are powered by the customer which is the reverse of normal telephone lines where the telephone company supplies the power. A DID customer must supply -48 volts to provide “talk battery” and requires polarity a certain way with respect to Tip and Ring wires. Trunk lines are a communication channel between two points. It usually refers to large-bandwidth telephone channels between switching centers that handle many simultaneous voice and data signals. A circuit from a user’s terminal or PC to a network is more accurately called a line, that is, T-1 line or ISDN line, rather than a trunk, although the terms line, trunk and circuit are often used interchangeably.
[3] IntraLATA is a connection between two telephone companies within the same region. InterLATA, which is the same as long-distance service, is a connection between two local exchange carriers in different regions.
[4] E-mail from Marsha Fulton, Employment Development Department to Hway Sheen Sheu, California Performance Review (April 5, 2004).
[5] E-mail from Joan Keegan, Franchise Tax Board to Denise Blair, California Performance Review (April 5, 2004).
[6] E-mail from Joyce Griffin, California Highway Patrol to Hway Sheen Sheu (April 15, 2004).
[7] Presentation by TEOCO to California Performance Review, Information Technology Team, Sacramento, California June 10, 2004.
[8] Interview with Thomas Kins, Daniel Ianni and John Devolites, TEOCO, Sacramento, California (June 10, 2004); and e-mail from Thomas Kins, vice president and general manager, Telecom Solutions, TEOCO, to Joe Sogge, California Performance Review (June 11, 2004).
[9] Interview with Theresa Parsley, California Environmental Protection Agency, Sacramento, California (March 26, 2004).
[10] Stephen Lawson, “VoIP regulation may heat up next year,” “Computerworld” (March 30, 2004, http://www.computerworld.com/managementtopics/outsourcing/isptelecom/story/0,10801,91769,00.html (last visited June 8, 2004).