A rate center is a particular geographic area that is crucial for businesses that rely on telephone services, whether they use traditional PSTN (public switched telephone network) or make calls over the Internet with VoIP (voice over Internet Protocol). These centers outline the rules for local calling, billing, and assigning phone numbers. Basically, they determine whether a call is local or long distance based on its origin.
By becoming familiar with rate centers, you can choose your phone numbers more carefully. Basically, you can use this knowledge to make sure your business appears local and accessible to customers, which means they're more likely to want to work with you.
It also prevents your customers from facing long distance charges, which is especially important if your business involves regular telephone interactions.
By strategically aligning your communication channels with customers' needs, you can make them happier while reducing costs on both sides of the phone call.
Understanding rate centers
Rate centers are particular areas that help telephone companies figure out how to arrange and charge for calls. Each rate center is like a neighborhood for phone calls. If a call is made within this neighborhood, it is generally considered a local call and has its own set of charges.
These are the key terms you need to know:
- Local Exchange Carrier (LEC): These are the phone companies that handle your local calls. They are in charge of the telephone lines in a certain area.
- Local Access and Transportation Area (LATA): This is an area defined by the government. Decide where telephone companies can provide their services.
Fare centers are often named after the places they serve, such as a city or town, making them easy to identify. They also have specific physical locations, marked by coordinates, which are essential for accurately billing calls.
The combination of area code (NPA) and prefix (NXX) further identifies the location of a rate center and the telephone numbers associated with it. The area code is the three digits dialed before a telephone number and the prefix is the three digits after it. Together, they help identify the location of the rate center and the phone numbers that belong to it.
Let's use Seattle as a real-world example to better understand how fare centers work. Seattle is a large city with many different neighborhoods. Think of each fare center as a separate neighborhood in Seattle. Each neighborhood (or rate center) has its own rules for how phone calls are made and charged.
Some calls may be local within the same rate center, but may be long distance if they cross to another rate center. This is essential for businesses that rely heavily on telephone services. It helps them understand where they might be charged more for calls and how to choose their phone numbers wisely.
Business implications of rate centers
For businesses using traditional telephones, rate centers play an important role. For those using business phone services that work over the Internet (i.e. VoIP), rate centers play a smaller role, but are still relevant.
I'll first cover the implications for traditional phones and then we'll look at the implications for VoIP phone systems.
Choose phone numbers strategically
Selecting phone numbers at specific rate centers can reduce call costs or improve customer engagement. For local businesses, such as retailers or restaurants, having a number in the same rate center as most customers means they can reach you at local rates, which is attractive to those who prefer local interactions.
In contrast, online companies, which typically attract customers nationally or globally, may prioritize different aspects of telecommunications services.
Understand the benefits of toll-free numbers
Toll-free numbers offer a unique advantage in that they are not limited by geographic rate centers. This makes them ideal for businesses looking to attract a broader customer base, such as online education platforms, telehealth services, or any business looking to achieve national reach. Customers can call these numbers without long distance charges, regardless of their location in relation to your business.
SEE: Learn more about toll-free and local numbers.
How to navigate number portability with rate centers
When you move your business phone number from one carrier to another (a process called number porting), rate centers play a crucial role. This process can vary significantly between PSTN and VoIP solutions.
If you are transferring an existing phone number to VoIP, the new provider may not support the rate center of your old number. This could prevent you from keeping your current number. Be sure to check with the new provider to see if they support your current rate center before making a switch.
Review number assignment periodically
The telecommunications landscape is constantly changing. New rate centers may emerge and providers may update their services. It is a good idea to periodically review your phone number assignment. This ensures your numbers continue to serve your business needs effectively, whether saving call costs or maintaining local customer engagement.
VoIP and rate centers
While a landline relies on rate centers to determine call routing, billing, and assigning phone numbers based on physical geography, VoIP operates with much more flexibility.
VoIP providers use rate centers to assign numbers with specific prefixes and area codes. This allows businesses to choose numbers tied to particular geographic locations, even if the business itself is not physically present there.
This feature is especially useful for establishing a local presence virtually. For customers, the geographic association of a number, defined by the rate center, can affect their willingness to call or view the business as local and accessible. A VoIP number linked to a local rate center can improve customer confidence and accessibility.
Importantly, VoIP avoids traditional billing structures tied to rate centers. Calls are routed over the Internet rather than through physical exchanges, eliminating long distance charges and offering greater profitability for businesses and their customers.
SEE: Learn more about the differences between a landline and VoIP.
How to find a rate center
Finding the rate center for a particular geographic area is relatively easy thanks to several online tools. These tools allow you to enter specific information, such as a phone number or geographic details, to determine the associated rate center. Some popular tools include Local Calling Guide and North American Numbering Plan Management.
If you already have a phone number, enter it into the search tool to find your rate center. If you don't have a specific number, knowing geographic details (such as city, state, or area code) can help identify the appropriate rate center.
These online resources allow you to easily find the rate center associated with a phone number or geographic area. This information is useful for making strategic decisions regarding purchasing phone numbers, understanding billing implications, or planning for number portability.
