Dave Overton

A very interesting Bill was recently introduced to the US House of Representatives: the US Call Center Worker & Consumer Protection Act. The Bill states:

To require a publicly available a list of all employers that relocate a call center overseas and to make such companies ineligible for Federal grants or guaranteed loans and to require disclosure of the physical location of business agents engaging in customer service communications. 

Thanks to my English teacher I didn't make it past the first line, take a look again:

To require a publicly available a list of all employers

One should not expect that Bills introduced to the House of Representatives might have been proofread.

The Bill seems aimed to target outsourcing call center operations and penalize businesses that would move call centers outside of the United States by listing them and making them ineligible for Federal grants or guaranteed loans. 

I am not familiar with Federal grants or guaranteed loans that businesses could be granted, however I agree with the premise that Federal funding does not seem best suited to build offshore call centers. 

In principle I am not opposed to outsourcing call centers, in fact I see call center employees daily here in Cebu City. I have witnessed the developmental effect that they have had on cities in the developing world. They have provided thousands of jobs within Cebu City, which allowed American (and other international) businesses to save thousands (millions) of dollars on operational expenses which may or may not have been appropriated properly from a shareholder's standpoint. In addition, I know that outsourced call centers have also had an effect on small to medium sized enterprises (SMEs) by allowing them to expand or create customer service operations in a cost effective manner.

In addition to the ineligibility of Federal funding, this Bill could be interesting for a few business types.

SMEs

• NOTICE REQUIREMENT:
  • (A) IN GENERAL.—Not fewer than 120 days before relocating a call center to a location outside of the United States, an employer shall notify the Secretary of such relocation.
  • (B) PENALTY.—A person who violates sub-paragraph (A) shall be subject to a civil penalty not to exceed $10,000 for each day of violation. 

One should certainly be on top of Notifying the FTC prior to relocating, a $10,000 per day maximum penalty is intimidating.

• TRANSFER TO U.S.-BASED CUSTOMER SERVICE CENTER.—A business entity that is subject to the requirements of subsection (a) shall, at the request of a customer, transfer the customer to a customer service agent who is physically located in the United States.

This requirement could be complicated as it in essence stipulates that you have a customer service agent physically located in the US. If you have outsourced your entire customer support, you may need to reconsider.

Generally, the Bill would make outsourcing call centers more complicated for SMEs.

JPMorgan Chase

I know that they have currently outsourced at least part of their call center operations to Cebu City & that they at one time received Federal funding during the financial crisis of 2008. They were also one of the first to repay the bailout. If we presume that JPMorgan was in part, able to pay the bailout money thanks to outsourcing we might need to reconsider if this Bill is in fact worthwhile.

Outsourcing can be a good solution for businesses, I personally feel that maintaining a strong and direct connection between your business and your customer is one of the smartest things you can do. I therefore think that even if you outsource your customer service, it should be outsourced as part of your business entity and not to a third-party. Outsourcing also has risks and drawbacks, remember that just because something is cost effective, does not always mean it works better in the long run.

To the Representatives who have authored the Bill - I hope you realize that it is not just call centers that are being outsourced, in fact many business processes have already been outsourced (hint: Google "BPO"). I suggest you contact these BPOs next time you have a Bill for submission, at least then someone will proofread your work.

In the local market, I have seen an incredible competition arise for qualified agents in which call centers are competing with each other to recruit talent. This has driven the call center agent's salaries up and in the mid to long term will have a considerable negative impact on the overall cost effectiveness of outsourcing. Outsourcing has certainly lifted the experience, expertise and exposure within the local market. I personally hope that this Bill will serve as a wake up call for the Philippines. We cannot simply rely on outsourcing alone (or for that matter any single economic driver: OFWs) as the sole development agent of the country. Outsourcing has laid an incredible foundation to build upon and I am optimistic that new businesses are going to spring up. The government should invest in infrastructure and an environment that will allow these new startups to succeed.

I am currently working on convincing call center agents with great ideas to stop working for the Man and to startup their own companies. If you have a great idea or want to help this next step of development I'd love to hear from you - email me.

Full House Bill: http://e-lobbyist.com/gaits/text/365010

In addition to my previous post about FaceTime, I had another realization today.

People have been dreaming about video calling for decades. iPhone 4 makes it a reality. With the tap of a button, you can wave hello to your kids, share a smile from across the globe, or watch your best friend laugh at your stories — iPhone 4 to iPhone 4 over Wi-Fi. No other phone makes staying in touch this much fun.

(emphasis mine) This not only changes the way we think about and use Video Calling, it changes the way we think about and use International Calling. This isn't a new concept, this has been the premise of Video Calling and VoIP for a long time. The difference is the implementation. Skype revolutionized Video Calling from a computer, and while they do have mobile apps the implementation has never been on option within a Carrier based call. No switching in the middle of a call. No switching from Carrier minutes to megabytes (even if it is Wifi only at the moment). Pretty much the same conclustions for VoIP, Vonage and others have revolutionized the cost structure of traditional phones. They also have apps for mobile devices, but again you are limited to calling from within their app and not via a Carrier based call. The exception to this rule has been Google Voice, which Google has implemented very well in the Android OS, and if you are a Google Voice user, you can opt to use Google Voice for the call. The one stark difference that remains is that Google Voice still relies on Carrier minutes, not megabytes. So both Google and Apple have now been able to push the Carriers in the direction that they want through these implementations. The Carriers have long suspected that Google has been out for them, however it appears that Apple may have really been the company they should have worried about. Depending on how the charges work out, this could dramatically affect the Carrier's current charging scheme which is minutes centric. As Dan Frommer reported:

For the next version of FaceTime that works over 3G, Apple and its carrier partners will need to decide how those calls are billed -- as minutes toward voice calling, as data toward monthly data caps, or both, or something entirely different.

For example: From the Philippines, if I dial a number in the US from my cell phone I will be charged around $.40 per minute. If I switch the call to FaceTime, it's free, because when you switch in the midst of a voice call, once the FaceTime call initiates, the voice call ceases. The caveat is that this requires an iPhone 4 on both sides of the call, as well as a WiFi connection, for now. Early estimates are predicting some 1.5 million sales on the first day alone. That number will continue to rise as the iPhone is released around the rest of the world. I predict that the next iPad will have a FaceTime feature, albeit slightly different, as well as implementation in either iChat and/or OS X. So theoretically speaking, by the time the iPhone 4 reaches the Philippines, there will be plenty of people for me to FaceTime with. The switch from Carrier minutes to megabytes is now in full swing. Will the carriers allow FaceTime to be opened up using their cellular data networks? Will another alternative arise that will give data connections to devices in a broad coverage area? I look forward to the improvements that are made in these areas. Again it seems very ironic, if not foreboding, that Carriers are adapting to a more limited model for data charges. Whatever these developments are, my point is that this will revolutionize Video Calling & International Calling, at least for my friends and family who get an iPhone.