True Ups Kill the Partner

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

True Ups Kill the Partner

I just received news that tw telecom will be truing up my account. It will be a nice 4 figure pinch - going back to March 2013. I understand that the account had a billing adjustment, but a true up for a year ago???


As it turns out that isn't so bad. Ma Bell has been hitting their channel partners with a wrecking ball called True Up. (True up means that the carrier re-examines billing in order to insure that the agent wasn't overpaid. In my life, I know of no story where it resulted in more commission despite the history and aptitude that AT&T has for over-billing and erroneous billing.)

My sources tell me that at least one partner is going out of business. Another partner was hit with a - wait for it - $1.4 million true up bill. Yet another with a $250,000 bill. (My four figures looks puny in comparison.)

Here's the problem: the master agents pay their sub-agents and referral partners (I have a referral partner in the twt case that I pay.) Now a year later you get trued up and the carrier takes the money directly from your next check. The master has to go back to collect it from the sub-agent - who may or may not have any future earnings with the master. So the master may be out the whole enchilada instead of its percent of the enchilada.

Ma Bell is going back 3 years!!! There has to be contract language or a business law somewhere that makes that kind of reach back into history unavailable. It's not like AT&T is giving credits back to the customers going back to 3 years!

The way AT&T and VZ treat the channel (and InterNAP and a few others), I wonder why people stay tied to them. Sure there is demand, but they always find a way to screw the agents making big checks. Always. #beentheredonethatandmyassstillhurts.

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