Yesterday I mentioned the Voice Peering Fabric (VPF), run by Stealth Communications, as an innovation to watch in NGN interconnection. Twice a year the VPF hosts its Voice Peering Forum. The Voice Peering Forum is a gathering of VPF customers and leaders of the VoIP industry for discussions about the future of peering applications, such as VoIP, over IP networks. I attended the last Voice Peering Forum in December 2007 in New York City and heard a lot interesting ideas and experiences about VoIP peering and new applications. Next Monday and Tuesday, June 23rd & 24th, the Voice Peering Forum will be meeting in San Francisco. On Tuesday, at 11:30am to 12:15pm, I will be participating in a panel discussing "To Couple or Decouple Routing Intelligence from SBC?". I expect it will be an interesting two days. I hope to see you there.
Showing posts with label Voice Peering Forum. Show all posts
Showing posts with label Voice Peering Forum. Show all posts
Thursday, June 19, 2008
Wednesday, June 18, 2008
Ideas for VoIP Interconnect Evolution
Like other folks involved with VoIP, we ponder how the new interconnect model for future IP services will evolve. I think we all share the same vision - open, global, peer to peer communication between any two applications on the Internet. This is the model we experience with the World Wide Web (WWW) and it works. Any browser can have a session with any web server. The technical challenge of HTTP inter-working is easy and the interconnect model is simple. The WWW business model is a broadcast model. The web site sponsors pay to have their content advertised on the Internet. It is a very simple economic model that benefits both the source (web browser) and destination (web site) of each session.
The interconnect challenge for Next Generation Networks (NGN) is much more complex. Like the WWW model, there are two different challenges: finding a technical and economic solution that encourages networks to interconnect. First, the technical inter-working challenges are much more complex. For example, VoIP, with its many features and codecs is much for complex that a typical web session. But, like all technical issues, the inter-working challenges are being overcome. The more challenging problem is finding the economic model that provides an incentive for for every network to interconnect.
The economic model for interconnecting networks for VoIP and other value added IP sessions such as video, gaming, and content distribution is much less simple than the WWW model. Many folks in the industry have advocated for a "Bill and Keep" model. In this model, the interconnecting networks bill their end user subscribers, keep all the revenue and interconnect with one another for free. There is no sharing of revenue between the networks of the calling and called parties. This simple model does have its merits, but the practical reality is that no network operators have indicated any interest in this model.
The economic model problem is simple, different applications might require more or less network infrastructure services and therefore have different costs, which may be small, but are still material for the network operators. In addition, the direction of the value exchange for session between the source and destination is unknown to the network. In some scenarios the calling party (source) is willing to pay for the entire session, in other scenarios the called party (destination) is willing to pay for the entire session. The major challenge is to find an economic model, coupled with a technical solution, that enables the efficient exchange of economic value that tracks the value of interconnected sessions. When this solution is found, NGN interconnection will flourish.
But back to the point we ponder - how will the winning model for NGN interconnection evolve? We see four possible paths.
1) Dominant Player Defines the Solution
In many industries a dominant player evolves that defines the industry wide standard. AT&T certainly did this for the US telephone network. But, today the telecom world is more competitive and fragmented than ever. It seems unlikely that a single company, or even a consortium of companies can dictate the industry standard.
2) Industry Cooperation
This is possible and we see these beginning of these efforts from CableLabs, GSMA, i3 Forum and others. But the process to define technical standards and standard practices is long and bureaucratic. In addition, since this is a global challenge, there will be competition between different interest groups which are huge, such as wireless versus wireline carriers, or the US versus the EU. This migration path is possible, but long.
3) Regulation
Mandating NGN interconnect standards is a scenario where regulators might add some value. But unfortunately regulators usually do not understand the issues, are overly influenced by the dominant players and lack innovation. It is doubtful that regulators will solve the problem.
4) Grass Roots
The last possible evolution path toward an NGN standard could from the users themselves. For example, this kind of solution could come from an open source project. Another scenario is that a group of small companies or new entrants to the industry develop a solution that works and grows to critical mass.
One possibility for the grass roots success scenario could be the Voice Peering Fabric (VPF) run by Stealth Communications. It is private ethernet network that enables VoIP peering among networks. The VPF is not a carrier and provides a neutral solution for network interconnection. The VPF provides an ENUM server to support the Bill and Keep economic model for interconnection. The VPF ENUM implementation has been successful, but the narrow appeal of the Bill and Keep model has limited its growth. We understand that the VPF will soon be providing infrastructure services that enable efficient interconnect billing settlements between peering VoIP networks. If they get the economic model right, VoIP peering on the VPF will flourish. If this happens, could the amount of network traffic using the VPF NGN interconnect model grow to critical mass and become a de facto standard before being countered by a solution from the industry giants? We will see.
The VPF is just one example of a possible grass roots solution for NGN interconnection. I am certain there are other innovators and entrepreneurs working to solve this global problem. If you know of any, I would like to hear from you.
The interconnect challenge for Next Generation Networks (NGN) is much more complex. Like the WWW model, there are two different challenges: finding a technical and economic solution that encourages networks to interconnect. First, the technical inter-working challenges are much more complex. For example, VoIP, with its many features and codecs is much for complex that a typical web session. But, like all technical issues, the inter-working challenges are being overcome. The more challenging problem is finding the economic model that provides an incentive for for every network to interconnect.
The economic model for interconnecting networks for VoIP and other value added IP sessions such as video, gaming, and content distribution is much less simple than the WWW model. Many folks in the industry have advocated for a "Bill and Keep" model. In this model, the interconnecting networks bill their end user subscribers, keep all the revenue and interconnect with one another for free. There is no sharing of revenue between the networks of the calling and called parties. This simple model does have its merits, but the practical reality is that no network operators have indicated any interest in this model.
The economic model problem is simple, different applications might require more or less network infrastructure services and therefore have different costs, which may be small, but are still material for the network operators. In addition, the direction of the value exchange for session between the source and destination is unknown to the network. In some scenarios the calling party (source) is willing to pay for the entire session, in other scenarios the called party (destination) is willing to pay for the entire session. The major challenge is to find an economic model, coupled with a technical solution, that enables the efficient exchange of economic value that tracks the value of interconnected sessions. When this solution is found, NGN interconnection will flourish.
But back to the point we ponder - how will the winning model for NGN interconnection evolve? We see four possible paths.
1) Dominant Player Defines the Solution
In many industries a dominant player evolves that defines the industry wide standard. AT&T certainly did this for the US telephone network. But, today the telecom world is more competitive and fragmented than ever. It seems unlikely that a single company, or even a consortium of companies can dictate the industry standard.
2) Industry Cooperation
This is possible and we see these beginning of these efforts from CableLabs, GSMA, i3 Forum and others. But the process to define technical standards and standard practices is long and bureaucratic. In addition, since this is a global challenge, there will be competition between different interest groups which are huge, such as wireless versus wireline carriers, or the US versus the EU. This migration path is possible, but long.
3) Regulation
Mandating NGN interconnect standards is a scenario where regulators might add some value. But unfortunately regulators usually do not understand the issues, are overly influenced by the dominant players and lack innovation. It is doubtful that regulators will solve the problem.
4) Grass Roots
The last possible evolution path toward an NGN standard could from the users themselves. For example, this kind of solution could come from an open source project. Another scenario is that a group of small companies or new entrants to the industry develop a solution that works and grows to critical mass.
One possibility for the grass roots success scenario could be the Voice Peering Fabric (VPF) run by Stealth Communications. It is private ethernet network that enables VoIP peering among networks. The VPF is not a carrier and provides a neutral solution for network interconnection. The VPF provides an ENUM server to support the Bill and Keep economic model for interconnection. The VPF ENUM implementation has been successful, but the narrow appeal of the Bill and Keep model has limited its growth. We understand that the VPF will soon be providing infrastructure services that enable efficient interconnect billing settlements between peering VoIP networks. If they get the economic model right, VoIP peering on the VPF will flourish. If this happens, could the amount of network traffic using the VPF NGN interconnect model grow to critical mass and become a de facto standard before being countered by a solution from the industry giants? We will see.
The VPF is just one example of a possible grass roots solution for NGN interconnection. I am certain there are other innovators and entrepreneurs working to solve this global problem. If you know of any, I would like to hear from you.
Wednesday, December 5, 2007
Voice Peering Forum - New York
I just wrapped up a full day at the Voice Peering Forum in New York City sponsored by The VPF (Voice Peering Fabric). There was a strong representation of service providers (AT&T, Verizon, XO, Sprint) and in a couple of sessions there was a lot of insightful discussion regarding the current and future state of VoIP peering. There is no doubt that VoIP peering is growing strongly, but it is still a small part of the total telecom interconnection market.
I think the good news for VoIP peering is that folks are starting to focus on business models for peering rather than the enabling technology. The focus on VoIP peering for the last three years has been on how to get it working for isolated interconnect cases. The initial VoIP peering concepts promoted a simple economic model of "bill and keep" (each VoIP peers bills their subscribers and keeps all the revenue without sharing with other networks involved with the call). The bill and keep model is attractive because it is simple, but it provides no economic incentive for interconnection or VoIP peering.
Now the discussion is beginning to focus on how to enable a common business model that gives all network operators an economic incentive to offer open interconnection with other VoIP networks. The general consensus is that the challenge is large and the following critical infrastructure components need to be defined for VoIP peering: route discovery, interoperability, accounting and settlement. The key question raised at the conference is when will the industry realize that VoIP interconnection is preferred over SS7 interconnection - when is the tipping point? Nobody knows the answer to this question, but for the first time I saw representatives from big incumbent carriers mulling over this problem and looking for a new market opportunity.
I think the good news for VoIP peering is that folks are starting to focus on business models for peering rather than the enabling technology. The focus on VoIP peering for the last three years has been on how to get it working for isolated interconnect cases. The initial VoIP peering concepts promoted a simple economic model of "bill and keep" (each VoIP peers bills their subscribers and keeps all the revenue without sharing with other networks involved with the call). The bill and keep model is attractive because it is simple, but it provides no economic incentive for interconnection or VoIP peering.
Now the discussion is beginning to focus on how to enable a common business model that gives all network operators an economic incentive to offer open interconnection with other VoIP networks. The general consensus is that the challenge is large and the following critical infrastructure components need to be defined for VoIP peering: route discovery, interoperability, accounting and settlement. The key question raised at the conference is when will the industry realize that VoIP interconnection is preferred over SS7 interconnection - when is the tipping point? Nobody knows the answer to this question, but for the first time I saw representatives from big incumbent carriers mulling over this problem and looking for a new market opportunity.
Subscribe to:
Posts (Atom)
