interconnection issues related to next generation networks

Interconnection Issues Related to NGNs

CANTO 2006 - 18-21 June 2006 – Punta Cana

INTERCONNECTION ISSUES RELATED TO

NEXT GENERATION NETWORKS

Michel Bruyère, CEOGoulet Telecom International



Overview

• Introduction – regulation of interconnection• Emergence and dominance of data• Arrival of Next Generation Networks (NGNs)• New interconnection issues

– Billing– Settlements– Systems

• The future



INTRODUCTION – REGULATION OF INTERCONNECTION



Introduction – Regulation of

Interconnection

• Interconnection is a necessary and mandatory requirement in a liberalized telecommunications environment

• Regulation aims to create a leveled playing field

• Interconnection agreement negotiation: complex task with high stakes– Even more difficult with current migration to IP

networks



Introduction – Regulation of

Interconnection• The need for regulation of interconnection

– Competition is generally recognized as key to growth and innovation in telecommunications

– Two basic principles for an efficient and competitive telecommunications sector

• The possibility for users to call anywhere, i.e. across networks

• Protection against abuse of market power

– Obligation for all operators to provide fair and equitable interconnection, for all services

• Efficient use of rare and expensive resources• Allows all users to communicate with one another



EMERGENCE AND DOMINANCE OF DATA



Emergence and Dominance of Data

• Demand spirals upward– Consumer IP services increasing

• Web, email, messaging, voice, multimedia

– Business IP data services expanding• Replacement of leased lines with IP VPN• Growth of broadband access and applications• Emails

– Business IP voice service, a displacement of traditional PSTN services

• VoIP, FoIP, voice messaging



Most popular servicesWeb surfing

Sending & receiving email




Most popular servicesInternet telephony

Internet chat




Most popular servicesNetwork news (a.k.a. RSS feeds)

Web sites




Most popular servicesContent hotels for streaming data Distribution and retrieval of information

– Stock quotes– Breaking news reports– Sport scores– Feeding data-warehoused info to personnel and

customers




Most popular servicesVirtual Private Internet (VPIs)• VPIs are extended intranets

• Virtual Private Wire service

• Virtual Private LAN service

• IP LAN-like service




Future servicesMultimedia telephony

Multimedia conferencing = interactive, live sharing of audio, video and desktop applications

Rich media data streams - carry voice, video, and application data for end users, to make conference calls, view live or streamed video, share application data with others, listen to voice mail or view video email, conduct instant messaging with colleagues, etc




Future servicesUnified messaging

– Email, voicemail, fax, SMS All within a unified mailbox and alert system Single delivery, single repository, single access, single

notification




ARRIVAL OF NEXT GENERATION NETWORKS

(NGNs)



• Internet realities– Internet traffic roughly doubling every year– Voice traffic growing at 5% per annum– VoIP growing 40-80% per annum– However, Internet does not dominate global

communications in market size, number of users, traffic– Internet a small fraction of global network infrastructure:

telephone, satellite, radio, TV, private networks– Internet revenues growing at 17% per annum, phone at

6%: will take 15 years to surpass phone revenues– ISP revenues < 5% of total communication revenues– Internet users worldwide 800 million+

Arrival of Next Generation Networks

(NGNs)




(NGNs)• Key drivers transforming telecom business to IP

networks and services:– Telecommunications business is becoming information-

based– Data communications exceeding voice worldwide– Circuit-switching optimal for voice communications– Packet-switching optimal for most data communications– Internet becoming the ‘all’ communications network– IP packet-switching protocol is basis for Internet– Major operators are merging their communication

networks into one ubiquitous IP packet-switched network carrying all forms of communications




(NGNs)Innovation

Accountability

InternetFlexible and

easy to innovate

without viable financial model,

security, and QoS

InternetFlexible and

easy to innovate

without viable financial model,

security, and QoS

PSTNRigid and hard to innovate but with viable financial model, security

and QoS

PSTNRigid and hard to innovate but with viable financial model, security

and QoS

NGNFlexible, easy to

innovate with viable financial model, security

and QoS

NGNFlexible, easy to

innovate with viable financial model, security

and QoS

source: Telarix




(NGNs)• Next Generation Network – ITU definition

– A packet-based network able to provide telecommunication services and able to make use of multiple broadband, QoS-enabled transport technologies and in which service-related functions are independent from underlying transport-related technologies

– Enables unfettered access for users to networks and to competing service providers and/or services of their choice

– Supports generalized mobility which will allow consistent and ubiquitous provision of services to users




(NGNs)• Operators are investing in NGNs to compete with

Internet• NGNs are being deployed• Convergence is happening• NGN interconnection settlement model cannot

follow traditional PSTN or Internet models



NEW INTERCONNECTION ISSUES



New Interconnection Issues

• General issues– The interconnection between legacy circuit-switched

networks and new IP packet switching networks - every conversion between the Time Division Multiplexing (TDM) and IP domains introduces delay and distortion, which result in poorer voice quality

– Additional levels of interconnection required between the basic backbone IP packet network and many more new competitive players

– The push to open interconnection standards at all points and levels of technical interconnection

– The increasing regulatory liberalization for interconnection




• Interconnection model in PSTN:– Calling Party’s Network Pays (CPNP)

Originating Network

Originating Network

Retail $

Terminating Network

Terminating Network

Wholesale $

source: Telarix




– Peering• Carry traffic to each other• No obligation to carry

traffic to third party

– Transit• Carry traffic on behalf of

another party• Carry traffic to a third

party

Backbone Provider

Backbone Provider

Ret

ail $

Backbone

Provider

Backbone

Provider

Who

lesa

le $

ISPISP ISPISP

Who

lesa

le $

Ret

ail $

• Interconnection model on Internet

source: Telarix




• Inter-operator settlement issues– Content-based pricing

• How to price actual content, not usage or transport?

– Tele-management• Continue to bill on the basis of duration or volume?

– Inter-operator billing systems• How to handle the increasing number of partners and

complexity of business transactions?

– Reconciliation and reporting• How to deal with increased traffic from IP data?




• Inter-operator settlement issues– Call analysis

• How to analyze these new IP events coming from a variety of data network services?

– Automated reconciliation• What units to use?• What file formats to use?

– Inter-operator settlement agreements• How to handle arrangements between more than two

providers involved in a given transaction?

– Clearing houses (iNOW, OSP)




• International settlements– Traditional ITU method

• Long delays• Based on traffic declaration

– Full invoicing• Shorter delays in getting paid• Road blocks:

– Management of traditional transit– Local taxes could be applicable– Costs of change

» Staff» Systems




• International settlements– Market evolution:

• New services and technologies (i.e. NGNs) will probably be built assuming “invoicing model” will apply

• New market entrants do not want to invest in billing systems that cope with a complex model (ITU) and its financial implications

• Increased market volatility and risk argues for faster payment



THE FUTURE



The Future

• A separation of service provision and connectivity• NGNs that support new services and third party

services over network boundaries• Easy provision of new and third party services - the

deployment of NGNs provides an excellent opportunity to agree on improved interfaces to enable service providers to interconnect and cooperate in the delivery of services



The Future

• A variety of charging schemes: transport- or usage-based, content-based, hybrid, etc

• The adoption of hybrid and different settlement methods: peering (sender keeps all) between providers of the same service, invoicing to third party service providers, etc

• Class-based rather than service-based measures to improve quality

• New regulatory policies that recognize the freedoms inherent in NGN architectures



The Future

• Interconnection between operators that allows the provision not only of today’s and tomorrow's voice, data and multimedia services, but also of an unlimited range of new applications and services limited only by human imagination



Thank You!

• About Goulet Telecom International:– Canadian company assisting telecommunications

organizations worldwide to face the specific challenges of the global competitive environment by providing a wide array of business solutions, consulting expertise and training services

– Areas of expertise:• Strategy & Management• Marketing & Sales• Engineering & Operations • Finance• Human Resources• Policies & Regulations

– www.goulet-telecom.com



Contact Information

Michel BruyèreChief Executive OfficerGoulet Telecom International Inc.666 Sherbrooke West, Suite 1000Montreal, Quebec H3A 1E7CanadaTel.: +1 514 281 1211Fax: +1 514 281 [email protected]

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