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Why Least Cost Routing Is Responsible for the Surge in VoIP Quality

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July 07, 2011

Why Least Cost Routing Is Responsible for the Surge in VoIP Quality

By David Sims, TMCnet Contributing Editor


Industry observer Dan Baker recently conducted a great interview with Neal Axelrad, CEO and co-founder of GCS (News - Alert) and veteran of the VoIP industry working with companies such as ITXC (now Tata Services) and Infiniroute (now TNS).


Axelrad talks about how VoIP is now “one of telecom’s greatest success stories.”

Baker himself credits network engineering innovation for much of the improvement, but draws attention to what he feels is “another equally important factor often overlooked: the competitive wholesale telecom market that we have, particularly in the U.S.”

As Baker says, take VoIP provider Vonage (News - Alert) as an example. They have “little to no direct engineering control over the networks its traffic rides on,” but they do have purchasing power. And when such providers use their purchasing power to route traffic, “VoIP retailers reward the wholesale suppliers who deliver traffic at the right quality and price points.”

To work so well, Baker says, the market needs Global Convergence (News - Alert) Solutions, for automating LCR (least cost routing), and he talks with Axelrad in hopes of “demystifying the art of what GCS calls dynamic route management or next-generation LCR.”

Explaining how their system feeds the routing instructions to the switches, Axelrad said it’s done using SIP, “because that’s the way the world is going. Of course, you can also accomplish the same objective in SS7 for PSTN calls... the server searches for the precise routing instructions and returns that back to the softswitch in a few microseconds.”

Decision-making has become real-time. Axelrad said, starting with general business policies like “I never want to route calls under water," or “I expect at least X quality." with policies specific to a vendor -- “route through vendor ABC, I want a margin of at least Y." Then when the call comes through, “it redirects back to the server to get route instructions.... where rules based on the current state of the network” come into play, such as “what happened to the last call I routed this way? Did the last call go through or did I get a 503 response?” T

There are literally hundreds of options like this in the system, Axelrad says, noting that “this gives the operator tons of flexibility and reporting options to work with.”

Obviously there’s a mountain of data to synchronize, as he says, and “you also need to integrate all the rate addendums -- the constantly changing price lists coming in from all your wholesale suppliers,” not to mention network mapping and telephone number analysis, an up-to-date understanding of jurisdictional data, Local Number Portability (LNP), and Mobile Number Portability (MNP).

As for the new softswitches and other network hardware -- as Axelrad says, “a good 20 percent of the work we do is around interfacing to new network element versions.”

Interestingly, Axelrad says there really isn’t a practical limit on the number of interconnect partners anymore: “I remember years ago at Verizon (News - Alert) the goal was to pare down the interconnects [mostly TDM] because of the OPEX required for each partner. So they calculated a number of $25,000 of net traffic a year. If you didn’t reach that volume, it wasn’t worth the interconnect expense. Today it’s an entirely different story.”

That’s because today, when you connect via SIP, “you’re sharing ports and not wasting capacity. So you might as well send traffic to the place that has the best quality and price. I know guys who have 400 carriers they interconnect with.”


David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Tammy Wolf







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