TMCnews Featured Article

A limited FCC (News - Alert) trial which gives VoIP providers direct access to telephone numbers is now underway. The results could lead to a permanent change in policy.

Just consider the many steps involved in the test. Under the trial, some providers received a new Operating Company Number (OCN) from the National Exchange Carrier Association (NECA). Others used their existing OCN. They then applied for blocks of telephone numbers from the North American Numbering Plan Association (NANPA), which were placed in databases. VoIP providers could then route traffic to and from the PSTN (public switched telephone network) to their customers. VoIP carriers tested numbers in each LRN (Location Routing Number).

Vonage (News - Alert), SmartEdgeNet, WilTel Communications, IntelePeer and Millicorp are all taking part in the test. Vonage is further along in its test and has already reported some of its experiences. For instance, Vonage reported a dispute with CenturyLink. It told Vonage it would only exchange traffic with Vonage if Vonage purchased dedicated TDM trunks in Phoenix and entered into an agreement with CenturyLink for the exchange of TDM traffic. In response, Vonage terminated the trial in Phoenix, where CenturyLink is located. It chose instead to port 30,000 numbers in Atlanta and Boston.

Overall, there are many issues the FCC wants to review based on the test results. Among those identified in a recent white paper from TransNexus (News - Alert) include: Will phone numbers be exhausted in select area codes? Also, what impact will there be on intercarrier compensation, number porting or VoIP interconnection?

There are also concerns relating to VoIP peering. VoIP peering is a method by which VoIP calls can be forwarded from an Internet telephony service provider (ITSP) to another ITSP via a direct IP-to-IP connection. 

Currently, interconnected VoIP providers obtain telephone numbers by paying for services from a competitive local exchange carrier (CLEC) – which acts as a middleman, TransNexus explained. 

“What the VoIP providers are requesting from the FCC is simply the ability to leave out the middle man CLEC,” the white paper adds.

“By eliminating the need for many of the middleman functions, VoIP peering will dramatically change the role of wholesale service providers in the interconnection process, as well as the role of retail service providers for enterprises,” TransNexus continued. “VoIP peering provides the vehicle to expand advanced services and features beyond the service provider networks.”

However, the CLECs have a different view. 

"The one thing to understand is that the need for the CLEC that has the PSTN infrastructure doesn't go away because you can get numbers issued directly to you," said John Abraham, senior vice president at Shango (News - Alert), a wholesale communications provider, quoted by the white paper. “Their physical network facilities are still going to be critical to delivering service. So the reality it the VoIP guys will still need CLECs, but they will need them a little less."

In addition, Jim Dalton (News - Alert), president of TransNexus, said VoIP peering is already being done now. “We have customers peering within private networks already using the TransNexus OSPrey routing server,” he explained. “Direct access will move peering out of private networks and into the public network."

Looking at the big picture, what are some of the benefits of direct access? Two more obvious ones are lower costs and improved efficiency. For instance, providers will find it easier to exchange traffic. There will also be less need for third-party providers. There will be increased innovation, too. There also could be more offerings such as advanced VoIP services and features, with video and high-definition audio.

Still, there are some reasons why direct access for VoIP providers is not the right path to take. The opposition tends to come from CLECs. Exhausting numbers in certain area codes could hurt consumers and businesses. Remember, too, taht machine-to-machine (M2M) communications and devices will lead to increased demand for numbers. There are other related worries that interconnected VoIP providers will want LRNs in rural locations, which may lead to many numbers never getting assigned to customers because they are assigned in blocks in these less-populated regions.

But, this issue may have a solution. The FCC wants interconnected VoIP providers to get numbers “directly from the numbering administrators, and to comply with the same numbering requirements and industry guidelines as carriers. To address the concern of number exhaust in rural areas, the FCC granted state commissions the authority to limit numbers for interconnected VoIP providers to rate centers subject to number pooling,” the white paper explains.

There are concerns about call routing, as well.  Carriers may not know where to route calls, which in turn could negatively impact emergency services and confuse consumers. But this, too, has a solution. The white paper points out how VoIP providers can now access numbers and the PSTN via CLECs.

When it comes to finding the lowest-cost method, TransNexus highlights the technique whereby a service provider finds the LRN which belongs to a VoIP service provider with whom there is a VoIP peering agreement. In this way, the service provider avoids the PSTN and the call gets to the VoIP service provider via IP.

Looking ahead, there is a clear advantage when it comes to cost savings. Vonage CFO’s Dave Pearson predicted in July, “If the proposed rules are adopted, that will facilitate the shift to direct IP-to-IP interconnection and enable long term structural cost savings in the double digit millions of dollars in the subsequent two to three years.”

Time will tell if the FCC agrees with VoIP providers who want direct access to numbers.