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A Note on Peering and NGNs

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May 04, 2009

A Note on Peering and NGNs

By Richard Grigonis, Executive Editor, IP Communications Group

“Peering” is a huge term that encompasses everything from carriers trading minutes at interexchange nexus points and collocation “carrier hotel” facilities (such as those provided by Telx), to extranet-like enterprise corporate intranets that allow access by trusted outsiders such as suppliers, partners and most-favored customers, resulting in “federated” data among a “federation” of peers, with transport provided by private lines or Layer 2 connections to an ISP or peering service provider. Such later types of peering conceptually intrudes into the practice of “SIP Trunking”. Many VoIP networks are too small to justify VoIP peering, so calls from one VoIP network to another VoIP network at some point are down-sampled and routed through the PSTN (that will taper off as the PSTN slowly disappears).

At our sister publication, INTERNET TELEPHONY, VoIP Peering (News - Alert) columnist Hunter Newby makes a further between VoIP Peering and Voice Peering: “VoIP Peering is where a call originates as IP, is transported as IP, and terminates as IP. Voice Peering is where a call either originates as TDM, terminates as TDM, or both, but is converted to IP in between for transport (provisioning) purposes. Since true IP-to-IP calls are, in the big picture of total calls, few in number these days, it is a popular belief that most peered calls are actually voice peered. This assumption will change over time, of course.”
Perhaps the most famous peering company is Stealth Communications (News - Alert), whose Voice Peering Fabric (VPF) enables VoIP peering in that one provider can plug into one city location and another carrier can plug into another location in another city, with the VPF linking the two cities. It carries VoIP on Layer 2 (carriers connect to a separate private network) or on a layer 5 basis (peering occurs on open networks such as the Internet, with routing and signaling managed by a central provider).
One next-gen network service provider, Mzima Networks, offers providers both performance-optimized connectivity and 10 Gbps Ethernet data transport services in colocation facilities in the U.S. and Europe. Interestingly, they cater to Tier-2 providers. That’s because many Tier-2 ISPs can’t meet Tier 1 peering requirements, so they tend to build around the edge of the network, leaving Tier 1s interconnected with each other in the central network core. This “donut network” thus became an asset of key Tier 2 providers since it enables them to interconnect amongst themselves directly, bypassing the core. A consequence of this is that Tier 2 providers can now deliver high quality service more efficiently than traditional Tier 1 providers by bypassing congested network areas.
For providers, there are two extreme forms of non-PSTN VoIP Peering: 1) “Pure” IP peering, which connects one, two or N-number of networks together to enable IP packets to flow in Layers 2 and 3, which is where Ethernet and IP routing can be found; and 2) IP peering in an end user-to-end user situation (e.g. PC-to-PC or video phone-to-video phone) where the application handles everything and you can thus eliminate the carrier or service provider “middleman”, along with any central control, a model that may be a bit too fast-and-loose.
In the middle of these two extremes can be found companies such as XConnect (News - Alert), operating between service providers or carrier-to-service providers. XConnect’s ENUM (Telephone NUMber Mapping or Electronic NUMbering) registry and Peering Federations enable service providers to intelligently route their calls by allowing them to distinguish among different types of traffic on a call-by-call basis, including end-to-end VoIP sessions, mobile and fixed-line termination. XConnect’s flexible infrastructure enables operators to join multilateral peering relationships with over 400 carriers worldwide. Service Providers can choose peering and commercial policies, ranging from settlement-free, pay-by-call, or pay by the minute models based on their preferences. As the XConnect ENUM registry grows, participating service providers can complete an increasing percentage of outbound off-network calls as sessions to other members of their federations, with the remainder routed to mobile and fixed line networks.
The key benefits of XConnect’s peering and ENUM services for operators include reducing off-net termination costs; increasing quality of service; more efficiently managing their VoIP Interconnects; and delivering enhanced IP Communications services on a cross-network basis. XConnect and its partners operate peering solutions on either a managed service or hosted basis.
To Settle or Not to Settle?
At Tata Communications (News - Alert), Jeff Bak, Marketing Director for Tata’s Mobile and Enterprise space, says, “In terms of peering in the carrier space, at a high level, we are working on becoming a peering provider for what I’ll call retail service providers, which I define as anybody who has a direct retail franchise that is serving an end resale customer. That customer can be an enterprise or consumer. So mobile operators are a retail service provider. Cablecos, ISPs, Skype – anybody that captures a retail customer, business or consumer. We define our success over the long run as moving up the value chain and getting as close to these retail service providers as possible. In particular, that’s part of my focus, both in the mobile and enterprise space. I’m all about getting direct business from mobile operators, particularly voice, obviously, and also from enterprises. Sometimes enterprises are still dealing with a systems integrator or something like that, but at the end of the day you do own a relationship with an end enterprise.”
“From a carrier perspective I look at two areas for peering,” says Bak. “Carrier-to-carrier peering as well as peering for a retail service provider. Carrier-to-carrier peering depends on how you define peering. Many people define peering as an exchange of minutes where you’re not settling up for those minutes – it’s the equivalent of IP peering. What carriers are primarily focused on right now is exchanging minutes as VoIP, but under the same commercial models that they always have had. There’s no big push from a carrier perspective to do peering per se in terms of, ‘Hey, let’s just connect and engineer our interconnect to work with high quality and security, and so forth, and let’s just not worry about settling up regarding the minutes we exchange with each other.’ Carriers are still very much in the wholesale voice business and so it’s not really in their best interests to do that. They’re still going to settle up on a permanent basis with each other, and maintain their mutual bilateral relationships. The focus from a carrier-to-carrier perspective in terms of ‘peering’ really is on migrating our TDM-based existing bilateral relationships and connectivity to VoIP technology. That’s something that in particular the i3 Forum is focused on – it’s a forum in which we play an integral role. We’re very interested in ‘pushing the envelope’ in terms of carrier-to-carrier internetworking to VoIP, because of its inherent benefits from a flexibility and cost perspective, and so forth.”
“I came from a carrier view, migrating to a model where you’re peering and just letting minutes go across each other’s network is not something that I see in the near future, and, quite frankly I’m not sure in the intermediate future,” says Bak, “because carriers are still working their same business models and they still play a valuable role, one that is sort of in the middle, between bridging those retail service providers.”
“Now when you turn and face the retail service provider market, it’s a different story,” says Bak. “We already have a couple of products that are there to try and facilitate and offer a peering vehicle to retail service providers that are interested in actually peering with each other,” says Bak. “One product that we have is called Mobile Direct. It’s essentially an early version of a peering service between mobile operators. That service targeted us as an intermediary third party carrier in the middle of things, providing transparent and high quality transit between two partnering mobile networks. By doing that we’re making sure that some of the proper signaling information and so forth goes through transparently, which you don’t necessarily get in the traditional wholesale hubbing model. Each of those mobile operators commits to send 100 percent of its traffic that’s destined for that other country’s mobile network through this service and once they’ve done that they’ve essentially enabled seamless roaming between their networks. So when you travel from the U.S. with a GSM phone over to Europe, people call you from your home network and you may owe for a Calling Line Identity [CLI]. If you don’t answer the call, that call gets sent back to the home network’s voicemail system and it actually goes into the user-specific mailbox rather then enter some generic menu that asks ‘Please the subscriber’s number’ and so forth.”
“We also have a service targeting the broadband space called VoIP Peering and it’s really the same concept as Mobile Direct, except that the Mobile Direct version still relies on settlement of minutes between the two partners,” says Bak. “The broadband offering has more of a mindset along the lines of IP technology, and that service in general is more about just facilitating the transport of minutes between two partnering carriers, and it’s more likely that those partnering cablecos or ISPs are going to not worry about necessarily settling up with each other.”
“So we at Tata Communications plan to play a very active role in trying to facilitate peering and transiting in all its forms, whether it’s the full extreme of peering where you don’t settle up on minutes, all the way to just VoIP-enabled interconnection models that really support or emulate the same commercial models of today. We hope this will be a major part of our success going forward.”

Richard Grigonis is Executive Editor of TMC (News - Alert)’s IP Communications Group. To read more of Richard’s articles, please visit his columnist page.

Edited by Stefania Viscusi

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