Tales from ITC: Voice Peering

These days, most VoIP calls travel—at least in part—over traditional phone networks. This is expensive and unnecessary.

By Mark A. Miller | Posted Oct 18, 2006
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Remember the days when the term bypass was a hot buzzword? The idea behind this concept was to set up some type of private network connection between two company locations, bypass the local phone company, and in doing so, bypass their circuit charges as well. These private circuits may have been as simple as a connection between two buildings in a campus arrangement, or as complicated as a circuit from your network hub to your long distance provider, jumping onto their network, and then jumping off again in a distant location. In either case, some additional networking gear was required to make the physical connection, such as private microwave, infrared, or customer-owned fiber optic link, so that you could officially bid adieu to your local telco.

Fast-forward a couple of decades. Carriers and enterprises alike, which share a need to transfer voice traffic between two or more locations, are setting up peering arrangements. These network connections bear some resemblance to the bypass arrangements of the past, in that they provide for the private, direct exchange of traffic between two parties. And since the term peer means equal, each network is on an equal footing with the other in the exchange of traffic and other information – but more on the technical nuances later.

Last week’s Internet Telephony Conference and Expo in San Diego was the venue for a full-day workshop on Voice Peering, hosted by the Voice Peering Fabric.

Imagine a high speed Ethernet network, with hub locations around the globe, to which subscribers can connect and exchange their VoIP traffic. If you can get your mind around that concept, you are starting to catch the vision of Shrihari Pandit, President of New York City-based Stealth Communications, Inc., which operates the VPF. The VPF was launched in October 2003, and designed as a distributed, Layer 2 Ethernet network. By the end of 2005, the network was installed in nine cities across the United States plus London, England, and carried 18 billion minutes of VoIP traffic. Projections suggest that by the end of 2006, traffic will reach over 100 billion minutes. In addition, the VPF's Electronic Number (ENUM) registry holds over 18 million numbers, and processes over 200 million calls annually. So it certainly looks like this peering concept is catching on.

With any new ventures, there are a number of business and technical concepts that must be ironed out, and these were explored in depth at the various workshop sessions. They include: business and economic factors driving peering; technical issues – such as address and telephone number lookups; signaling (SS7) and database (411) services required to facilitate call operations; and infrastructure elements – such as session controllers and gateways – that become the building blocks of the peering network.

From a technical perspective, two different types of peering arrangements are possible: VoIP Peering, where the call originates on a VoIP device, such as a softphone, and stays IP all the way to its destination; and Voice Peering, where the call originates in a traditional (TDM) telephony environment, such as an analog PBX, and then is converted into an IP format at a gateway, transmitted via an IP network to another gateway and/or PBX, and eventually delivered to a voice destination.

From a business perspective, the financial relationships between peering parties have their roots in traditional telephony, in which one carrier would pay another to terminate a call. In other words, if Carrier X’s customer wants to call a Carrier Y customer, there has to be some agreement between the two carriers to establish the physical connection, collect the toll charges from the calling party, plus sharing that revenue between the two carriers, since both had a hand in the transaction. In a similar fashion, two different types of business arrangements could exist between VoIP peers: Bilateral VoIP Peering, an agreement between two carriers for connections and call terminations (much like the traditional arrangement); and Multilateral VoIP Peering, a service within a peering exchange, where all the members agree to a set of rules whereby traffic is exchanged at no cost.

Both of these options are available to VPF members, which read like a Who’s Who in the VoIP carrier business, and include AT&T Wholesale, China Telecom USA, iBasis, IDT Corporation, Litespan, Net2Phone,Inc., Packet8, Telecom New Zealand, Verisign, Inc., XO Communications, and many others.

In addition to the peering relationships that the various members establish, three other business arrangements can be brokered through the VPF.

  • The VPF Minutes Market enables members to buy and sell either origination or termination services directly between themselves, with no third parties involved in the transaction. Members post their available routes and destinations, allowing those seeking connections to search for the optimum volume and pricing arrangement.
  • The ASP Market allows members to simplify and reduce the costs associated with accessing database applications, such as 411, 911, 8xx, and so on, by connecting applications service providers with the carriers needing access to their information.
  • The VPF ENUM Registry maps telephone numbers to Internet addresses, known as Uniform Resource Locators, or URLs. This function is based upon the IETF Standard RFC 3761, which uses a look-up architecture based upon the Domain Name Service (DNS).

As VoIP traffic grows worldwide, the opportunities for peering relationships, both between carriers, and between private organizations, such as manufacturers and their suppliers, are likely to grow as well.

Copyright Acknowledgement: © 2006 DigiNet ® Corporation, All Rights Reserved


Author's Biography
Mark A. Miller, P.E. is President of DigiNet ® Corporation, a Denver-based consulting engineering firm. He is the author of many books on networking technologies, including Voice over IP Technologies, and Internet Technologies Handbook, both published by John Wiley & Sons.

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