Abstract
Until recently, virtually all voice over IP (VoIP) networks, carrier or
enterprise, interconnected via the circuit-based public switched telephone
network (PSTN), with VoIP calls transcoded into time-division multiplexing
(TDM) circuits. While this remains the dominant case, over the last few years
many providers have begun to interconnect voice networks at the IP level using
session border controllers (SBCs), although call routing has largely remained
based on PSTN phone numbers. VoIP interconnection can be a much more efficient
way to connect VoIP endpoints without using the PSTN. It saves on costs and
makes transcoding between IP and TDM unnecessary, as long as traffic can be
kept at the IP level end to end, improving voice quality and enabling advanced
services such as video and presence, which cannot be used with transcoding.
VoIP interconnection is a much broader phenomenon than VoIP peering. To enable
VoIP peering, interconnection must occur on the transport, signaling, and ENUM
database levels, as well as on a commercial or business level, with
appropriate security and quality parameters wrapped around each element. In
VoIP peering, interconnection takes place directly between originating and
terminating carriers. In addition to avoiding repetitive, costly, and
potentially quality-damaging transcoding between technologies, this eliminates
the diseconomies of wholesale "middlemen." Settlement-free peering - the
"gold standard" of true peering - further economizes by making the costly
and time-consuming processes of billing and settlement between providers
unnecessary.
While the concept of VoIP peering is easy to understand, its implementation
has been anything but simple. For starters, there are no standard, universally
supported definitions to differentiate "peering" from "interconnection."
Indeed, the terms are often used interchangeably. Many players will call any
VoIP interconnection "peering"; we prefer to reserve that term for direct
connections between originating and terminating service providers in support
of end-to-end VoIP traffic. Some companies that offer "peering platforms," for
example, support VoIP interconnection that may not be limited to, or even
involve, the narrower definition of VoIP peering.
While there has not yet been a wide-scale shift away from longstanding
wholesale models, Heavy Reading believes that over the longer term VoIP
peering will reduce the need for many "middleman" functions performed by
wholesalers. Similarly, though longstanding settlement models are not yet
going away, variations of VoIP peering have the potential to drive the
industry toward a settlement-free, "bill and keep" model, while providing the
means to expand advanced IP services and features beyond individual service
provider networks.
VoIP Peering: A Market & Technology Update analyzes the myriad effects of the
industry shift toward VoIP peering (and interconnection). The report, which
updates previous research conducted by Heavy Reading, examines several VoIP
peering/interconnection platforms and compares the services and functions they
provide, as well as the business models employed.
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