April 9, 2009 TANE Spring Educational Symposium Bretton Woods, New - PowerPoint PPT Presentation

April 9, 2009 TANE Spring Educational Symposium Bretton Woods, New Hampshire

How Did We Get Here?  RBOC withhold of transit traffic payments  Rate-shopping  Lack of visibility beyond Tandem switching layer  Complexity of interconnection agreements  Bypass via Protocol – SIP vs TDM  “Connectionless” vs Deterministic  Regulatory “Multiple Personality Disorder”  Local voice is regulated (in the loop)  Local voice via Voip is unregulated (using the loop)  ILECs are regulated, Voip providers are not TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Types of Phantom Traffic RBOC Tandem Transit  Transit Traffic Originated via RBOC Tandem  No payment by RBOC (for non-RBOC traffic)  No ability to identify source of traffic  No ANI  Lack of real-time enforcement  “Rear-View” visibility and measurement  25%-50% Revenue losses in terminating access charges TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Types of Phantom Traffic CLEC Interconnection  Favorable CLEC interconnection agreements  CLECs sell terminating rate deck to IECs and Wireless providers  Rate Arbitrage by CLEC  Local calls sold as Terminating Access  Potential for ANI manipulation  CLEC retains margins  ILEC improperly compensated TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Types of Phantom Traffic IP Origination and Termination  Your Customers use your unregulated DSL services to affect technical “bypass” of your regulated services  Voip providers enjoy regulatory protection from payment of terminating access via IP  Skype  Vonage  Other Voip providers purchase CLEC termination to conceal terminating access as local calls TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Issues Barriers to Progress  Lack of Network Element Control  Lack of Visibility to real-time traffic  Expensive accounting of past losses doesn’t translate into future revenues  RBOCs are not your friends  Regulatory “Firewall”  Regulated vs. Unregulated services  You’re not playing by the same rules  Asymmetric economic model  Complexity and Quantity of Interconnection Agreements  Creates legal and financial barriers to resolution  Multiple tariffed and contract rates for traffic delivery  Encourages rate-shopping  Rewards negative customer behavior TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Opportunities and Desired Outcomes  Stop the Bleeding  Increase Revenues from terminating access  Offer wholesaleVoip services with IP-Access services  If you’re going to enable your competition, make it profitable  Simplify peering and traffic-sharing agreements  Streamline interconnect agreements  Aggregate Assocation member traffic  Ingress – United policies and tariffs  Egress – Multiple Carrier LCR  Peering of Association member traffic  One agreement, not 22 agreements TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Recommendations  Control Tandem Access to your Network  Be your own gatekeeper  TDM and IP  Make it difficult and expensive to “game” access services  Develop portfolio of Wholesale SIP services  Local DID numbers  Out-of-area SIP-based services  Communication Integration – local, national, global  SIP-enable your local network with outsourced IP Tandem Access  Use a media gateway as the “Voice Demarcation” point in your netowrk  Offer incentives to terminate traffic in your territory via IP  Reward revenue-producing behavior  Play out of both rulebooks  Out of territory SIP services create revenue on unregulated side  In-territory services protect current service revenues TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Conclusions  Treat the Problem, not the Symptom  Phantom traffic is a symptom of a failing system  Take control of your network at ALL layers  Create new revenue opportunities  Prevent uncompensated access to your network  Aggregate traffic to reduce direct cost of termination of out-of-footprint traffic  Simplify and facilitate member traffic peering TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com

Hosted and Managed IPTandem  Leverage Capital dollars – Opex as opposed to Capex  Pay for only what you need  Partition larger platform  Outsource management of hosted platform  Keep services in deregulated side  Re-deploy HR assets  Reduce time managing multiple peering agreements  Reduce legal and regulatory expense  Be a net seller, not a net purchasor of services  Develop deregulated services at Tandem layer that leverage regulated infrastructure – just like your competitors  Outsource association traffic aggregation, peering, and settlements TANE Spring Educational Symposium - Network Intelligence - www.NetG2.com - info@netg2.com