Economics of signaling Business models influence technology - - PowerPoint PPT Presentation

SLIDE 1

Economics of signaling

Signaling = application control!!!

• C. Courcoubetis

Technology influences business models

Technology decisions affect business models Business models influence technology decisions Example 1: the end2end principle TCP/IP, control at the edges of the network Example 2: Voice over IP (VoIP) H323: preserves vertically integrated control of carriers SIP: allows control to the edges of the network IMS: SIP-based architecture, provides control to

network operators

We would like to understand the economic implications of

technology decisions in the Internet

• C. Courcoubetis

The end2end principle

Provides a rationale for moving a function upward in a

layered system, closer to the application that uses the function (J.H. Saltzer, D.P. Reed and D.D. Clark)

Result: most of the functions are moved to the edges of the

network, network does simple tasks (IP)

Internet: provides IP functionality only. Edges provide

intelligence (TCP and up)

Can not control edge applications Telephone network: assumes simple edge devices, has all

the intelligence

Controls services (creation, usage, pricing) Analogy: freeway system vs railroad tracks

• > Technology influences business models!
• C. Courcoubetis

The paradox of the simple network

The simple network core (Internet) provides commodity

services, cannot make money!

Simplicity: key factor for success, low cost No bargaining position due to commoditization “The best network is the hardest one to make money

running!”

How to build a sustainable Internet? -> NGN, IPsphere What should be the business of future NSPs?

SLIDE 2

• C. Courcoubetis

Signaling and competition

The Internet evolves from being a research network New requirements, new design principles Important reality: different stakeholders of network

infrastructure have interests that are adverse to each

• ther := “the tussle” (David Clark)

New network architecture must accommodate this tussle Application control = signaling protocols Example of “tussle-ready” signaling technologies: SIP,

ENUM, IMS

We examine such technologies to analyze their effects

• n competition: the range of tussle they allow
• C. Courcoubetis

The role of signaling

The network control layer influences business models Controls operation of applications and access to content Connects applications to network services Who controls the control?...

Network services Network control (signaling) Applications, content Offered by network operator Offered by other parties Strategic role!! ? ?

• C. Courcoubetis

Topics covered

VoIP (briefly) SIP ENUM BT Fusion IMS

VoIP

Voice over IP

SLIDE 3

• C. Courcoubetis

VoIP – Voice over IP

VoIP: all forms of call setup & voice transmission using

Internet protocol (IP) technology

• ver private, managed IP-based networks or the public

Internet

PC-to-PC, PC-to-phone or phone-to-phone

• C. Courcoubetis

The impact of VoIP

Voice becomes just another application on the Internet VoIP means different things to different people ILECs & Mobile operators: threat to their main source

• f revenue as well as antidote (upfront CAPEX vs

reduced OPEX and advanced services) – IMS

CLECs: opportunity (lower barriers to entry) Wholesalers: opportunity (more alternatives to

destination control)

ASPs: new niche markets End-Users: more value, cost savings Regulator: dilemma

• C. Courcoubetis

VoIP call phases

VoIP telephone call procedure is similar to PSTN

call setup: getting a dial tone, dialing a phone number, getting a

ring or a busy signal at the far end, and picking up the phone to answer the call

telephone conversation: voice samples digitized, compressed,

packetized, transferred, reordered, buffered (causing extra delay), decompressed and converted back to analog

Call control: mute, call-waiting,… End of call: tear down

…but, more complicated since the voice application is

decoupled from network services

Call setup may involve many intermediaries; each one controls

the next hop

SIP

Session Initiation Protocol

SLIDE 4

• C. Courcoubetis

Introduction to SIP

• SIP is an end-to-end session signaling protocol

A session could be any transaction on the Internet; more suited

for multimedia (calls, chat, video conferences, …)

• It defines how SIP devices will communicate

SIP addresses are similar to email addresses and used for

locating the session’s destination(s) – In the context of VoIP: identify callee and callee’s “home provider”

SIP messages describe the action to be performed

– In the context of VoIP: call setup, call-state modifications, …

• SIP entities reside at

End-users (User Agent Client, User Agent Server) Providers (Proxy server, Location Server, Registrar Server)

• C. Courcoubetis

User’s registration with SIP

• C. Courcoubetis

Invitation through one SIP Proxy server

In this case, the two parties have registered to the same proxy SIP.

• C. Courcoubetis

Invitation through one SIP server in redirect mode

In this case, the called party has roamed to another proxy SIP.

SLIDE 5

• C. Courcoubetis

SIP and multimedia session control

• SIP is based on the request-response paradigm (client-server) but in

a distributed way (through proxying): different control structures

• The end-user grants control to a “home provider”, because only this

provider knows how other users (that learned a SIP address issued by this provider: mnemonic address) can reach her (even in case of roaming)

An end-user can acquire any number of SIP addresses (free SIP

addresses are also available, i.e. sip2sip.info), but she will have to “pay” a switching cost – ENUM can minimize this switching cost, although some users are restrained to use locked devices

• When a destination (i.e. PSTN end-user) can be reached by several

providers, an intermediate provider (i.e. a wholesaler) possessing this information can control the provider that will participate in the session.

• SIP does not transport data nor control media path (QoS can be

achieved with complementary protocols-systems)

ENUM

tElephone NUmber Mapping (or E.164 NUmber Mapping)

• C. Courcoubetis

Introduction to ENUM

• ENUM is a global directory of services where users have signed-

up and can be reached from

• Service examples: VoIP, voicemail, POTS
• Lookup is performed by E.164 numbers (usually in 2 phases)

– Uses the DNS architecture for acquiring other mnemonic addresses '+12025332600‘ ↔ 'sip:user@sipservice.com‘ – Find the IP address of the user’s provider SIP proxy 'sip:user@sipservice.com‘↔ 192.251.255.250

• Generally, enables the finding of alternative routing numbers

e.g. Alternative ways to make a phone call to the same person (PSTN or mobile or VoIP) – Lower control to the Home Provider

• Due to bureaucracy ENUM is operating in only a few countries

(Switzerland, Austria, …)

• This has led to the emergence of “closed” ENUM systems (in

parallel to public ENUM)

• C. Courcoubetis

Registration into ENUM

• A user (“owner” of a E.164 number) informs an ENUM registrar

about the current services he is currently subscribed into and his preference (he has control)

In closed ENUM systems users’ preferences are absent, so

providers have full control

• Registration is not obligatory (opt-in)
• I.e. User ckalog enters the following identifiers (in descending

preference)

• 1. sip:ckalog@iptel.org
• 3. tel:302108203683
• 4. mailto:ckalog@aueb.gr

SLIDE 6

• C. Courcoubetis
• 1. End user enters E.164

Number: 1-973-236-6787 (e.g., in to: field)

DNS IP-based Network

• 2. Application client formats

number into FQDN (e.g., 7.8.7.6.6.3.2.3.7.9.1.e164.arpa) and looks up name in DNS

• 3. DNS returns all

NAPTR records associated with FQDN

• 4. Application selects appropriate

NAPTR record (e.g., mailto:sdlind@att.com) and completes processing

Bypassing PSTN with ENUM (IP-IP calls)

BT Fusion

• C. Courcoubetis

BT Fusion

The first commercially available service bringing Fixed-

Mobile Convergence (since fall 2005)

BT decides the most appropriate access network for

delivering services, based on subscriber’s location

3 choices in case of telephony services: POTS, VoIP,

Mobile

Combines functionality of a mobile phone with

reliability of fixed telephony and/or lower charges (especially for VoIP)

Vodafone is the associated mobile operator

• C. Courcoubetis

BT Fusion

• User owns a special access point and a dual-mode handset
• User is assigned only one identifying number (from BT)
• Calls routed to fixed-line network within range of Bluetooth access

point (WiFi in future)

VoIP if quality is acceptable, POTS otherwise

• Out of range calls routed to cellular network
• BT has full control (not the user)!

Convergent Handset Cell site VoIP Gateway PSTN

Cellular network Bluetooth

• r WiFi

Broadband Link PSTN Link

NTE ADSL NTE

OR

Fusion Access Point

SLIDE 7

IMS

IP Multimedia Subsystem

• C. Courcoubetis

Introduction to IMS

• 3GPP (3rd Generation Partnership Project) is working on IMS

3G Release 6 (standardized version)

– Releases 7 and 8 are expected until mid 2007 & 2009 respectively

A commercial step towards NGN Enables services that are independent from access network

technologies

IMS is a key functional block to support convergence based on

all-IP

Many consider IMS as the realization of 4G

• IMS is to enable the Service Provider to:

Rapidly create services with reusing existing network resources Efficiently control user and network through authentication/

authorization and Dynamic Policy Control

• C. Courcoubetis

IMS and NGN

• 4 layer architecture

Services (application servers & content) Service Control (signaling elements) Network Control (policy servers) Transport (networking fabric)

• IMS does not define services – it is a framework enabling

to deliver SIP based services

All services are rendered by IMS Applications

servers & clients

Allows for the horizontal decomposition of functions

thus completing the IN initial objective

• IMS does not control the media path on its own

IMS performs the policy decision per service request

and the QoS functions of the actual network (e.g. G/MPLS routers) enforces the policy

• C. Courcoubetis

Migration phases to IMS

• “VoIP Transport”

(Partial) replacement of traditional TDM networks and Class4

switches with IP transport and soft-switches

Little changes into user experience Cost savings to the provider (and users)

• “Pre-IMS”

More IP-based real-time services can be offered (not just VoIP) Increased user experience No (or limited) cooperation by providers

• “Full-IMS”

Complete adoption of IMS service interoperability among

different network and service providers

Rich user experience

SLIDE 8

• C. Courcoubetis

IMS QoS Support

• IMS can control and manage the bandwidth allocated to the application and

define its priority on the intra-domain level

QoS collapses in the inter-domain level

• The actual Network QoS for IMS services is provided by the Access

Network (e.g. based on UMTS QoS) and the IMS network infrastructure (e.g. based on G/MPLS).

During the setup of a session, user equipment (UE) requests network

resources (carried in SDP)

The proxy-CSCF (P-CSCF) then forwards the SDP parameters to the

Policy Decision Function (PDF)

The PDF then authorizes the related media parameters, according to

the users' media messages and the local policy. – E.g. a G.711 call would be translated into real-time priority with 80 kbps IP bandwidth requirement

After authorization, the authorized media parameters are returned to the

UE and to the network element enforcing the policy (e.g. GGSN)

• C. Courcoubetis

IMS and mobility

• SIP is the protocol used for session management
• Mobility is enabled through proxy servers and registrars

Proxy servers process/forward requests from users and other

proxies

A registrar stores information about users (IP address of user’s

terminal or current proxy server)

• “Home provider” has control on services received from a roaming

user, as he participates in authentication and performs authorization, accounting in order to bill

• A 4G-provider is expected to be a provider that can interoperate with
• ther providers (independent of access technology) during the

provision of a service

• C. Courcoubetis

IMS Main Components

• Call Session Control Function

(CSCF): Set of entities for managing user sessions

Proxy CSCF: UE’s first point

• f contact (can be either on

the visited or home network)

Interrogating CSCF: a type of

“proxy” for incoming SIP requests from other networks

Serving CSCF: session

controller assigned to subscriber (always on the home network)

• Home Subscriber Server (HSS): a

database with subscriber information

P

• C

S CF I

• C

S CF S

• C

S CF

Visited network Home network

REG REG REG 200 OK 200 OK 200 OK

Registration example

• C. Courcoubetis

Example of a session between 2 roaming users in IMS

P

• C

S CF I

• C

S CF A’s visited network User A User B B’s visited network A’s home network S

• C

S CF I

• C

S CF I

• C

S CF S

• C

S CF I

• C

S CF P

• C

S CF B’s home network Optional Required on registration,

• ptional on

session establish Required on registration,

• ptional on

session establish GPRS GPRS

SIP

voice packets

SLIDE 9

• C. Courcoubetis

Content strategies

A walled garden is a mechanism for a provider to restrict

the user experience by confining the user to a specific region/space as defined by the provider

more profit for the provider traditional strategy of cable operators & cellular

providers

An open access portal model allows the user unrestricted

access to whatever content is available.

based on the “End-to-End” principle of Internet network operators charge purely on traffic (bit

pushers)

• C. Courcoubetis
• Single Provider walled garden Multi-Provider walled garden

Providers (of access network, services,…) can form coalitions,

allowing subscribers of a coalition-member to get service

But, users won’t be able to buy services from non-member

providers

• Component-based services:

Each service can be decomposed into a mixture of components A component maybe used by many services (e.g. charging,

accounting)

Components for the same task can belong to different providers

(competition)

Need for brokers

IMS and business models

IPsphere

Creating a commercially sustainable framework for IP services

Realizing Next Generation Revenues

• C. Courcoubetis

The problem

• Internet is not a single large infrastructure that continues to be

developed apace, but a federation of separate cooperating IP networks

• An imbalance in the risk vs reward for the participants threatens the

cooperative outcome and the IP market

• Today’s IP service framework lacks the means to compensate partnering

service providers in proportion to their contribution of resources to an end-to-end service

• How to ensure that investments in service innovation and infrastructure

development are rewarded and encouraged?

• Need for mechanisms that allow the compensation for incremental

investments in development and deployment of new services

• Any resource capability contributed to enhance an overall retail service
• ffer should be framed in a business context

SLIDE 10

• C. Courcoubetis

The sustainability of the Internet

• www services succeeded due to the almost zero marginal cost of

adding www applications to a fixed-price Internet access platform

• This allowed many new diverse relationships and experiences to be

conceived and tried out, many www players forged significant buyer- seller relationships on the basis of the Internet’s global connectivity

• They arbitraged the relatively low cost of Internet BW, representing

net market loss viewed from the perspective of conventional telecom service portfolios

• Similarly, new operators enjoyed a low barrier of entry but eventually

did not managed to build sustainable businesses

• Incumbents network operators naturally seek to develop new service

revenues to offset losses due to arbitrage of traditional portfolios

• Conclusion: next generation of services and revenues will depend on

the online industry’s capability to sustain investment by all stakeholders, and cheap enough not to drive innovation out

• C. Courcoubetis

A solution

• Middle ground: allow providers to specify and charge for services
• ffered to their customers and other providers
• No incentive for walled gardens since revenue is generated by

participating in the service value chain of competitors

• C. Courcoubetis
• Handles the challenge of developing a standard efficient and flexible framework and

business models to deal with operational and administrational processes associated with service planning, marketing, fulfilling and assuring

• Service management and operations today utilize service-specific monolithic

management systems linked to similarly monolithic network technology

• As telecommunication providers move to a converged service delivery platform this

vertical structure needs to be broken down in order to facilitate the creation, provisioning and management of these new services that span multiple provider boundaries and stakeholder control domains.

• The IPsphere Framework has been developed to enable providers to concurrently
• ptimize flexibility and efficiency by focusing on the translation of a generalized

service offering into a set of generalized resource commitments to meet the overall service goals

• In the IPsphere Framework Services are structured via the decomposition of a

Service into constituent Elements that represent the capabilities of a set of technology resources

• The IPsphere Framework allows a service provider (called Administrative Owner) to

provide an end-to-end Service, while collaborating with partnering service providers (called Element Owners) that are responsible for the Elements composing the Service

• The scope of the IPsphere Framework is based on two key aspects namely,
• service abstraction: providing a mechanism to declare a service offer in terms of

technical and business constraints

• service decomposition: mapping a service offer to resource commitment across
• ne or more providers.
• C. Courcoubetis
• “IPSphere” is the vision for an internet that

is capable of being partitioned into virtually independent service-specific

subnetworks/overlays – Internet will be a subnetwork with best-effort quality

service attributes can be controlled as on a private IP network

• This vision is gaining increased attention from stakeholders

Successor of Juniper Networks’ “Infranet” vision Members include service providers, system integrators, software

developers and infrastructure vendors (including Cisco)

• Purpose: viable business models for service providers
• Tasks

Identify and develop the missing parts of the underlying IP infrastructure

– In association with a third-party body in order to be compatible with existing & emerging standards

Design a commercial framework that will bring trust among providers

and create a more flexible value chain

• IPSphere can complement IMS, by bringing QoS

SLIDE 11

• C. Courcoubetis

IPsphere architecture elements

Traffic Handling (TH) Stratum

delivers packets from one end point to another Most traditional networking technologies and

equipment reside in this stratum (routers, Multiplexers,…)

Network Policy and Control (NP&C)

Stratum

Coordinates the delivery of packets in the TH

Stratum (push policy decisions to network elements on the TH Stratum for enforcement)

– brings intelligence to the network

Traditional network OSS and policy servers

reside in this stratum

• C. Courcoubetis

IPsphere architecture elements

Service Structuring Stratum (SSS)

Has few roots in traditional networking Based on Web Services for managing collaborative

services (service creation, discovery, negotiation, activation, assurance and provision) – Every participating provider publish a list of “Elements” to a registry that represent services and roles the provider is willing to accept – Services are created by assembling elements in a structured fashion – A Grid-like marketplace

• C. Courcoubetis

Traditional Internet

End A End B Intermediate nodes

• Today's Internet is an ad hoc,

cooperative collection of independent IP networks

• Main principles

“End-to-end”: intelligence

lies at the edge more control to end-users

“network neutrality”: treat

all IP packets with Best- effort

• “the paradox of the best

network”

• Flat-rate pricing is prevalent
• C. Courcoubetis

IPsphere internet

The IPsphere is a model for putting network services into

a business context by linking service creation with service ordering and fulfillment

Enables a wide range of business models Requires network intelligence (providers acquire more control)

SLIDE 12

• C. Courcoubetis

Vertically Integrated

Services

Explicit walled garden

Cooperative Services

Revenues in proportion to

the resources each partner contributes (implicit walled garden)

Best-effort case: Internet

IPsphere internet

• C. Courcoubetis

IPsphere service creation

• The IPsphere divides a service into Elements, which include

Access Transport/Connection Content/Processing Users/Access point

• A given service may have any number of elements of any of these

types as needed, and services are created by combining Elements contributed by providers.

• C. Courcoubetis
• Each Element has a software “method” or module that is published

as a web service and which links to underlying network management

• r policy management capabilities to actually control the service
• A provider publishes a set of web services and its attributes (i.e.

price) onto the SSS VPN for the elements he contributes

• Providers, who want to create a service by combining elements from

partners, exchange web-service-based messages

IPsphere service creation

• C. Courcoubetis

IPsphere service examples

SLIDE 13

• C. Courcoubetis

IPsphere characteristics

Assurance through SLAs Security through well defined interfaces Quality of service by setting up inter-carrier MPLS paths Differentiated services Not only on price, but service attributes as well On-demand services: end-user applications shall

automatically request the level of security, quality of service and bandwidth they need from their network provider and have that delivered across the internet