1 The Next Step for Next Generation Technology: Interconnecting Managed Packet Networks to Preserve Voice Service Quality and Competition Joe Gillan June 2008

2 Initial Deployment: Managed-Packet Islands Cable Managed -Packet Network Managed-Packet (MP) Networks operate as isolated islands today, with QoS assured within each network. However, when customers served by one network need to communicate with the customers of the ILEC, the carriers exchange voice traffic in legacy (TDM) form. MG – Media Gateway (converts MP to TDM) CLEC Managed -Packet Network Wireless Managed -Packet Network MG ILEC Network MG ILEC Network

3 Forcing Voice Traffic Exchange in Legacy Format is Artificial and Inefficient Where the ILEC has deployed a Managed- Packet Transport network, there is no technical reason for interconnection and traffic exchange to occur in TDM form. End Office Incumbent Managed- Packet Network Media Gateway Competitor Managed- Packet Network Media Gateway TDM

4 The Logical Next Step: Interconnection Between Managed-Packet Networks Unnecessary conversion to TDM can be avoided, with traffic exchanged between Managed-Packet Networks in packet form, with QoS established end-to-end. End Office Incumbent Managed- Packet Network SBC/Router Competitor Managed- Packet Network SBC/Router Media Gateway MP

5 The Evolution of Managed-Packet Networks Over time, managed-packet technology will be deployed closer to the customer, and will eventually supplant TDM in most areas. The last-stand for TDM technology cannot be the high- density interconnection trunks between local networks. Packet Switch Incumbent Managed- Packet Network SBC/Router Competitor Managed- Packet Network SBC/Router Gateways / ATAs MP

6 Managed-Packet Interconnection is Feasible Among carriers without market power, some voluntary traffic exchange arrangements for voice are emerging, but primarily for interexchange traffic. The greatest volume of traffic, however, is exchanged with the incumbent local telephone company. The most important element in the development of managed- packet traffic exchange is the interconnection between incumbent and competitor managed-packet networks for the exchange of voice traffic.

7 The Bottom Line It is essential that regulators preserve existing obligations of carriers to interconnect their networks to exchange voice traffic regardless of the underlying technology.