1. A New Model for Interconnection ECC Report 75
John Horrocks
DTI

2. Why do we need a new model?
We need to accommodate new services
We need to simplify interconnection
We need to reduce charging costs
The cost basis has changed and the existing model was designed for expensive core networks
The retail market is changing with subscriptions and bundled calls and is now out of line with interconnection
The days of call charges are disappearing
Running a service-aware backbone for multiple services will be organisationally complex

3. Distance and time dependent call charges Regulation is based on this!
Costs old and new
Distance and time dependent call charges
Old
Carrier selection
Freephone
Regulation is based on this!
Backbone
Access
Access
Terminal A
Terminal B
Line rental
Line rental
New
Access
Backbone
Access
Terminal A
Terminal B
Line rental
Line rental

4. IP - the opportunity to change
“Internet” approach separates transport and service provision
Layering
Interconnection has developed around carrier selection but this is no longer needed
Are we stuck forever?

5. The goal High quality interconnected service platform - a new utility
Full separation of transport and services
Transport consists of access and backbone
Interconnection charging based on capacity and quality - not service
Uncontrolled service creation from the normal customer interface (friendly to 3rd parties and innovation)

6. ……….but
There are still some very expensive calls, eg premium rate, non-liberalised countries and mobile
We need a smooth migration for any changes
So we cannot avoid a system of parallel running

7. The Concept A growing area with the new interconnection model
Operators can join at any time
Gateways to the old model
Allows parallel operation of old and new models and overlays
The old model will continue but diminish indefinitely

8. Customers, access and services
Customers pay separately for access and services
Access payments may be subscription or usage based - where usage based would pay for access for incoming calls
Access payments may be quality related
Customers pay service providers for services, service payments may be subscription or usage based, but “connectivity” services are cheap.

9. Service payments
Service provision works on sender keeps all within the new model - maximise connectivity (like )
Service providers will need gateways to the old model (like VoInternet with PSTN breakout)
Separation from transport means easy to reach distant service providers
Calls can be carried as far as possible on new model

10. Transport Interconnection Payments
Capacity and quality based, not service based
Capacity payments towards the centre
Peering in the centre
Same as the Internet

11. Inside the new model SP Sender keeps all SP Access Terminal A Access
Retail subscription or usage SP
Sender keeps all SP
Access subscription or usage
Access subscription or usage
Access
Terminal A
Access
Terminal B
Capacity charge
Capacity charge
Transit
Transit
Transit
Peering
Peering

12. Calls to the old model Old model SP Gateway Terminal A Access Transit
Interconnection
Call charge
Retail subscription or usage
Retail subscription or usage SP
Access subscription or usage
Gateway
Old
model
Terminal A
Access
Capacity charge
Capacity charge
Transit
Transit
Transit
Peering
Peering

13. Retail for calls to call charge area Internet style platform
A new model
Option-4
No call charges
Call charges
Retail for calls to call charge area SP SP SP
Gateway
Internet style platform
Terminal A
Originating
Transit
Terminating
Terminal B
No call charges
Access line
Capacity charge

14. Principles
Retail service charges from service provider remain a commercial matter
Retail access from network operator may be subscription or volume (mobile)
Create IP-based interconnect club with capacity payments, no call charges and open interconnection
Membership and coverage of the club may grow
Defined bearer services only to external gateways
Gateways to call charge zone outside
Originating service provider signals/pays gateway but not IP network operators (SP is independent of access operator = carrier selection)
Saves need for session border controllers within club