2. VoIP Clearing & Peering Agenda  Definitions  Interconnect Models and Technologies  Traditional Telephone (The early days)  VoIP (What is the future?)  Summary and Conclusions

3. Definitions Peering  Bilateral interconnection  No Financial Implications (Bill and Keep)  Settlement (Interconnect Billing) Clearing  Multilateral Interconnection  Settlement (Interconnect Billing)

4. Interconnect Business Model Drivers Market Factors  Fair allocation of costs (free resources get abused)  Big is better (network externalities)  Competition / Regulation Technical Factors  Route Discovery (Scalability, Bilateral vs Multi-Lateral)  Access Control  Accounting

5. Interconnect in the Early Days  Market Factors  High growth  Lots of new entrants  Fragmented market  Highly competitive  Unregulated  Interconnect Model  Bill and Keep

6. LEC Interconnect – Bill and Keep Local Telco Local Telco Local Telco $ Local Telco $

7. LEC – Bill and Keep  LECs bill their subscribers and keep all the money  Interconnect trunks among LECs  Simple – low overhead  Works well for rural ILECs (no competition)  Lack of settlement can lead to economic distortions  Does not scale UsersModelTechnology Route Discovery Access ControlAccounting LECsBill & Keep Inter-office Trunks NYN

8. The Telephone Market Matures  Bill & Keep model does not scale.  Market Consolidation.  Regulation and market stability  Interconnect is managed by a dominant inter-exchange carrier

9. Inter-Exchange Carrier Inter- exchange Carrier Local Telco Local Telco Local Telco Interconnect access & billing occurs at adjacent networks $ $ $

10. Inter-Exchange Carrier  IXC has Bilateral Settlement agreements with many networks  Interconnect to IXC provides global routing  Tandem switch provides total call control  Access control and accounting  Tandem switch creates a network bottleneck UsersModelTechnology Route Discovery Access ControlAccounting IXCs Multi-lateral Settlement Tandem Switch – SS7 signaling YYY

11. Interconnect Future for VoIP?  Market Factors  High growth  Lots of new entrants  Fragmented market  Highly competitive  Unregulated  Trend toward deregulation  Natural trunking of IP mesh different from switched star network  Interconnect Model?

12. ITSP – Bill and Keep IP Network ITSP IP Phone PC Phone ENUM $ $ Directory Server Route Look-up

13. ITSP – Bill and Keep  Removes network bottlenecks – enables peer to peer routing  Excellent technical solution for route discovery and scalability (DNS works!)  No access control or accounting – free resources could be abused.  Best for equal sized networks or in a regulated environment. UsersModelTechnology Route Discovery Access ControlAccounting Directory SvcFree VoIPENUMYNN

14. DUNDi – Bill and Keep $ $

15.  New interconnect model being used by Asterisk users  No central authority – enables peer to peer routing  General Peering Agreement  Each peer has a bilateral agreement with adjacent peer  GPA links all peers for global route discovery  No networks bottlenecks - Potential for high scalability  No access control or accounting – free resources could be abused. UsersModelTechnology Route Discovery Access Control Accounting AsteriskBill & KeepDUNDiYYN

16. VoIP Peering IP Network ITSP $ $ SBC Interconnect access & billing occurs at Border Controllers

17. VoIP Peering  Bilateral agreement to peer VoIP networks  Session Border Controller provides total call control  Bilateral Access control and accounting  Settlement billing or Bill and Keep  Session Border Controller creates a network bottleneck  Scalability limited by bilateral agreements UsersModelTechnology Route Discovery Access Control Accounting VoIP Peering Bilateral B&K or Settlement Session Border Controller NYY

18. $ VoIP Clearinghouse Certificate Authority and Settlement Clearinghouse IP Network ISP ITSP $ OSP Interconnect access & billing occurs at VoIP Domains Route Look-up & Authorization CDR $

19. VoIP Clearinghouse  Similar to ENUM - Removes network bottlenecks  Excellent technical solution for route discovery and scalability (DNS works!)  Public Key Infrastructure (PKI) services ensure secure multi-lateral peer to peer access control  Standards based accounting records ensure simple, real time settlement (no monthly CDR disputes) UsersModelTechnology Route Discovery Access Control Accounting VoIP Clearinghouse Multi-Lateral Settlement OSPYYY

20. Summary of Interconnect Models UsersModelTechnology Route Discovery Access Control Accounting LECsBill & Keep Inter-office Trunks NYN IXCs Multi-lateral Settlement Tandem Switch – SS7 signaling YYY Directory SvcBill & KeepENUMYNN ITSPsBill & KeepDUNDiYYN VoIP Peering Bilateral B&K or Settlement Session Border Controller NYY VoIP Clearinghouse Multi-Lateral Settlement OSPYYY

21. Conclusions Reliable Settlement Bill & Keep BilateralGlobal Route Discovery Access Control & Accounting Tandem Switch ENUM OSP Inter- Office Trunks Session Border Controller DUNDi How Interconnect Technologies Compare