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VOIP Peering Bypasses KPN

Light Reading
News Analysis
Light Reading
1/27/2006
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The VOIP peering company XConnect Global Networks Ltd. has landed in the middle of a significant VOIP peering arrangement involving five large Dutch cable carriers with 450,000 VOIP users among them. (See Dutch Cablecos Use XConnect.)

XConnect is peering together the VOIP services of United Pan-Europe Communications NV (UPC) (Nasdaq: UPCOY), Casema NV , N.V. Multikabel , Essent Kabelcom BV , and CAIW .

When the cable networks are peered, 450,000 cable VOIP users will be able to talk with each other over pure VOIP connections that never touch the PSTN.

Cable dominates the video business in the Netherlands, servicing 7 million subscribers or about 93 percent of the country’s households. (See Cable Is the Voice of VOIP.) The new peering arrangement may help the cable companies parlay that impressive stat into telephony leadership as well.

If Dutch cable VOIP catches on, the incumbent telco, KPN Telecom NV (NYSE: KPN), could suffer in two ways. First, it could loose revenue if a portion of its voice customers begin using their cable connections to make phone calls. (See KPN Reports Mixed Q3.) Second, it could also miss out on the interconnection fees it normally gets from cable companies to connect VOIP calls through the PSTN, explains XConnect CEO Eli Katz.

Today only 6 percent of the cable subscribers use VOIP service, so the cable guys still have some marketing to do. (See CEO Makes VOIP Predictions.)

But they appear to be making quick progress. The first 450,000 VOIP subscribers signed on within the first nine months of the service's availability in the Netherlands, Katz says. And interest is said to be growing. (See VOIP's Hot.)

That’s where it gets interesting, and potentially very disruptive. The 6.5 million cable subscribers that aren’t yet buying the VOIP service now have a much more compelling reason to do so. With the pool of cable VOIP users soon reaching a half million households, chances are pretty good that some of their friends and family are also "on network."

“It’s more than just going to your cable operator for your voice service, its more like people will feel like they are joining a kind of movement where you can communicate in a whole new way,” says VOIP analyst Jon Arnold.

KPN isn't taking this lying down. (See KPN Buys Attingo.) The carrier launched a bundled Internet access and consumer VOIP service called InternetPlusBellen last Spring. KPN says it now controls a 44 percent share of the broadband access market, well ahead of the cable companies, which together control only 29 percent. With its bundling strategy, KPN is using its broadband leadership as a wedge into the VOIP market. (See Cable, Broadband Growing.)

But Katz says the peering of the five Dutch cable companies is just the first step. Next is the connection of those networks to others around the world that are also using the XConnect peering platform. This could eliminate even more interconnection fees for the Dutch cable companies. It might also cause some KPN voice customers to defect to cable voice for the attractive international rates.

“This is the beginning of the end of the trillion-dollar PSTN interconnection business of all carriers on a global basis,” Katz says. (See Former BT CTO Fears for Telcos.)

If this is just the beginning of a worldwide cable VOIP peer-up, it makes sense that it would start in the Netherlands. Of the country's 16.4 million people, 75 percent live in a place with an Internet connection. It is fertile ground for VOIP.

A coalition of cable companies in the U.S. is working on a similar peering initiative. CableLabs released an RFI for such a project in December. (See Cable Crowd Seeks VOIP Peers.) XConnect is one of 30 or so peering companies to answer the RFI, but CableLabs will likely issue an RFP before selecting a winner.

— Mark Sullivan, Reporter, Light Reading

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mr zippy
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mr zippy,
User Rank: Light Beer
12/5/2012 | 4:07:53 AM
re: VOIP Peering Bypasses KPN
When the cable networks are peered, 450,000 cable VOIP users will be able to talk with each other over pure VOIP connections that never touch the PSTN.

I'd think these customers were already able to talk to each other via VoIP, before this 'VoIP peering', as long as they were able to send IP packets to each other, and either resolve SIP addresses (e.g [email protected]) to IP addresses via standard DNS, or even just specify an IP address instead of a domain name in the SIP address. The fundamental benefit of VoIP (and the Internet architecture that facilitates it) is that you don't necessarily have to wait for your provider to give you "VoIP" before you can use it.

Is this 'VoIP peering' really about these different groups mapping E.164 address ranges a.k.a. phone numbers to a SIP registrar in the other provider's network. If that is the case, then this is another example of people providing commentary on VoIP without fully understanding the fundamentals of how VoIP works. The only thing this peering is likely to have enabled is the use of E.164 addresses between these SPs, not VoIP itself.
Mark Sullivan
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Mark Sullivan,
User Rank: Light Beer
12/5/2012 | 4:07:50 AM
re: VOIP Peering Bypasses KPN
Thanks for your comment. XConnect and the cable companies are peering a replacement phone service useing ATAs and and regular phones. This is not about softphones. (Even then there's no guarentee of being able to connect with another user. Does that other user use the same VOIP app you do?) An ENUM database was built as well as a significant amount of interoperability between the cable companies' various platforms.
mr zippy
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mr zippy,
User Rank: Light Beer
12/5/2012 | 4:07:49 AM
re: VOIP Peering Bypasses KPN
This is not about softphones.

Softphones and ATAs are fundamentally the same - they talk the same SIP protocols, and generally have the same media codecs. The only sigificant difference is that ATAs attached to normal phones (or VoIP phone sets themselves), can't be used to enter 'full' SIP addresses. Rather, they can only enter a multi-digit number that is used as the part of the SIP address before the @ symbol in the SIP address.

So, (and again I'm learning about this), this is how SIP is used in this scenario.

SP A is allocated phone numbers in the range 1000 to 1999. SP B is allocated phone numbers in the range 2000 to 3000.

An example of the full SIP address of the phones in SP A would be :

[email protected]

likewise for SP B

[email protected]

For SP A, the ATAs / VoIP phone handsets are configured to register themselves with the SIP Registra with the IP address corresponding to SPA.COM. Same for SP B.

When a customer of SP A dials a number within the SP A number range, that SIP request is sent to the SIP REGISTRA, which works out that it is within the SP A number range, and then forwads the SIP request to the destination SIP end-point ie. the destination ATA or VoIP handset.

If the SP A customer dials a phone number in the SP B range, the SP A REGISTRA / SIP Proxy is programmed to re-direct that SIP request to the SP B REGISTRA. The SP B Registra then directst the SIP request to the SIP end point in within it's network.

I'd say the VoIP peering in this article is really just about programming the SP Registras / Proxys with number ranges and corresponding remote SP registras.

Note, the SIP registra's are only helpers in this. They're only really necessary as VoIP handsets / ATAs don't give you the ability to enter full SIP addresses. There's generally no reason why one of SP A's customers couldn't set up a SIP Proxy themselves, and then have SP B's ATA's / VoIP handsets register with that instead, rather than SP B's SIP proxy. And, if there was an easy way to enter full SIP desination addresses into the ATA / VoIP handset (e.g. by programming a speed dial key to dial it), then the SIP proxy wouldn't need to be involved at all.

There is a good presentation on SIP / IP telephone at http://www.iptel.org/
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