In an agreement covering nearly half a million VoIP subscribers, a consortium of five cable operators in The Netherlands has chosen XConnect Global Networks Ltd. and its technology partner Kayote Networks Inc. to provide VoIP peering for their consumer VoIP services.

The cable operators are UPC Netherlands, Casema, MultiKabel, Essent and CaiW.

XConnect and Kayote will enable the cable operators to share VoIP traffic, directly eliminating PSTN interconnection fees, except for calls that will terminate to the PSTN.

It is a clear-cut statement of dramatic change in telecom, said Eli Katz, founder and CEO of XConnect. They are doing peering, not just to get rid of minute charging, but to create true connectivity, island to island, so to speak. Today most VoIP service providers are islands of service not connected directly to any other VoIP service providers, and connections are made through the PSTN.

The Netherlands is one of the most extensively cabled countries in the world with more than 95 percent of households connected. The 450,000 subscribers to VoIP represent about 6 percent of the more than 7 million households passed by cable in The Netherlands.

The cable operators formed a working group in the fall of 2005 and issued and RFP for a service provide all-IP communication among cable operators with no connection to the incumbent phone networks.

Katz anticipated the cable operators in The Netherlands will exchange traffic on a settlement-free basis. We are seeing increasing take-up of the concept of settlement-free peering, said Katz. Not that we are doomsday-sayers and billions of dollars (in settlement fees) are about to disappear. The settlement still be with us for while. What we are seeing is the beginning of settlement-free relationships.

CableLabs Inc., the research and development organization of the North American cable industry also recently issued and RFI for VoIP peering services, to which XConnect has replied. Fundamentally they are very similar, but I think it is fair to say the one from CableLabs is a real RFI rather than an RFP, Katz said. It deals with the same issues: PacketCable connectivity and media handling. CableLabs has not yet announced its choice for peering and typically is deliberate in choosing new technology providers.

The service for the Dutch cablers will be in trial within a quarter Katz said.

CaiW www.caiw.nl
Casema www.casema.nl
Essent www.essent.nl
Kayote Networks Inc. www.kayote.com
Multikabel www.multikabel.nl
UPC Netherlands www.upc.nl
XConnect Global Networks Ltd. www.xconnect.net