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June 1, 2003
By Khali Henderson
Hot Billing for Hotspots
Revenue Management for Public Wi-Fi Partners
By Khali Henderson
wireless LAN or Wi-Fi is one of the most hyped opportunities to come down the
pike — affording potential opportunities for both wireless and wireline
providers to expand their networks for relatively low cost. In the end, however,
the opportunity is only as fruitful as a provider’s ability to bill for
Fortunately, most existing service
providers looking at the Wi-Fi value proposition already have many, if not all,
of the IP billing components — retail and wholesale billing systems, mediation
software and AAA (authentication, authorization and accounting) servers —
required to support participation in the various links that make up the Wi-Fi
value chain. These roles — wireless ISP (WISP), network provider, hotspot
operator, aggregator, location owner — range from requiring no or very simple
back-office systems to more complex support for coordination among many
partners, billing systems, payment types and network elements. Lately, a raft of
product rollouts from billing vendors trumpet support for public Wi-Fi vendors
— potentially easing the real-time (less than 10 seconds) or near real-time
(less than 15 minutes) generation of retail and wholesale invoices from a morass
of unlike data streams.
"It’s not as simple as plain
old telephony where you got a call detail record off the switch and that’s all
you had to worry about," says Ron Angner, wireless practice leader for The
Management Network Group (TMNG), a communications consulting firm. "Now
you’ve got all these records floating around and you’ve got to sort it out and
make sure you have the information to bill."
TMNG and its Wireless Technology Lab
partners — inCode Telecom Group and Fluor Corporation — recently demonstrated
on-demand revenue management for public WLAN at the Cellular Telecommunications
Industry Association’s annual tradeshow in March. The demo consisted of a
"home" hotspot as well as roaming hotspots in the four corners of the
lab’s booth. Users signed up and were provisioned on the spot and roamed to
other providers’ networks. At each hotspot, users surfed the Internet and when
logged off received a notice of their usage duration as well as the cost. At the
end of the demo, a hot bill was created showing the usage on the home systems
and the roaming systems and the totals. The demo also incorporated 1xRTT traffic
(a 3G wireless technology based on the CDMA platform) to be billed on the same
invoice in an effort to prove convergent billing capabilities.
"It may not look and sound
complicated, but we brought it all together and it’s difficult to bring it
together — to get the usage records and costs back to the right place,"
says Angner. The big problem was in coordinating different record formats
generated by various network elements. "The brilliance is getting the data
that you need off the network elements, being able to piece it together and
bounce it against time and rate plans. It’s still a challenge; it’s not an easy
thing to do."
This complexity has evolved over
time. "In early deployments, billing and settlement clients have demanded
very low entry costs and costs of operations," according to a white paper
by Convergys Corp. "As markets consolidate, carrier-grade features and
functionality will become increasingly important. Solutions must provide the
flexibility to manage the partner at each stage of the life cycle of the
relationship from acquisition to inquiry/care, in order to reduce the time to
revenue by optimizing costs of doing business with transient partners."
Keith Wolters, senior director of
product and industry marketing for Convergys, says many early WISPs did not view
billing and settlement as a strategic application, but almost as an
As the market evolves and the
relationships evolve from Wi-Fi silos to roaming networks, providers are moving
from simple revenue-sharing models to complex service level agreements.
Convergys says solutions that can support a wide variety of intercompany
business arrangements are needed. "Business models may entail wholesale
usage aggregation, royalties or bounties, incentives and billing on behalf of
others," the company notes in its white paper.
"You are going to have to have
a very flexible [back-office] platform that will allow you to trial and bring to
market very quickly business models and if the market doesn’t adopt them be able
to change it on the fly," adds Wolters.
In fact, it is the developing Wi-Fi
business models that have the greatest impact on the back-office infrastructure
requirements. "When we look at [Wi-Fi] from a billing/customer
care/back-office application, the biggest issue is really the business
model," says Wayne Puboo, head of research and development for Amdocs Ltd.
"There are a number of intermediary roles being played by different members
of the supply chain that require only partial infrastructure."
A hotspot site — a premise — may
require no back-office infrastructure, leaving that to a hotspot operator or
aggregator. A retail WISP may require AAA plus retail billing. Throw in roaming
and the requirement for wholesale billing is added. An aggregator, in contrast,
must supply transaction records to a number of different operators as well as a
number of different retailers for settlement to occur. "One of the biggest
issues for the aggregator is the mediation question. You can imagine they could
have thousands of retail partners each passing transactions that they have to
settle across retail partners and operators on the back end," says Puboo,
who notes Amdocs already is working with some large providers to create an
This only is going to worsen as time
goes on and there are more retailers, operators and subscribers, he says.
Further complicating this scenario will be the injection of content providers
into the settlements process.
Authentication and authorization
take on an additional level of importance when a transaction entails the
purchase of digital content or commercial goods. "In these types of
transactions, authorization and authentication become an integral part of the
merchant’s or content partner’s transaction process," according to
Convergys. "User payment options may need to be considered. The subscriber
may use a prepaid allocation or an e-wallet held by the service provider to
conclude the purchase."
Prepayment comes in two modes, says
Wolters. One is when usage is tracked in real time and subsequent access is
denied after the preset limit is reached. The second is real-time usage
monitoring and tearing down the call when it exceeds the limit. Wolters says
Convergys’ IP Suite does both.
Prepayment and/or balance management
are not the only payment variations that might be considered. Credit cards,
calling cards and even GSM SIM cards could be used. The Intec WLAN Solution from
Intec Telecom Systems, for one, works with such existing systems to authenticate
Wi-Fi users as authorized subscribers.
The addition of content and other
value-added service, such as voice over WLAN services, necessarily requires
convergent billing capability as well. In the Wireless Technology Lab demo, for
example, ADC’s Singl.eView Convergent billing platform created invoices based on
the services as delivered, e.g. bandwidth/volume, duration and per connection.
"Regardless of what
technologies are being used to deliver services, the fundamental business issue
is whether the revenue for service delivery can be captured and managed in both
real-time and on-demand," says TMNG’s Angner. "On the invoicing side,
the wireless technology should be completely transparent to the user; likewise
the ability to rate and bill should be completely technology independent for the
This need is the focus of the Intec
WLAN Solution, which handles the capture, pricing and billing for a range of
WLAN services, including Internet access, data traffic, voice of WLAN,
messaging, content delivery and other IP-based services. The system which pairs
Intec’s Inter-mediatE mediation platform and InterconnecT partner billing system
with Transat Technologies’ Wireless Access Internet Node (WAIN). WAIN uses a
variety of methods to authenticate WLAN users, including legacy RADIUS and SIM-based
"What we are doing here is
injecting a AAA capability that does not have to be software resident at each
hotspot site," says Alan Healey, Intec’s vice president. "The AAA
capability controls all those hotspots and essentially allows people to gain
access to the Internet, tracks what they use and then creates a raw record of
that information. That set of information is what the mediation platform has to
pick up and contort into the language of the retail billing system and hand off
to a wholesale billing system.
"Some of this usage if they
properly set up their business will be roaming usage. In that event, in order to
support the roaming usage, you have two fundamental business processes that you
have to cover. One is you have to send the usage information to a wholesale
billing platform so you know how much to bill that other partner. Secondly, you
need to create billable records of the usage in a format that has been
prenegotiated with them so their retail biller can bill the end user."
The Intec WLAN Solution supports
end-to-end financial transaction processing for:
WLAN network operators, enabling them to capture any type of end-user activity on their networks and generate wholesale charges against mobile carriers, credit card companies, or other subscriber billing organizations.
Organizations such as mobile carriers, wireline carriers, WISPs, ISPs, credit card companies, or subscription resellers, enabling them to settle wholesale activity or roaming charges with partners.
WLAN clearinghouses, enabling them to capture and price end-user authentication requests and service access, and to clear transactions for multilateral agreements between WLAN network operators and end-user organizations.
Jason Andrews, manager of
implementation for Intec notes these players can be discrete, combined or
something in between so the system is set up to support those potential models.
As the business models mature, so
will the back-office infrastructure supporting them. Standardization is one step
forward. While there are no Wi-Fi billing standards, its similarity to other
"roaming" services make it a candidate for adopting one of the
existing data formats to streamline mediation and settlement.
"The Internet Protocol Data
Record (IPDR) standard is being widely adopted because of its ability to handle
a variety of content, telephony and data service record formats in a consistent
way," according to Convergys. "If clearinghouses begin to play a role
in WLAN mediation and settlement, other formats such as TAP (the GSM standard)
and/or CIBER (the CDMA standard) may need to be supported especially if roaming
across 2.5/3G and WLAN networks becomes widespread."
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