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Peering Into the Future

Channel Partners

March 1, 2006

7 Min Read
Peering Into the Future

VOIP PEERING SERVICES ARE young, but already the sector is seeing significant growth and change. Launching as small communities comprising a few nascent voice-over-broadband providers, the services now are signing up major carriers, refining their business models and facing new competitors a sure sign of success.

While VoIP is becoming pervasive, most VoIP service providers remain islands of service disconnected from other VoIP service providers except via the PSTN. But VoIP peering providers are making inroads quickly into that growing market, enabling direct VoIP-to-VoIP connections that are less costly and of higher quality.

So far, the two most prominent providers of service have been Stealth Communications Inc., which operates the Voice Peering Fabric (VPF), and XConnect Global Networks Ltd., based in the United Kingdom. A new contender just announcing its service in mid-February is IPeerX Inc. Neustar Inc., which has played a role in traditional peering is said to be eyeing the transaction aspects of peering, while Equinix Inc., which provides IP peering, is said the to be looking at a similar service for voice packets.


Stealth has scored a coup announcing this month AT&T Inc. has joined the VPF. The carrier will provide access to its nationwide long-distance network to all members of the VPF through direct VoIP connection. This will save the members the expense of provisioning PRIs and setting up gateways in order to terminate traffic to the PSTN.

AT&T will not yet peer traffic as VoIP, which is a big step for a company like AT&T, says Shrihari Pandit, CEO of Stealth Communications. It also will not participate in the VPF communitys settlement-free peering. Multilateral peering will grow, says Pandit, but it will still take time to move a lot of traffic onto VoIP. But, until then, this will allow companies like AT&T to understand how it functions and for VoIP peering to mature.

In addition, Stealth recently added to its stable of carrier members XO Communications Inc., one of the largest CLECs in the United States. And Stealth has been chosen to provide VoIP peering services at One Wilshire in Los Angeles, the leading telecom hotel on the West Coast.

XConnect, too, has signed up prominent new customers, including most recently a consortium of five Dutch cable companies providing VoIP to nearly half a million customers. They are doing peering, not just to get rid of minute charging, but to create true connectivity, island to island, so to speak, says Eli Katz, founder and CEO of XConnect.

Katz anticipates 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. Settlement still will be with us for a while. What we are seeing is the beginning of settlementfree relationships.


Newcomer IPeerX was built on the more than 100 VoIP companies that currently peer with Free World Dialup, the free VoIP service established by pulver.com, and now counts 130 VoIP entities as members. The companys revenue plan is somewhat different from other providers. Fees are on a per-call basis, and are only for completed calls.

In addition, IPeerX will offer rulesbased routing, which allows service providers to set thresholds for price and quality, and IPeerX will complete only those calls that meet those criteria. IPeerX also provides settlement for special features, such as information services (e.g., weather and sports) or multimedia calls. Further, the company will be adding support for presence management, which will allow users to be tracked to their preferred device, and address bridging, which allows users to place a call without using a phone number, such as to an e-mail address. According to IPeerX, its services also can apply to other forms of IP communication, such as video calls, instant messaging and short messaging service.


Even though it is really a nascent service,VoIP peering already is maturing its features. One of these is fully scalable ENUM, a service important for carriers and enterprises as numbers begin to move onto VoIP en masse.

If you think about how local number portability works today, numbers are ported in quick order and it all works really well, says Don MacNeil, vice president of carrier service operations at XO Communications Inc., a customer of Stealths Voice Peering Fabric. As we get into ENUM, coincident with the initial peering, we are beginning to do voice peering with companies that are not necessarily accustomed to operating communication, especially voice networks, such as large enterprises. So, while local number portability is good from an operational standpoint, ENUM has to get more maturity. The notion of an enterprise tracking and listing numbers completely on an individual basis represents a management challenge.

All VoIP peering service providers are set up to perform settlements. And settlement-free peering is a new idea in voice, but one that is well-established on the Internet, generally. Dubbed multilateral peering by the industry, the concept is that by signing up for a VoIP peering service, a service provider joins a community of other VoIP providers that exchange traffic without settlement within the operating rules of the VoIP peering service. In multilateral peering all members of a peering service agree to policies, such as publishing all phone numbers in a registry and providing access to that information for free. There also may be policies about protection of that information so that commercial rivals do not have access to it except to terminate calls. Further, there also may be policies about security and the quality of traffic sent to the peering service.

We see that, when discussing connectivity between voice-overbroadband players, and they want to peer with another voice-over-broadband provider, they prefer settlement-free, says XConnects Katz. We anticipate that MSOs (cable operators) in the Netherlands will be settlement-free relationships. So we are seeing increasing take-up of the concept of settlement-free.

Multilateral peering is more than a convenience, Katz says, it is vital for the emerging IP-to-IP communications to gain rapid global penetration.

Some feel VoIP peering has potential drawbacks, particularly if it emulates current traditional peering. The more VoIP islands there are, the less their value is, but if everyone wants to have connections between VoIP islands and everyone jumps into the idea of a VoIP clearinghouse, you are replacing one set of islands with another set of islands, says Henry Sinnreich, CTO at pulver.com, and a longtime contributor to SIP efforts in the Internet Engineering Task Force (IETF) Also it is not a scalable business. If three carriers use settlement house A and others use B and in China they use C, that is not scalable. You would have to have a lot of arrangements, complete with meetings with lawyers and complex technology behind it.

SPEERMINT: Peering More Than Voice

There is a new standards effort in the IETF (Internet Engineering Task Force) surrounding peering, dubbed SPEERMINT (Session PEERing for Multimedia INTerconnect). The name itself explains the groups goals: Peering will be important for all multimedia communication, not just voice.

The groups mission statement reads: While voice calls are the primary motivation for this today, other forms of real-time communication are and will continue to evolve as natural additions to such peering. Therefore, the focus of this working group is best generalized to describe calls as sessions, and to note that such communications are inherently real-time in nature.

Specifically, the groups charter is to focus on realtime session routing architectures for Layer 5 networks and the applications where they might be used.The work will specify various types of application flows, such as signaling and media, and both trunking and peer-to-peer flows. Further, SPEERMINT will develop mechanisms to provide feedback on network operation, such as congestion control, so dynamic policies may be used.

For the future, the group may seek to expand its work to cover QoS mechanisms or Layer 2 and Layer 3 peering to support real-time session peering.


AT&T Inc. www.att.com
Equinix Inc. www.equinix.com
IETF (Internet Engineering Task Force) www.ietf.org
IPeerX Inc. www.ipeerx.com
Neustar Inc. www.neustar.com
pulver.com Enterprises Inc. www.pulver.com
Stealth Communications Inc. www.stealth.net
XConnect Global Networks Ltd. www.xconnect.net
XO Communications Inc. www.xo.com

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