Posted: 04/2000
Value-based
IP Billing Prompts
Standards Debate
By Peter Lambert
Converged telecommunications services billing stands on the verge of radical changes this year. Service providers face the tantalizing prospect of measuring and charging for every bit, byte and onscreen click that occurs within the Internet-based services they offer.
Yet the question of which methods to use in managing and exchanging all those measures remains in play, and a debate rages regarding how much standardization is too much, too soon.
Developers of Internet protocol (IP) usage monitoring say the end game, rating and billing platforms, will be a community of service providers freed from the bondage of one-size-fits-all, flat-rate IP billing. With next-generation tools in hand, service providers will define and quickly launch new services priced according to resources actually used and according to the value the end user places on the content carried in IP packets.
For the moment, however, the abundance of options for what to measure and how to value each component of complex services presents as many challenges as opportunities for those designing next-generation billing systems. If the sky is the limit, what kind of engine, wings and cockpit should be built to get there?
Standardization Efforts
To begin to answer this question, an industry consortium of vendors and service providers set out last June to develop some common interfaces among the systems in the IP-billing food chain. They included systems designed to collect usage data, to apply billing metrics or analysis to that data, to generate the bills, and to manage revenues among multiple players in the service distribution chain.
This consortium, the IPDR Working Group (www.ipdr.org), hopes to present a specification for a common IP detail record (IPDR) format by June.
Somewhat akin to the well-established call detail record (CDR) in circuit-switched telephony, the IPDR would specify a common definition for each network activity, and it would establish an open format that stores data about the activities in a record that could be used by any network service provider.
In practice, a mediation system would distill the raw usage information into a call record, which would be forwarded to the service provider, where a range of rating, billing, provisioning and other back-office system software applications could be applied to it.
Consensus on how flexible and extensible such a record can become remains incomplete. In late January, for example, one leading IP mediation system supplier, XACCT Technologies Inc. (www.xacct.com), an IPDR member, put its source code for IPDR implementation into the public domain. XACCT's aim, says Anil Uberoi, vice president of marketing, was "to circumvent the whole IPDR/no IPDR debate.
"No two customers are doing the same thing, so they all want the option to use different parameters based on the demographics of their users, and this is where we differ with IPDR, which wants to force a fixed subset of metrics on the service provider," Uberoi explains.
XACCT agrees with the group's choice of the extensible markup language (XML) standard to present data. However, Uberoi says, "we don't want to mimic what happened in the telecom space," where limited record formats limit the launch of new, innovative services.
"Any fixed format will get outrun in months," he says, adding that in its present form, IPDR is one among many formats the XACCT usage system can configure and output on the fly.
According to Matthew Lucas, president and co-founder of usage rating engine vendor startup Rate Integration Inc. (www.rateintegration.com), a standard format for interchange of call data information is needed "to get away from expensive, proprietary systems.
"IPDR has the right membership to answer what a voice over IP or hosted application or video record should look like," says Lucas, who is also vice president of Telestrategies Inc. (www.telestra.com), the consulting company that co-founded the IPDR Working Group with AT&T Corp. (www.att.com) and XACCT competitor NARUS Inc. (www.narus.com). "What are the elements that should be included? That's where we need consensus."
Luke Miller, IP mediation product manager for billing vendor Convergys Corp. (www.convergys.com) and an IPDR board member, suggests such consensus can remain an evolving thing.
"The philosophy is, rather than try to solve every problem out front in an environment that is seeing new services launched virtually every week, IPDR has instead put a stake in the ground in the form of a base set of parameters for multiple service types now, and then the very extensible XML technology can be used to evolve those parameters as new services evolve," Miller says.
He agrees with Lucas' estimation that IPDR likely will issue a first version of the specification following the issue of a draft spec for industry comment during the first quarter of this year.
Other IPDR participants say they'll do their best to balance the interoperability afforded by the standard against the need to customize.
"It remains difficult to say where in the chain standard interfaces need to happen," says Rich Aroian, vice president of marketing and strategic alliances for ADC Telecommunications Inc.'s ADC Software Systems Division (www.adc.com). ADC, formerly Saville, like other billing system providers, is partnering with all viable mediation system suppliers. "It may never be totally plug and play; the client base will drive the answers," Aroian says.
Tools at Hand
XACCT's free source code release, "is an aggressive move that bodes well for getting industry recognition that it's important to collect information from multiple points in the network," Aroian adds.
Indeed, with network management systems and software monitoring agents deployed throughout most IP networks, the tools are at hand to collect a multitude of data on resources used--from routers, switches, gateways and end-user devices to name and authentication servers to data center servers and even to the applications and content residing on those servers.
Given this raw data, service providers can contemplate defining and rating services based on time, distance, how much bandwidth was used, how many packets were dropped, what quality of service (QoS) mechanisms were applied, and what type of service or application was used, such as voice or video.
Usage metrics might even include the timeliness or the relevance of the information to the user, such that a stock quote service might be priced and audited based upon the real-time delivery performance of network devices end to end, from server processors to backbone routers to access devices.
Distilling the raw data into call record components is the job of mediation systems like XACCTusage and NARUS' Internet Business Infrastructure, which are designed to mediate between more than 1,000 types of network devices on one side and dozens of business support systems on the other. The mediated call records are then run through rating algorithms to generate bills, as well as through other applications including fraud analysis, churn analysis and capacity planning.
IPDR's efforts to develop a universal language for this call record exchange reached a milestone in early February when mediation system providers Hewlett-Packard Co. (HP, www.hp.com), NARUS and XACCT joined with billing system providers Convergys and Daleen Tech-nologies Inc. (www.daleen.com) for a live demonstration of IPDR at Telestrategies' OSS 2000 conference in Orlando, Fla.
The demonstration showed how service provider business models soon will multiply in type, says John Yin, chief technology officer for Daleen, which voices support for XACCT's open source code and a truly extensible IPDR specification.
Yin notes the new models will grow more subjective than the four basic models now used: advertiser-supported and free to the end--user, monthly flat-rate, usage-based, and transaction-based.
"Ultimately, they will bill based on the value of the service to the end user, and while perception of resources used or transactions can be pretty consistent, perceptions of value differ from user to user," Yin says. "That requires an infrastructure that can do personalized service definition, pricing, billing and delivery, and many billing companies with older systems will have architectures that are too inflexible to do this."
Most industry officials agree the challenge in designing more flexible rating architectures is in how to make it easy to define the business logic behind each new service such as what network devices to control, how to order, how to provision, and how to itemize the bill.
Where first-generation billing systems embedded business logic inside their core in the form of "hard" software code, such logic has migrated to adjunct logic tables in second-generation systems.
It has gone to "expression-driven" languages in emerging third-generation billing systems, says ADC Software Systems' Aroian.
"Older, monolithic, hard-coded systems hold back the rapid definition of new services and rating parameters," he says. "Our most recent products instead combine flexible expression language with extensible programming interfaces to enable service providers to plug in new definitions without changing the core."
By modularizing their business logic into combinable and recombinable objects, billing vendors including ADC, Convergys, Daleen and TeleKnowledge Inc. (www.teleknowledge.com), which recently moved from Tel Aviv to Boston, aim to enable a service provider to custom define business processes, and then to assemble those processes into a new service "plug-in" without adding to the complexity of the core billing platform.
"Service-specific and network-specific information stays out of the core," says TeleKnowledge President and CEO Oren Glanz, who adds this decoupling of service definitions enables his company to sell its Total-e system as either a standalone or an adjunct to legacy billing systems.
Further, billing system providers are leveraging standards such as Lightweight Data Access Protocol (LDAP) for data retrieval, and Common Object Request Broker Architecture (CORBA) for object exchange, to open individual components of their systems to outsiders.
"We can serve as either an LDAP server or client in a larger system of systems," Glanz says. "Every object in our system is open to the rest of the world, so every step and transaction and command in our system can be initiated by any surrounding, outside, third-party system. That's the real test of openness."
Rating Value
As the multitude of usage parameters grows, the leap in complexity will be big, says Sanjay Patel, director of IP Billing Solutions marketing for Convergys, which is applying its experience supplying wireless carrier billing systems to IP service billing for carriers including Level 3 Communica-tions Inc. (www.level3.com).
"For a company hosting music, the music server must generate usage data, and with IPDR, the service provider now has a standard into which that data can be formatted and passed up to the billing system, regardless of which mediation system captured it," says Patel. "Then the service provider can determine his own rating parameters, which could be that this is a top-10 song and is worth more, or maybe that this customer has watched two movies at a partner host, and he gets five free music downloads."
Assuming cooperation between mediation and billing vendors solves key questions related to rapid service definition, collection, formatting and exchange of usage information, other challenges remain in the areas of custom service provisioning and partner compensation. For example, if a service provider ties the rating of a particular premium service to the provisioning of premium QoS or class of service (CoS) levels in the network, then the service rules must define how to rate usage after the fact, and it must provide rules by which network routers and other devices are instructed to provision priority treatment to that service when the user accesses it.
Toward that end, billing vendors are joining together to integrate their systems with network equipment management providers. For example, TeleKnowledge is working with Siemens AG U.S. spinoff, Unisphere Solutions Inc. (www.unispheresolutions.com), whose Universal Management System is designed to let end users select a telecommunications service from a web portal.
"They will carry out the actual provisioning, while we provide the parameters specific to each customer," Glanz says.
New billing systems also will have to support usage- and value-based rating, along with business rules to manage complex
revenue-sharing relationships among application service providers (ASPs), content owners, web portals, electronic commerce providers, and network service providers. All of these are working together to create distribution chains.
"Partner management is becoming a major issue for everyone, especially ASPs," says Daleen's Yin. Consequently, Daleen acquired InLogic Software Inc. last fall, which adds customer management and partner management components to Daleen's billing package.
TeleKnowledge also offers a suite of partner management applications. "Business rules must be applied to maximize revenues for each party," says Glanz.
All this complexity will have to scale to hundreds of thousands, if not millions, of users per system, notes Convergys' Miller.
"Rate plans will be very complex, even though the consumer may see only 'Gold Service' on his bill," he says. "But carrier-grade billing requires that you can justify everything on that bill--that you're able to audit and show where all that data came from across the network."
Vendor cooperation this year may go a long way toward demonstrating whether such lofty goals are achievable.
"We're just on the cusp of custom metrics, and early applications will drive customer acceptance, which will happen sooner than later in this fast-moving environment," says ADC's Aroian. "The only thing you can do is create the most flexible system possible and remain customer centric."
Peter Lambert is features editor for PHONE+ magazine.
Ready for New Records?
By Peter Lambert
As emerging IP billing software vendors work with flexibility, old guard billing systems must adapt, or get out of the way.
Software vendors like Convergys Corp. (www.convergys.com) and TeleKnowledge Inc. (www.teleknowledge.com) are building modular systems that claim new levels of flexibility to plug in custom rating systems for any new service on the spot. The flexibility causes one to wonder if the old guard billing systems are ready for the onslaught of IP usage statistics and pricing metric options about to come their way.
"The Internet is going to grow the kind and number of access charges that have to be collected, especially with voice over IP," says Jeffrey Boozer, vice president of sales for Aptis Software Inc. (www.aptissoftware.com). "The big challenge with the Internet is mediating that usage--who is going to collect that data?"
To answer that question for its customers, Aptis entered a field trial in January with IP internetworking equipment maker Cisco Systems Inc. (www.cisco.com) and a customer that uses both companies' products.
"It does little good to carry the traffic if you don't know what happened, so we've begun the experiment with Cisco to try to make IP telephony work from usage data collection all the way through billing," Boozer says. "As soon as we can turn packets into call data records, many billing systems will handle that."
Also focused on partnering with data collection and mediation partners, billing system provider Integretel Inc. (www.integretel.com) has partnered with emerging IP usage monitoring software provider Portal Software Inc. (www.portal.com), and in January with voice over IP (VoIP) gateway provider Clarent Corp. (www.clarent.com), whose Command Center database provides eight usage measures per call, including quality of service (QoS) level.
"Whether the billing metrics are minutes or quality of service or bits downloaded for a song or video, the usage is tracked in units, and then we work with the customer to define how to rate events like a packet voice call," says Greg Calcagno, director of product management for Integretel, which also has formed a partnership with XACCT Technologies Inc. (www.xacct.com) and is pursuing agreements with other IP usage data mediation providers.
According to another established billing system and service bureau provider, Intertech Management Group Inc. (www.billingsoftware.com), customers recently have asked billing vendors for the ability to incorporate IP detail records, or IPDRs.
"We're seeing it appear on everybody's requests for proposal over the past month," says product director Kleavin Howatt.
For reseller customers and facilities owners, "you want to define services yourself--what it looks like, how it's priced--and that's where the flexibility of the billing and other back-office systems is paramount," says another Intertech product director, Matt Schroeder. "IPDR will more than likely become the standard, and we're testing it now against our rating engines and pursuing IPDR organization membership to be part of defining that standard."
Indeed, within a week after XACCT released its IPDR source code into the public domain in late January, Intertech downloaded the code and began its tests. Providing convergent billing and convergent billing with usage-based metrics will be a must, and Intertech says it will begin to provide each this year.
"Visit five different service providers and you'll see 15 new services, and even with one service like unified messaging, there are so many ways to measure," says Schroeder. "The challenge is to keep up with what all those new services are and what the capabilities of the new networks are, and then the customer will drive how you measure them."
If older billers find their own systems fall short of the flexibility needed to attach custom usage metrics to each new service launched, TeleKnowledge, Rate Integration Inc. (www.rateintegration.com) and other newcomers plan to decouple their own rating engines from their core billing systems and offer the rating engines as add-on front-ends to legacy billing engines.
In any case, the established players believe they maintain an edge in providing proven billing systems that support services that make money now.
"Our customers are migrating into IP, but they're still heavily focused on voice, which is where the money still is--$700 billion in voice revenues, versus only $40 billion in data revenues last year, according to Probe Research," Calcagno says. "We're in Silicon Valley and see what's coming, so we want in some measure to lead some of our customers into this, because it's inevitable."
