Defining and Questioning the Value of VoIP Peering

Peering between VoIP providers has gotten a lot of press in recent months, but the session VoIP 3.0 – Interoperability in 2007, held today at COMPTEL PLUS, will do more than just rehash the definitions and prospects for VoIP peering. It actually will question the value of VoIP peering for service providers.

At least thats the question panelist Gary Coben, director of hosted consumer VoIP at deltathree Inc., plans to bring to the table.

If you interoperate with everybody, then ultimately voice just becomes free, and nobody can make any money on it, said Coben.

He defines interoperability in this context as the ability for a Vonage subscriber, for example, to call an AOL subscriber at no cost. Coben said different cellular service providers customers cant talk to each other for free and he doesnt think VoIP customers should be able to either.

He added that while the VoIP industry is experiencing a hypercompetitive/ hypergrowth stage and the universe of VoIP service providers is expanding, the cost of providing IP telephony services actually is increasing, and that will lead to a shrinking cast of characters in the industry. New requirements on E911, Universal Service and CALEA are making it much more expensive to manage IP networks, he explained. VoIP may sound simple, but it is a complicated product that requires a softswitch, a billing system, and a substantial legal department to deal with USF, E911 and CALEA, said Coben, whose company provides wholesale hosted VoIP solutions. You need telephony and numbers so you can terminate on the PSTN. Then you need to deal with customer care. You also need Web development.

When the VoIP marketplace shrinks down to less than about 10 service providers, it will make more sense to talk about peering, according to Coben.

While Coben is taking a hard line on VoIP peering, COMPTEL panelist Mark Richards, president of VoX Communications, advocates an open view to peering between the VoIP guys. He plans to use his time on the stage to stimulate a conversation about how the industry could agree on interoperability parameters within which most carriers could work. He said interoperability among service providers can be a challenge due to different signaling and codec compression techniques. One shoe certainly does not fit all carriers and there are pros and cons to most of the different popular handshakes and preferred standards, he said, adding IP peering will start to see some real traction in 2007 as carriers have now begun to move past the challenges of their own network topologies to figuring out how to further reduce their own costs by looking at others as partners against the RBOC monoliths and not the competition.

Also on this panel is Mike OBrien, vice president of marketing and business at Syniverse Technologies Inc., and the session leader is Gary Kim, editor in chief of VoIP Business News and ChannelVision.

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