negotiationResolving how to exchange traffic in a VoIP world will be critical to a successful TDM-to-IP transition. But as an event hosted by trade association USTelecom on Friday illustrates, VoIP interconnection is a complex issue about which different interest groups have substantially divergent views.

On hand for Friday’s meeting were stakeholders representing incumbent and competitive carrier interests – and not surprisingly, they did not reach a consensus. But the event was useful in outlining the issues that must be resolved.

The Status Quo
Current voice interconnection requirements apply only to incumbent local carriers, explained Bennett Ross, a partner with law firm Wiley Rein, at Friday’s event. Three requirements must be met before an incumbent is required to interconnect, he explained. These include:

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  • Request must come from a telecom carrier (ISPs and cablecos aren’t carriers)
  • The request must involve facilities and equipment
  • The interconnection must be for the purpose of transmitting and routing telecommunications

The federal government has given a lot of flexibility to states to go beyond federal rules, Bennett noted. As a result, he said there is currently a “patchwork of interconnection.” For example, he said some states require interconnection points to be on the incumbent’s network, while other states want interconnection to occur on the other carrier’s network.

Some or all of these requirements may not be appropriate in a VoIP environment.

Verizon’s VoIP Interconnection Agreements
Two companies that have grappled with what makes sense for VoIP interconnection are Comcast and Verizon. A year or so ago, the companies came to a VoIP traffic exchange agreement that eliminated some traditional requirements and added some new ones.

Since then, Verizon has used the Comcast agreement as a template for signing seven more agreements with companies such as Bandwidth.com, Broadlink and 365 Wireless, explained Verizon Assistant General Counsel for Federal and State Legal Affairs Curtis Groves.

As Groves explained on Friday, VoIP requires routing tables to be set up and the network has to know what type of transcoding to use. Load balancing is also important, Groves explained.

“With IP, you need real-time traffic management,” he said.

Another key issue that has to be resolved is where carriers will exchange traffic. While TDM rules required interconnection in every LATA, IP can reduce the number of interconnection points dramatically.

But where to interconnect also can be a point of contention. Karen Reidy, vice president of regulatory affairs for Comptel, noted that some competitive local exchange carriers serve specific regions of the country and will not want to be required to haul all of their voice traffic across several states to exchange traffic with other carriers.

Public Disclosure?
Other highlights from Friday’s event:

  • New capabilities can be made available to consumers when voice calls are completed end-to-end in IP format. For example, higher-definition voice could be supported.
  • Another potentially contentious issue will be whether large carriers should be required to make agreements public. Comptel would like to see that happen because its competitive carrier members would then be able to essentially duplicate existing agreements, eliminating the need to negotiate individually with numerous other carriers. But larger carriers have said they don’t want to be required to disclose the terms of existing agreements.
  • Hank Hultquist, vice president of federal regulatory for AT&T, said he believes VoIP interconnection will see some serious traction after standards currently under development within the SIP Forum and the Alliance for Telecom Industry Solutions are finalized.

What About Rural Carriers?
One downside to Friday’s event was that none of the presenters represented the nation’s small rural incumbent carriers – and the TDM-to-IP transition raises some unique issues for those carriers. Like some of Comptel’s members, these carriers serve specific geographic areas and will not want to entail the expense of hauling traffic over long distances for interconnection.

Another issue is that traditionally these carriers have covered some of their costs (which are higher in rural areas) through per-minute access charges on calls to their customers. But Hultquist said he would like to move to “bill and keep” traffic exchange where no money changes hands between carriers – and he is not alone in that desire.

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