VoIP is by definition an IP based activity, yet often, when VoIP users connect to each other over different carrier networks, the calls are still routed through the PSTN.
The problem is that not all VoIP networks connect to each other, even though IP (or in some cases SIP) trunking between networks is often a standard feature on VoIP equipment. There are a number of efforts currently underway to at least partially solve the problem by creating broader exchanges that allow for multiple carriers to peer with each other and avoid the PSTN altogether.
One such effort is Stealth Communications' Voice Peering Fabric (VPF) which back in June 2005 launched an ASP market offering with the promise of an open marketplace for VoIP providers to interconnect.
Don MacNeil, executive director of carrier operations at XO Communications, explained that XO chose the VPF because the solution and the customer base was mature and offered the opportunity to peer with the greatest number of carriers and enterprises.
XO also represents a major win for the VPF.
"XO is one of the largest CLECs in the US to join the VPF," Shrihari Pandit, president and CEO of Stealth Communications told VoIPplanet.com.
Pandit noted that the VPF's value proposition is simple: It can help reduce operating costs and increase revenues.
"The VPF ENUM Registry will allow XO to send and receive telephone calls via the VPF with other VPF members directly, without traversing the PSTN," Pandit explained. "And the VPF Minutes Market will allow them to buy and sell wholesale voice origination and termination services. The VPF ASP Market will allow them to tap into SS7 providers such as SNET DG to access CNAM, LNP (local number portability) and other TCAP services."
In the case of dedicated VoIP gateway manufacturer VegaStream, the VPF is also a win-win situation.
Robert Brakeman, vice president of operations for VegaStream in North America, said that the Voice Peering Fabric program provides real economic benefits that, without question, provide a competitive advantage that VegaStream is able to pass on to customers.
According to the VPF's Pandit, "the VegaStream products let enterprise organizations maintain their existing infrastructure, allowing them to VoIP-enable legacy PBXs and attach directly into the VPF."
Equinix is also getting into the VoIP peering business by way of a partnership with NeuStar. Equinix is well known in the traditional Internet space as an operator of 15 Internet Business Exchange (IBX) data centers that provide direct interconnection with every major global network, enabling peering and traffic exchange.
NeuStar is developing something called SIP-IX, which is a suite of services that helps to enable VoIP peering. SIP-IX application peering services will include addressing directory services and policy-enabled shared routing, as well as traffic accounting and settlement information.
In addition to Equinix, Telehouse and the Amsterdam Internet Exchange (AMS-IX) are also initial partners of NeuStar's SIP-IX initiative.
Lane Patterson, director of research and development for Equinix, noted that partnering with NeuStar was a logical way to address the additional technological issues involved in SIP Exchange.
"Equinix's existing peering products focus on physical interconnection and IP layer routing for all the major Internet networks," Patterson explained to VoIPplanet.com. "SIP peering is more of an application interoperability function, where you must worry about things like voice feature negotiation between networks, what audio encoding schemes are supported between two networks, whether low or high bit rates are supported, and whether the call can actually be completed with an all-IP route, or must be handed off to a legacy phone network on one end."
While most IP-PBX vendors and VoIP services offer SIP peering on their own network or product, the NeuStar effort, like the VPF, is aimed at creating a wider peering capability.
"However, we don't see public ENUM being the initial driver," Equinix's Lane said. "We are focused on private ENUM, and NeuStar has been a major influencer behind ENUM standards for carriers, enterprises, and wireless networks."
"So the race today is to get the largest set of endpoints in the ENUM directory, so that calls can be completed on an all-IP path," Lane continued. "This is key to giving VoIP carriers control of their routing, as well as enabling new features that simply won't work on the legacy PSTN infrastructure."
VPF vs. NeuStar.
Certainly VoIP peering has the potential to shape up to be a competitive marketplace. While the NeuStar and VPF effort may be competitive, overall the fact that there is more than one choice for peering is a good thing, at least according to the VPF's Pandit.
"With the creation of more peering services, it provides the market with more competitive choice, features and options which is wonderful." Pandit said.
In fact, NeuStar's peering service in Pandit's view is actually complimentary with the Voice Peering Fabric. NeuStar's application resides on top of a network, whether it is the public Internet, Internet Exchanges, or private networks.
"The joint offer by Equinix/NeuStar certainly provides an alternative to what we have to offer but it's based on the public Internet," Pandit explained. "The VPF model aims to move Voice-over-IP traffic onto a private voice Internet providing PSTN like quality for service providers and enterprises."
Equinix's Lane isn't particularly concerned about the long-term competitive threat potential of the VPF to its business with NeuStar.
"We think the VPF is an interesting early-stage attempt at the VoIP peering solution," Lane said. "Still, we don't see them having the geographic scope, positioning with large carriers, or the depth of standards-making influence required to be a major long-term influencer."
According to Pandit, though, the VPF has processed over 17 billion minutes since Jan of 2005 making it one of the largest VoIP peering networks currently available.
The VoIP peering future
As VoIP use continues to grow, it is likely that demand for VoIP peering services will follow suit.
Bill Woodcock, research director for the non-profit Packet Clearing House research institute noted that voice peering can be done bilaterally between pairs of carriers, and that has in fact worked quite well for the few carriers who have a clear understanding of VoIP technology.
"But for the vast majority, which are solidly in the voice business and have only a peripheral understanding of IP technology, there's a valuable function served by companies like NeuStar, XConnect and Stealth, which can facilitate that interconnection," Woodcock explained to VoIPplanet.com. "Some of those companies, like NeuStar, understand the IP peering space well enough that I think they're likely to make themselves invaluable and persist in the long term."
For XO Communications' Don MacNeil, voice peering is not necessarily a must-have, but it does serve as a great catalyst to enable business opportunities and the evolution of next-generation services.
In the final analysis, it's all about enabling choice.
"One of the great things about a communications platform based on IP is the breadth of choice it gives equipment vendors and customers," VegaStream's Robert Brakeman said. "We think voice peering adds to this choice and enhances our value proposition."
"While it's still too early to say that any one thing is a "must have" in order to operate a VoIP service, I believe it is safe to say that voice peering is going to be important to many providers of VoIP service."