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2001 News

By Kevin Mayer


Death, Taxes, And IP Billing

Were he alive today, Benjamin Franklin might amend his famous remark that in this world, nothing is certain but death and taxes. After reviewing recent trends in converged communications, he might conclude that usage-based IP billing, too, was unavoidable. And, if only by way of consolation, Franklin might also observe that his amended list -- death, taxes, and IP billing -- would array unwelcome events in order of decreasing gravity. Such consolation wouldn't satisfy everyone, as Bob Metcalfe, of Ethernet and "Metcalfe's Law" fame, would no doubt attest. A few years ago, Metcalfe argued the merits of a pay-as-you-go Internet, moving beyond or supplementing flat-rate service agreements, implementing metering schemes of various types. Metcalfe soon learned that his pay-as-you-go Internet idea was anything but popular. He cited the results of a CNN poll in which 93 percent of the respondents said they'd be unwilling to pay as they surfed the Internet. Anecdotal responses were even less forgiving. Several condemned the idea in the harshest terms, and Metcalfe heard himself denounced as a "greedy capitalist pig" and "worse than Hitler."

Given the popular and even vociferous resistance to the pay-as-you-go Internet, it would seem that innovative metering schemes and more elaborate billing infrastructures would have to struggle for acceptance, at least among Web-surfing, e-mail-exchanging consumers. On the other hand, the distinctions between telco-style and ISP-style operations (and revenue generation) are not as clear-cut as they once were, certainly not for business users, many of which are exploring voice/data service alternatives, which range from simply consolidating voice and data traffic over a common data transport infrastructure, to complex hosted communications solutions.

Business users might value metered billing if only to help them determine which personnel and activities accounted for their communications costs, and in what degree. Also, businesses might exercise more discrimination in the enforcement of service level agreements. Finally, providers themselves may need to cope with more complex settlement arrangements, as telcos implement "next-gen" infrastructure and deploy enhanced services; as ISPs and data CLECs begin offering voice services; and as new entities, such as communications ASPs, begin offering virtual PBX, unified communications, and video services.

More to the point, we may learn that current billing arrangements (flat-rate or unlimited usage) are simply too crude for businesses that might actually benefit from billing data -- if not the obligations represented by the bills themselves! Also, businesses could benefit from working with stable providers, as opposed to providers struggling with razor-thin margins. That is, providers, given adequate billing solutions, could demonstrate the value of "value-added" services, and rely less on delivering commodity services.

FROM PLAUSIBILE TO ACTUAL

These rationales for metered or usage-based IP billing, while plausible, may not reflect what businesses or service providers are currently willing to contemplate or implement. Is IP billing a reality? Are practical solutions available? And, if so, is there demand for IP billing? Answers to these question, however partial or conditional, would be welcome, especially since technology in general, and telecom in particular, arouses nothing so much as skepticism, which is to say, unsatisfied demand for business models capable of convincingly demonstrating revenue-generation potential.

We sought answers in an informal survey of companies specializing in billing and mediation. (The companies we contacted are listed in the table accompanying this article.) We asked these companies to focus on the issue of IP billing, particularly as it related to the implementation of next-gen services. That is, we deliberately narrowed our focus, distinguishing between traditional and nontraditional billing. (By traditional, we mean unlimited usage or minutes of usage or distance as a key metric; by nontraditional, we mean per-byte or per-packet billing, or billing tuned to QoS level, or billing keyed to applications used.)

Billing proper is an immense, multi-variegated subject, encompassing layers of legacy equipment, densely tangled integration challenges, and a profusion of proprietary formats. Accordingly, billing in the telco space supports many billing specialists, not all of which have any definite plans to implement IP billing, or even plans to partner with companies demonstrating IP billing expertise. But many have at least announced they are pursuing IP billing. Such companies are the ones we contacted.

In our conversations with these companies, we cited two key trends: 1) the deployment of packet-oriented multi-service networking platforms (such as softswitches, feature servers, and VoIP gateways), which promise to deliver greater flexibility in the creation of enhanced services; 2) the growing interest among service providers for realistic business models, beyond flat-rate and unlimited usage. We suggested that these trends, in combination, indicated that IP billing and mediation will assume more importance, particularly with respect to challenges such as self-provisioning, quality of service, and usage-based and value-based billing.

When we presented this speculation to the companies, we provoked a range of responses. A few companies indicated that they saw no demand for next-gen mediation and billing, and that they hadn't seen any urgent need to introduce next-gen capabilities to their offerings. Most companies indicated that their products already had next-gen capabilities; however, most companies also indicated that the most advanced capabilities were seldom used, if ever. Finally, a few companies noted that they had enthusiastic customers that were actually using (or at least experimenting with) the most advanced capabilities. This distribution, which is typical of the evolution of any technological innovation, suggests that a trend towards next-gen mediation and billing is at least starting. But how quickly will the trend unfold? To answer that question, we will probably have to look at billing and mediation developments from time to time, taking notice of partnership and deployment announcements, and assessing the growing capabilities of the platforms. The pace of development and deployment will probably quicken with increased availability of broadband connections.

RESERVATIONS REQUIRED?

Overall, progress in the provisioning and billing of communications services demonstrates a convergence on the middle. At one extreme, we have relatively crude, undifferentiated, IP services, billed according to flat-rate, unlimited-use metrics. At this extreme, bandwidth is a commodity, service providers have little or no ability to differentiate their services, and customer churn and shrinking margins are constant threats. At the other extreme, we have highly customized, intricately integrated business support systems and operations support systems. These systems may support differentiated service deployments, but only after much painstaking and time-consuming development. Hardly the scenario consistent with the quick identification and exploitation of business opportunities.

Such are the extremes. But what might we find between them? We can get an idea by way of analogy. Let's think of commodity-grade IP services as an all-you-can-eat buffet. (We're being generous here. We could as easily have likened such services to a feeding trough.) And let's think of systems requiring lots of custom programming as a five-star restaurant, where diners encounter a limited menu of highly priced dishes, and where the proprietor employs a haughty maitre d'hôtel, ingratiating waiters, and accomplished chefs. Somewhere in the middle, you might find a self-service cafeteria. Here, patrons may take what they like. However, unlike the all-you-can-eat buffet, the self-service cafeteria allows proprietors to keep track of what individual patrons select, and the proprietors may bill accordingly.

We may take the self-service cafeteria option as being analogous to usage-based or value-based IP billing. With this option, we may identify several advantages over the all-you-can-eat buffet. First, ordinary patrons don't end up subsidizing the gluttons. Second, the patrons who partake of the richer dishes are the ones who bear the costs of those dishes, without imposing a share of the costs on the patrons with simpler tastes. Third, information collected at the cashier's counter may guide proprietors in the creation of more attractive selections. Also, proprietors could offer discounts on over-abundant dishes, or devise special pricing schemes to encourage dining during off-peak hours, or think of ways to "bundle" appetizers or desserts, perhaps even offering coupons to valuable repeat customers.

We can easily translate the advantages of the self-service cafeteria into attributes of service providers relying on usage-based or value-based IP billing. At the cafeteria, we keep track of how much food individual patrons consume, plus we account for the relative value of different dishes. Also, we have some notion that some customers may be more profitable or valuable than others, and may thus deserve special treatment. Similarly, a service provider, with the benefit of an IP billing solution, may track bandwidth consumption and application use by individual subscribers, and ensure that bandwidth consumption attributable to latency-sensitive applications (IP telephony or video conferencing) is priced higher than that attributable to latency-insensitive applications (e-mail or Web surfing). Or discounts may encourage network usage and bandwidth consumption during off-peak periods. Also, service providers may segment their customer base, distinguishing between highly profitable subscribers and less profitable (or even costly) subscribers. Such segmentation could inform account management and guide the evolution of pricing structures.

PRACTICALITIES

While intriguing, the possibilities of usage-based IP billing will remain just that -- possibilities -- unless mediation and billing solutions rise to the challenge of accommodating much broader and less predictable arrays of billing parameters than are currently observed by ISPs or telcos. Traditional solutions typically lack the flexibility and scalability to implement usage-based IP billing, at least with anything resembling economy. Next-gen solutions, however, propose an inherently flexible approach, that is, a modular approach.

When "modular" is the word, what is usually meant is a divide-and-conquer approach. With respect to billing, no longer will composite functions be encapsulated in one or another custom-engineered or proprietary solution. Instead, composite functions will be split apart, and ultimately reconstituted via standardized interfaces. Each composite function, or module, may be improved independently, without the need to disturb any other module.

Some modules may work at or interact with network equipment, including the thickening ranks of integrated access devices, routers, switches, gateways, gatekeepers, etc. Any of these devices may provide raw usage data, and the data may be packed into a standardized format. One candidate for a standardized format, the Internet Protocol Detail Record (IPDR), is being promulgated by the IPDR Organization.

As the organization's name suggests, the IPDR is analogous to the venerable call detail record (CDR), best known for its usefulness in traditional, circuit-switched telephony. Perhaps wary of anything resembling limited, traditional approaches, critics of the IPDR question whether any established data format, network activity definition, or selection of specific parameters could long remain relevant, or avoid imposing its own limitations on new services. In any event, even IPDR supporters cite the need for provisional or contingent parameters, efforts toward an evolving consensus, and openness towards extensions, balancing the divergent imperatives of customizability and interoperability.

To return to the issue of modularity, we might emphasize that some companies will be, in the IPDR.org's words, "producers," and others, "consumers." The producers contribute systems that generate data about services; the consumers, systems that receive data from the producers and use it to generate usage records, chargebacks, billing invoices, etc. In between, you could place mediators (such as Hewlett-Packard, Narus, and XACCT), which may serve a kind of translating function between the many types of network devices, and the many types of business support systems, which may include systems for provisioning (for establishing services and capacity planning); billing, rating, and presentment (for analyzing data, applying billing rules, and generating the bills themselves); and settlement (for partner management, which includes dividing revenues among the providers participating in a service).

With so many layers of functionality along the value chain, cooperation among vendors will be crucial. From data collection and the scrutiny of packet headers, to the packaging of data into convenient formats, to the application of billing metrics, to bill presentment, to settlement, any service may involve systems from multiple vendors. To date, solving the interoperability problem among disparate vendors has required custom development, typically demanding months of programming and investments in the hundreds of thousands -- for each new service. Avoiding such uneconomical effort, by creating a standardized development framework, will likely be the key to enabling the profitable deployment of converged, next-generation services.

COMPANIES AND PRODUCTS

Abiliti Solutions -- NetworkStrategies (billing and customer care software); BillingCentral (billing ASP model of Network Strategies); EventProcessor (guiding and rating engine).

ACE*COMM Corporation -- N*VISION (processes, stores, and distributes records for OSS/BSS and decision-making. Includes data management and warehousing for real-time data acquisition and analysis); N*USAGE (data capture and collection. Collects and processes usage records from a variety of network elements, including IP and NGN, and produces billable records in standard formats); DCMS (data collection and storage).

ADC Telecommunications -- Singularit.e -- Billing platform. A suite of products, services, and enterprise application integration (EAI) connectors that allow communication service providers to build open, comprehensive OSSs. Singularit.e has three components: Singl.eView, FastFlow, and Metrica. Singl.eView is a customer management and billing product suite that provides a real-time, web-enabled, customizable view of customer, service and network information. FastFlow's service fulfillment suite automates broadband service order management, provisioning, and activation. Metrica, a service assurance suite, optimizes a network's efficiency and reduces costs by providing performance alarms, historical information and capacity and performance data.

AP Engines -- AP InterLink (network usage management and service creation); AP Billing Mediation Platform (network data mediation).

APEX Voice Communications -- APEX Billing System (ABS), a pre- and post-paid billing platform for both traditional and enhanced services (long distance, carrier, travel card, wireless, call back, IP, prepaid, voice/fax mail, information services, etc.). APEX Prepaid System (APS), a system providing prepaid calling, travel card, prepaid wireless and promotional services. The APS platform uses the same rating engine as ABS and integrates with the OmniVox Intelligent Call/Media Processor for complete call processing functionality. Both platforms are available for TDM or IP networks.

Apogee Networks -- NetCountant Accountability, a platform providing global 200 enterprises and global IP networks with the ability to identify, rate, and bill back usage to actual users and business units. The platform translates all network activity into financial terms. The platform provides visibility into IP network usage, thus enabling usage modification as well as the rapid implementation of new applications and services. NetCountant Billing & Settlement, a platform providing an end-to-end billing and settlement platform for ISPs, ASPs, hosting providers, CDNs, streaming media, storage providers, carriers and wireless data providers. The billing capabilities include real-time billing services and flexible service creation. The settlement capabilities include providing content distributors with a revolutionary capability to build revenue sharing systems that can scale to process billions of content transactions daily.

Convergent Networks -- ICView BMP, a billing mediation platform.

Convergys -- Customer care and billing solutions: Atlys (a global convergent solution for wireless voice and data providers); Catalys (a global convergent solution for IP service providers); ICOMS (global voice, video, and data solution for cable, broadband, and satellite providers); WIZARD (a comprehensive solution for multi-channel subscription television operators).

Daleen -- RevChain software suites automate and manage service providers' revenue chains (including customers, services, activation, order fulfillment and billing) internally in the back-office, customer-facing through the Web and with customer service representatives, as well as with partner relationships.

Danet -- Danet Usage Collector (system used to collect usage information from every type of network element, both traditional telecommunications elements and next generation element types); Danet Usage Converter (system used to convert proprietary usage information provided by the network to self-defined record formats, for input to application framework, most notably billing. System has a web-enabled front end to configure the conversion algorithms); Danet Network Provisioning Module (system that provides an automated interface to network elements, both traditional telecommunications elements and next generation element types, for service management, that is, activation, modification, and deletion. May "bolt" onto billing systems and order management systems).

Dataflex -- TGBM-Cisco (VoIP authentication and billing application); TGBM-VocalTec (VoIP authentication and billing application); Talking SIP (Voice applications and billing for SIP networks); Talking NT (turnkey voice applications and integrated real-time billing); SIP Mediation (SIP proxy mediation and postpaid billing).

Digiquant -- Internet Management System (IMS), a system providing activation, authentication, authorization, mediation, rating, billing, and customer care capabilities. IMS offers a wide array of service modules and supports a variety of access service technologies, including dial, cable, leased line, and DSL, as well as next-generation services such as VoIP, Voice VPN, MPLS-VPN, content, and mobile Internet. IMS supports WAP, GPRS, and CDMA2000, along with the upcoming UMTS. The company also offers the Internet Content Gateway (ICG), which provides a scalable, real-time service management and billing solution for the dynamic content market and is designed to complement Digiquant's IMS product for a complete internet content solution.

Digital Route AB -- Mediation Zone (next-generation mediation).

DST Innovis -- Intelecable (billing platform); RAMPS (usage-based rating engine agnostic to type of transaction. Currently supports telephony, VOD, and all its variations, such as SVOD, and Internet); e.bill.anywhere (YourAccounts.com's electronic billing presentation and payment).

EHPT -- Progressor, a multi-services billing a customer care solution, capable of billing for services such as fixed, mobile, and IP.

ESO Corporation -- CLEC Admin, a telecom billing and management suite. The product performs rating/discounting, and is a billing platform.

Hewlett-Packard -- Internet Usage Manager, a usage mediation and management platform. May be enhanced with the company's GPRS Mediation Solution for mobile data services and Dynamic Netvalue Analyzer for real-time usage analysis and business modeling.

Info Directions -- The CostGuard system (convergent rating, billing, and customer care solution for the MS SQL platform); the CostGuard ASP (convergent rating, billing, and customer care solution delivered from the company's self-hosted ASP); i-way (convergent rating, billing, and customer care solution for the Oracle platform).

Infozech Software -- EBILL (customer care and billing. Provides mediation and provisioning, credit card processing, Web interface for self-care and CSR, carrier cost comparison, trouble-ticket management, and prepaid calling card service); Inter Carrier Access Settlement, or iCAS (provides partner account management and billing mediation, call matching and reconciliation, carrier cost comparison, reporting and analysis).

Inovaware -- PRISM (rating/discounting, billing, provisioning, customer care, partner management, and marketing campaign management); Resolve (helpdesk).

Intec Telecom Systems -- InterconnecT (interconnect system for 3G billing); Inter-mediatE (convergent mediation for 3G billing); Inter-venE (fraud management); Maxi-routE; Omni-chargE.

iPass -- Global IP settlement, authentication, and billing.

I.S. Associates -- CommStats (VoIP network statistics reporting); TeleCount (VoIP telemanagement, including network statistics, utilization, mediation, rating, reports suitable for internal use or wholesale billing); TeleCount Enterprise Billing (everything in TeleCount plus wholesale and retail billing for prepaid and postpaid environments including a Web interface).

Kabira Technologies -- xDR, a billing mediation framework. Provides custom templates for billing solutions. Introduces solutions enabling the management of IP billing mediation, circuit-switched network billing mediation, GSM and GPRS billing mediation, pre-paid billing mediation, SMS billing mediation, content mediation, as well as QoS/SLA and fault management.

Lucent Technologies -- Arbor/ BP (billing and customer care platform); Arbor/ OM (order management); BILLDATS (mediation); Revenue Locator (revenue assurance).

MetraTech -- MetraBill (a native XML billing solution, designed for Web services); MetraPartner (native XML revenue sharing solution); MetraView (interactive, real-time bill presentation platform); MetraCare (Web-based customer self-care); MetraPay (a component that integrates multiple payment and settlement methods with MetraBill, MetraPartner and MetraView).

MIND CTI -- MIND-iPhonEX -- Performs IP usage monitoring, network data management/mediation, and rating/discounting. Provides a billing platform and settlement/partner management.

NARUS -- Business Infrastructure Platform, a meditation platform that sits between networks and OSS applications such as billing, provisioning, traffic management and decision support. Provides several ways to collect data from the pipes, in a way that has no impact on performance. Collection is done in real-time. Some applications require information in real time -- fraud, for example. But others, such as billing, may only need records once an hour, or once a day. The NARUS platform manages those requirements, and outputs the information in a format the applications will accept, including IPDR.

NeTrue Communications -- N-Voice (prepaid and postpaid VOIP real-time billing); N-Able (authorization, authentication, and accounting); N-Gage (VOIP clearinghouse and settlement).

Portal Software -- Infranet, a customer management and billing platform.

Rodopi Software -- Rodopi, a comprehensive provisioning, billing, and customer care software for ISP, IPP, ASP, ICP and telecomm. Customers can select services that meet there needs from flat-rate recurring services to usage-based billing services to services that allow the customer to use the service in several locations as well as roaming worldwide. The company also offers Rodopi MISP, which is Rodopi optimized for multiple-ISP installations, and which includes comprehensive provisioning, billing and customer care software for domain name Registrars and Registries. Other modules: Rodopi DN (modified Rodopi for use by domain names Registrars. ICANN accreditation required); Sierra 2.3 (RRP Proxy Server for domain name Registrars. Allows for quick processing of domain names search).

Sentori -- Sentori Billing and Customer Care System (Sentori's flagship product). The system includes several products: Sentori Front Office (IP service provisioning, order management, customer care); Sentori Open Mediation (IP network mediation, data collection); Sentori Back Office (IPDR translation and conversion, real-time rating and billing); Sentori System Administration (rate plan management, partner management and settlement).

Subex Systems -- Ranger (fraud management software for wireless telcos); OUTsmart (fraud management software for wireline telcos); INcharge (Inter-carrier billing verification software). The company also plans a global launch of a product in the electronic BSS domain

Tele-Flex Systems -- Genius, an integrated telecommunications billing platform that operates on the multi-tasking IBM server iSeries. Tele-Flex features integrated mediation for packet-based next-generation IP networks as well as legacy switched-circuit telephony.

Telecordia Technologies -- Next Generation Billing Manager, a rating, discounting, and billing platform supporting ICP, broadband, wireless, and wireline. (Powered by Daleen.)

TeleGea -- Emporium Enterprise, allows business customers to buy and manage telecommunications products and services online, while eliminating the confusion of bill presentment and payment by displaying, processing, and sorting invoices from multiple systems in one integrated view.

TeleKnowledge -- Total-e, an acustomer care,daptive billing and e-partner revenue management platform.

Telesciences -- Sterling 500i-IP/IN (IP usage monitoring and network data management/mediation); Sterling 5000-Data Processing Management System (IP usage monitoring and network data management/mediation); Sterling Data Server (network data management/mediation).

UshaComm -- Unicorn (relationship and revenue management suite); Medusa (mediation and provisioning).

XACCT Technologies -- N2B, XACCT's "Network-to-Business" platform, which encompasses these products: XACCTusage, XACCTmobile, and PacketSight. These products are for IP usage monitoring; network data management/mediation; and general network-to-business applications to support such applications as billing, fraud preventions, churn and customer care, business intelligence, and traffic engineering.

2001 News