A transformation is taking place in today's telecommunications environment. New investments and upgrades for the 20th century public switched telephone network (PSTN) have stopped, while investment in high capacity data (IP) networks is growing at a double digit pace. The build up of these high capacity networks has enabled VoIP to become a commercial reality in the new millennium. The VoIP market is no longer a niche or an ISP domain.

Major carriers have announced VoIP programs and are rapidly moving to an all-IP network. From 1999 through 2000, many of these carriers upgraded their IP networks or built new IP links around the world. Pursuing cost savings, major carriers were transferring circuit-switched long haul voice from the current PSTN environment to their IP networks. The downturn in the economy coupled with the deferring of diverse network expansion, has made integration an attractive proposition, as coverage is often less expensive to buy than build. Therefore, today the need for efficient, secure, and reliable interconnection has become paramount.

This new voice paradigm requires a mechanism to allow diverse networks to securely interconnect, authorize these interconnections, and track the costs or usage of such interconnections. In the PSTN environment, large telephone switches, SS7, and physical interconnection points controlled the exchange of telephony transaction between carriers. The major IP telephony vendors recognized this, and with the various standards bodies began developing open standards governing transmission, exchange, and record keeping of VoIP network transactions.

ITU developed H.323 and other such standards for VoIP networks, while the European Telecommunications Standards Institute developed the open settlement protocol (OSP) for settlement and reporting of VoIP exchanges between carriers.

Open Settlement Protocol
The open settlement protocol (OSP) is a client-server protocol which establishes authenticated connections between telephony network devices, allows a secure transfer of accounting and routing information, and enables inter-network service provider billing for any IP communication event, including, but not limited to, voice and fax over IP. The OSP standard adds significant value to IP telephony applications by enabling real-time, secure inter-IP domain call authorization, routing, and call detail reporting among the IP devices (gateways and gatekeepers, including H.323 gatekeepers, SIP proxies, and softswitches) and clearinghouse service providers.

An OSP server allows a carrier or consortium of carriers to facilitate an interconnect solution for itself and its partners to securely exchange traffic, guarantee the identity of each partner, authorize each and every telephone transaction, as well as account for the transaction from end-to-end. To securely exchange traffic, each participant is identified to the clearinghouse by means of public key infrastructure (PKI). Digital security is superior to access/password lists of first-generation network devices.

Interconnection Opportunities
With OSP, it is possible for a carrier to be interoperable with virtually all other carriers without maintaining a physical or business relationship with them. Instead, only one relationship has to be managed i.e. relationship with the clearinghouse. At present, OSP is providing interconnect relationships for over a billion voice minutes annually, and this number is currently growing at a double-digit annual rate.

OSP provides an easy entry into the international VoIP space, with minimal investment. Only a small investment in software and human resources is needed to realize a rapid return on investment. OSP is also a solution for incumbent carriers who are losing business to new market entrants. OSP enables to capture new VoIP traffic where PSTN traffic was nonexistent, provides lower cost termination, and the ability to generate new revenue streams, all without cannibalizing the carrier's existing PSTN network.

Implementing an OSP Solution
Today, carriers can interconnect with other service providers on a call-by-call basis by using an OSP server with a CDR manager and billing system. When an originating network device receives an ingress call, it contacts the nearest OSP server, which will authorize the originating device and send back a list of potential termination network devices serving the requested destination number. Included with the potential termination device list is an authorization token. The authorization token is an encrypted string, which is sent to the terminating gateway at call setup. By sending the token to the termination gateway, the gateway knows that the call has come from a trusted source, as only the termination gateway and clearinghouse know the public/private key combination. Using the termination list received in the authorization request, the originating gateway will try all termination gateways, one at a time, until a successful connection is made.

Routing tables maintained by the OSP server reduce the complicated configuration requirements for each and every network device. For each setup attempt from the originating network device to the terminating network device, an OSP CDR is sent from each network device to the OSP server and stored locally.

Multiple OSP servers can be used to provide carrier-grade availability; therefore, usage records can be generated at many different OSP servers. However, these records must be collected at a central point for CDR correlation. All the OSP servers on the network collect the usage records from the access servers. The CDR manager first, retrieves the records then assembles multiple OSP records into ratable, successful, and unsuccessful call detail records for the carrier's billing solution.

When CDR is created, it is placed in the queue for rating within the billing system. Each CDR is rated three times. The first rate is for the retail call, in most cases the ITSP does not know the retail customer, in which case the retail rating results in no charge. At the same time, the CDR is also rated for both origination and termination settlement. This gives the carrier full control of its network, enabling the provider to invoice the origination partners and to compare the invoices of termination partners.

Rate configuration and management, and performance require a flexible and highly optimized rating engine. Billing solutions should offer a telephony-numbering plan to ease the design of rate planning. A telephony-numbering plan defines all known country and area codes in the world, each associated with a location and time zone. When designing the rate plan, the user has to simply select location from the telephony-numbering plan, and need not worry about country codes or mistyped digits.

For each defined origination and termination combination, the rate plan must allow the specification of minute rates, setup fees (call attempt), and connect fees (successful calls) plus rounding, minimum duration, and tiered pricing, allowing the service provider to customize the rate plan to its exact needs. The rate plan must support time of the day and day of the week rating, whereby weekend calls can be configured at a different rate than calls made on weekdays. Finally, the rate plan must allow the service provider to plan future rate changes. Service providers terminating traffic in China could, for instance, run a promotion with lower rates to China for national holidays.

While the wholesale settlement process is inherently postpaid, thus eliminating the need for real-time rating of calls, billing solutions that offer real-time processing maximize system utilization by sending the correlated CDRs in a steady stream to the rating engine. This differs significantly from other systems where rating is done periodically in batches (every day or even once a week or month).

Applying OSP Clearinghouse in India
With deregulation, a host of new long distance operators now rub elbows with India's incumbent government operators-MTNL, BSNL, and VSNL. In addition, the large amount of traffic originating and terminating from the 22 cellular networks, and the need for an OSP clearinghouse strategy becomes clear. It will enable a secure and reliable CDR collection and settlement process between the diverse originating and terminating carriers.

Using an OSP clearinghouse billing solution, operators can limit their direct settlement traffic to a few lucrative or major market providers and the clearinghouse. The clearinghouse provides a single interface for settlement amongst the host of Indian providers. Additionally, OSP clearinghouse billing provides authenticated connections between gateways of multi-vendor types and enables a secure transfer of accounting and routing information.

Vishal Srivastava, country manager Digiquant India vishal@digiquant.com

Frank Estes and Morten Seifert are IP telephony product analysts for TransNexus and Digiquant respectively