Peering between networks is nothing new. It has been a part of conducting business for Broadvox and IP Service Providers for years. It is getting a second look as the possibility of free IP calling globally nears. Companies like Skype and Google are exploring how to take advantage of IP peering arrangements to reduce the cost of calling for their customers and members. Although, both companies use other means to generate revenue. Two other carriers focusing on peering as a mechanism for lower prices include VPF and XConnect . I discussed them and other players in an earlier blog series, which we will revisit before the end of the year.
There are three potential peering arrangements:
· Bilateral - between two carriers usually with a negotiated traffic transfer cost.
· Multilateral - between more than two carriers with or without a negotiated transfer cost
· Private peering - a point-to-point connection between two carriers usually without a traffic transfer cost.
The concept of peering originally did not include traffic transfer charges. That changed as the business grew and carriers faced a disparity of traffic volumes between large carriers and smaller carriers. Today, carriers preempt transfer chargers by announcing that they will offer settlement free peering. By example, Broadvox offers settlement free peering.
As peering grows, the lower cost will be passed along to customers. The future of IP communications depends upon peering if we are to offer end-to-end IP calling leveraging new features and applications.
IT Expo opened yesterday and I thought the sessions were well attended. The exhibits open later today. We are also launching a new IP Man Adventure today called "...saving the 2009 IT Expo." Check it out for a break today.
See you on Friday...