While it is clear to all involved that peering IP networks will improve services and decrease cost, there remain some key issues to resolve. In order to avoid transport over the PSTN, the large service providers need to participate. However, they do not want to carry voice and other IP related traffic for free. After all, it is their PSTN network that is being circumvented. For pure VoIP ITSPs, paying to peer is difficult as well. Therefore each views peering with a different business model in mind.
"One is a bilateral settlement based on per-minute, per-call activity, and the other is settlement free. The relationship between the service providers is independent of the role the neutral facilitator plays in that. We provide products and services for both models. For a true peer-to-peer environment, bill and keep seems to be the more appropriate commercial model," said Eli Katz, CEO of Xconnect.
Xconnect and Stealth Communications offer/assist VoIP peering to a large number ITSPs. Each has seen good growth in their traffic and customer base. As their networks grow, they are drawing the attention of the ILECs and large European carriers. However, their entry will more than likely put at risk the fixed price model of most ITSPs including Broadvox. If that happens then prices may go up for many subscribers.
VoIP Peering will become the norm, as service innovation will be impacted if transport via the PSTN cannot be avoided. In particular new videos offerings will remain limited.
How does VoIP peering work?
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