I recently had a chance to speak with Steve Heap the CTO of Arbinet regarding what is happening at the company. Although I have known Arbinet for about a decade, it may be good to bring everyone up to speed on what this company does and where it sees things going. In addition, Heap gave me some ideas on how he sees the competitive environment and where the threats to his company may or may not lie.
Arbinet’s core business is a minute exchange where they take in calls from carriers and PTTs and determine the best way to terminate them.
The company has a few aspects to its business. Routing – it routes calls most efficiently, rating – it determines how much to bill for the call and money flow – ensuring the proper company gets billed and paid accordingly.
Heap shared the fact that his company is agnostic to interconnection mechanism as they handle PSTN and VoIP. As you might imagine, he explained there is a rapid rise of VoIP as an interconnection mechanism and the company does a fair amount of conversion between PSTN and IP calls.
In May of 2006 the company decided to partner with NetNumber to launch the Spider Registry which is an open ENUM database approach available to multiple peering companies. For more on the Spider Regsistry be sure to read Cutting Out the Middleman by Hunter Newby and VoIP Peering Revs Up from Zippy Grigonis.
This open registry currently consists of 320 million customer numbers – represents 92 networks, 52 countries.
Heap went on to explain the advantages of an open registry – as an independent organization that does no rating, signaling or routing. Another benefit is any registrar can make use of the registry. He continued by saying in this model, VeriSign, NeuStar, Arbinet and XConnect could be registrars. Heap confesses the vision is not there yet but he believes NeuStar may be moving in this direction.
Heap contrasts this open approach to a more closed model like XConnect where the company operates a combined registry and peering organization where your numbers are in their own systems and databases. He refers to this as a “closed community,” and says you could however add your numbers to numerous registries.
Arbinet’s CTO then went on to explain he feels peering is poorly defined. He says, “Some think it is VoIP to VoIP calling while others think its free termination. Our view is peering is one service provider directly routing calls to another provider.” He continued the thought by saying Arbinet doesn’t assign a particular technology to this or impose a particular settlement model.
I am paraphrasing a bit but the next thought was, If one carrier wants to bill and another wants to pay… Who are they to stop it?
He went on to explain Arbinet does voice peering. They peer any technology and they convert the voice in the middle if needed. He reiterated this interconnection will become more VoIP-centric in the future but for now its mixed.
I asked his thoughts about the VPF or Voice Peering Fabric and Heap explained he believes Shrihari (referring to Shrihari Pandit the founder of the VPF) and the VPF have done a masterful job of marketing. He says what the VPF operates is an Ethernet transmission network which allows for example to connect a location in Dallas and Boston.
He says the vast majority of the traffic runs across the carrier transmission network and it is an enormous stretch to call this a voice peering fabric… “They could be transferring music or video,” he explained.
“Voice means some part of the equipment ensures some of the bits are voice calls,” he explained.
When you say 200 billion minutes [of telephony are flowing across your network] it is like saying one of the transatlantic cables transmit 100 million minutes of voice traffic. No submarine cable provider would call their cables a peering fabric.
Having said this, he sees the VPF as interesting and thinks it is a good service to provide private transmission between carriers.
Heap confesses his company competes more with XConnect than the VPF anyway.
He says NeuStar with its SIP-IX service is another similar entity but he hasn’t seen anything from NeuStar about customers using the service.
Arbinet is doing its best to grow the size of the registry by getting more service providers on the platform. Why? The more service providers on the network, the less providers in the middle of the connection meaning the quality of the calls get better and the cost goes down.
Their technology investments are focused on ensuring the right routing for each call which entails routing them uniquely. More recently this is extending into mobile portability in Europe.
While many carriers would look at 5-6 digits of a phone number prior to routing – Arbinet looks at 10-12-14 in real-time with the goal being eliminating chargebacks as you hop between carriers.
Over the past years, the interest level in voice peering has grown tremendously based on increased vendor involvement in the nascent industry and standing room only conference sessions on the topic at Internet Telephony Conference & Expo. Arbinet has been at this game since the late nineties and is certainly one of the major players moving this technology forward. As always, the TMCnet editorial team will be covering all aspects of voice and VoIP peering allowing all voices to be heard.
See also the Executive Suite interview with Steve Heap where he makes some salient comments about eBay’s Skype acquisition.