Cisco Systems’ Billing Strategy

Executives at Cisco Systems, Inc. know that switches and routers are just part of the picture when routing ATM, frame relay and IP traffic. Now Cisco is looking to add software and billing functionality to its products.

The company is studying the downstream actions on the packets that traverse its routers and switches. Its NetFlow software, part of the router and switch Internetwork Operating System (IOS), captures network traffic data, and Cisco wants to make better use of that data and how it is processed by mediation through to the billing system.

The company has laid out a three-tiered billing architecture that flows from network elements to the billing system. Cisco is using third-party vendors to integrate its hardware and software. One partner, Telcordia, will bring its OSS products to Cisco's packet network in a deal that was announced in October 1998.

Cisco’s billing architecture focuses on the IP side; one application under development would allow cable companies to offer telephony services over their infrastructures. IP telephony over cable is in its earliest development stages--Cisco is running trials with cable operators and is moving to rollouts of the technology.

Cisco plans new billing structure

Cisco splits its billing architecture into three tiers. Tier 1 deals with usage data generation in all network elements that generate such data. “Effectively, this includes all devices like virtual switch controllers, dial-access concentrators, access/authentication servers, Layer 3 routers, and ATM and frame relay core switches,” says Kurt Dahm, senior marketing manager for Cisco’s Network and Service Management Group. “It’s hardware that generates raw usage data in formats like NetFlow, UDP SNMP, or RADIUS.” This data is detailed, even in raw format. Cisco also wants to increase the granularity and reliability of usage data, especially in cases of high traffic volume.

The collecting, aggregating, and correlation of raw data - in other words, mediation - occurs at Tier 2. Cisco uses its data collection products at this level, which include NetFlow Collector, StrataView Plus, Cisco Voice Manager and CiscoSecure Access Control Server. “Tier 2 is extremely valuable, not just as for collection of raw data coming from Tier 1, but [also as] a source of collection, further refinement, and parsing,” Dahm says. “This is also where you’re able to apply business policies, like demographics, to the data.”

Though Cisco's hardware can collect fairly detailed metrics on the data, the aggregation and correlation events need to occur on mediation platforms. For mediation, Cisco has partnered with Hewlett-Packard, Narus, and Xacct Technologies, Inc. In Cisco’s labs, these mediation vendors are receiving APIs that let the companies access different kinds of data flows such as LDAP, RADIUS, and SNMP. “They [mediation vendors] want us to tell them what these new, granular kinds of data are so they can do smarter things with the information,” Dahm says. “We’re allowing systems like our Access Registrar [Cisco’s RADIUS server] and Virtual Switch Controller [Cisco software that switches TDM calls across a data network] to put out the necessary information that’s required by the mediation systems.”

He says that more policy rule enforcement could occur at Tier 2. Some companies use relational databases and other tools to sift through usage, but most developers fail to take advantage of real-time feeds. Dahm also believes mediation companies are moving from aggregation and correlation to proactive market and trend analysis. “We’ll see a scenario where [mediation vendors] will start rolling out things like inclusion of RADIUS and directory data and H.323 information to get aggregated end-to-end information,” Dahm says.

Mediation's changing role

Mediation vendors will also move from raw aggregation and parsing to translating usage information into formats that can be used for any billing system.

“Right now, most providers are just trying to get bills out the door and do the cash cow stuff first,” Dahm says. “The next step is to take advantage of new data streams and aggregating them into AMA, IPDR, or just straight CDR for delivery to the billing system.”

At Tier 3, Cisco's architecture involves billing systems, customer care, and customer OSS. (See sidebar on Cisco’s billing and OSS partners). For Tier 3, Cisco wants to create open interfaces through which data and detail records of any format can easily enter billing systems and OSS. As part of its role in providing network elements, Cisco is enabling its products with the ability to provide voice over the network capabilities. Many companies already use Cisco routers and switches to move traffic - other than pure data - over a variety of infrastructures. Cisco has been supporting such protocols as H.323 and MGCP and building support for metrics such as QoS.

Videotron VoIP over cable rollout

Videotron, a Canadian cable company with subscribers in Quebec, is developing a Voice over IP-over cable rollout, a direct result of the Cisco/Telcordia alliance. Videotron offers digital TV service, dial-up and cable modem Internet access and paging to its 1.5 million customers. According to the plan, Telcordia would provide its call agent software (softswitch), OSS, and professional services. Cisco would bring to the table its Universal Broadband Router, AS5300 voice over IP gateway server, and its 12000 Gigabit Switch Router.

Even then, there was still a lot of work on some fundamental areas to get IP to run over the existing cable plant, says Mark Bakies, manager of product marketing for voice solutions in Cisco’s Cable Business Group. “Video signals have been run at fairly high frequencies, with the lower end of the spectrum experiencing a lot of noise," he says. "Now, through error-correcting protocols, cable companies can now use the lower parts of the spectrum for high-speed data or other signals.”

It was this lower end of the spectrum that was developed to handle IP traffic. Research to get IP signals to travel over the previously underutilized portion of the cable spectrum came out of Cable Television Laboratories (CableLabs), which includes members from the United States, Canada and Mexico. The organization developed the Data Over Cable System Interface Specification (DOCSIS, now known as the Certified Cable Modems project), which defines the interface requirements for cable modems involved in high-speed data distribution over cable television networks. The cable modems will be key CPE components to delivering voice over cable.

CableLabs has also been working on PacketCable to define requirements for call signaling, QoS, provisioning, billing event collection, interconnection with the PSTN, and security for the delivery of packet over cable. “Delivering IP over cable is still very new, but the DOCSIS infrastructure is tailored for IP data, but we still have to progress carefully,” Bakies says. The cable industry is standardized on DOCSIS, and the next step is to put this capability into use by running IP data (which can include voice) over the RF cable plant, he says.

Implementation and Billing

In the case of Videotron, IP signals are sent over the network from cable modems in homes to the cable modem termination system (CMTS), located at the head end. IP travels over the radio frequency on the cable plant and terminates on a hub at the head end, which is connected to metropolitan SONET rings. From this backbone, an edge router provides a connection to the PSTN.

When a customer picks up his telephone, the modem sends a "notify" message to Telcordia's call agent software. The software provides SS7 support, allowing connectivity with the PSTN’s service control points and support for a number of features such as 911 and 411 calling, local number portability, toll-free numbers, and operator services.

The software, also known as a softswitch, sends a message back to the cable modem to provide dial tone. The cable modem itself isn’t smart enough to recognize the event, and can't tell if other services, such as call waiting or three-way calling, have been initiated. It instead reports what it sees to the call agent, which interprets the signal and keeps track of what it all means. The call agent sends details about the call, such as duration, number of bytes and the kind of codecs used for Telcordia’s accounting gateway. The accounting gateway correlates and aggregates the call agent’s billing and usage CDR data and then converts it into AMA format. The AMA records are delivered on a batch basis to the billing system.

“Right now, all this is batch and not real-time,” Bakies says. “It may eventually go to real-time, but I haven’t seen a lot of pressure to change this. Being able to pull the CDRs out every half-hour or so seems to be fine.” Though formatted CDRs are going to billing in batch mode, they are generated in real time, he says.

Billing challenges become pronounced

Because Videotron offers long-distance service in addition to local calling, billing challenges become even more pronounced. In addition to using Telcordia OSS products to activate the service, track billable events, and generate CDRs, Videotron uses Kenan Systems’ Arbor/BP for the billing component.

“We’ve been working closely with Kenan for the last two or three years, and right now we’re using them for all billing,” says Francois Laflamme, vice president of IP Telephony at Videotron. “Our goal is to have one bill for all services; we’re pretty close to that right now.” Arbor/BP is being used to bill for long distance and all other variable service charges. Videotron also uses EHPT’s Billing Mediation Platform (BMP) to capture and process telephony usage data, which it then sends to the Kenan billing system.

With so many different services - high-speed data, cable television, and now telephony - running over the same coaxial pipe to the home, it becomes difficult to distinguish between services, and billing for them is a challenge, Laflamme admits. Because Kenan developed its billing system for voice services, and because the interface between the VoIP system and the billing system is similar to what one sees in the circuit-switched world, identifying voice traffic is not such a problem.

In Videotron's case, voice is billed based on AMA records, which include call duration and destination, while cable modem service is charged at a flat rate - with additional charges if users exceed their monthly data allowance.

Quality of Service can be a headache

Quality of service is vital when providers roll out new services over IP, an inherently unreliable protocol. Videotron’s goal is to be able to sell services with certain service level agreement parameters. The company uses several kinds of QoS to guarantee that voice packets don’t get delayed or dropped.

Between the cable modem in the home and the CMTS, upstream capacity is about 2 Mbps, Bakies says. As more homes are added in the same area, that capacity will becomes shared. “When you are dealing with 2 Mbps, you could potentially fill up two-thirds of that with voice alone, so you’ll need to get the calls into a tightly controlled QoS environment.”

This includes relying on the mechanisms in the DOCSIS standard, which provides constant bit rate channels on the cable radio frequency plant, Bakies says. “Once you pick up the phone and have that communication between the cable modem and the CMTS, the CMTS itself creates a constant bit rate channel for that call on the cable plant.”

Cable modems will also use the Diffserv standard to identify voice packets on the network backbone.

“For example, once voice packets go through the CMTS and hit the edge router on the metropolitan network, that router will give quality of service and use things like weighted fair queuing to prioritize voice during the transmission,” Bakies says. “As long as voice on the backbone is less than 30 percent to 40 percent of the total traffic, there will never be an issue. You simply make a decision on whether the flow is data or voice. But you do get into trouble when there are voice packets fighting each other.”

Videotron's pilot expanding

Videotron has been piloting its local and long-distance telephony service with about 200 users (for the most part employees) since July 1999. The company hopes to raise the pilot to include 2,000 people. “With the initial 200 users, we were debugging the technologies involved in delivering voice over the cable plant,” Bakies says. “Now, we are bringing operations systems online and making sure they are debugged. After this, we are ready to scale up.”

Once the 2,000 users are up and running, the company will shake out any oddities in the OSS. Videotron started sending bills in January and continues to work bugs out of the operation. Videotron wants to make phone service available to all its customers by spring. “At this stage, the focus is to deploy in a controlled fashion,” Laflamme says. “There is technology involved, but the back office processes also have to be tuned. We don’t want to rush into anything; we want to make sure all the processes and components are in place before we’re ready for primetime.”

In December, Videotron filed for CLEC status with the Canadian Radio-Television and Telecommunications Commission (the equivalent to the FCC), signifying that the company wants to be a major telephony contender. “We will be competing with Bell Canada [the area’s ILEC] on the residential market, and we do plan to be a primary line replacement,” Laflamme says.

So, what does Cisco do now?

Although Cisco's role in the Videotron deployment is continuing, new deployments will help shake out kinks in the system and provides a venue to demonstrate new capabilities. The company is also moving toward a real-time billing model, helping standardize usage data records and define how that information is collected and processed.

“One of the biggest challenges is to start spawning new services on next-generation billing platforms,” Dahm says. “Which services do you bill on what platform - that appears to be where we are today. If you move to a real-time billing solution, then how do you retrieve appropriate data, such as customer information, from a legacy billing platform and then feed it into the new system?”

Cisco has participated in IPDR initiative meetings and intends to take a more active role, according to Dahm. The company is also heavily promoting LDAP and DEN for usage-based information and billing.

Which system to own?

Many telecom providers wrestle with whether they should own an autonomous billing system containing all customer record information, or keep their legacy systems that already contain all the billing information. It is a question of investment, says Dahm.

“Legacy billing certainly isn’t going anywhere; it still serves a significant function,” he says. “I see billing systems that do packet playing a much more dominant role and superceding legacy systems. But legacy systems will still be used for traditional telephony even though a packet-based infrastructure will quite quickly assume control.”

Cisco Billing and OSS Partnerships

Like other companies, when Cisco wants to add to its expertise, it forms partnerships or invests in other companies. In the case of billing and OSS, although Cisco hasn’t bought any billing companies, it’s cozied up to a number of vendors.

Cisco announced an alliance with Telcordia Technologies in October 1998. Under the agreement, Cisco integrated Telcordia’s OSS products into its packet-based products. This should give service providers IP-enabled OSS systems that can conform to the new breed of IP services.

Cisco has also been getting friendly with mediation vendors such as Hewlett-Packard, Narus, and Xacct to develop new ways of collecting and aggregating usage-based data from a number of different devices.

In May of last year, the company ponied up $39 million for 3 million shares of Portal Software’s common stock, seen by many as a way of gaining ground in the billing arena. But Cisco’s relationship with Portal predates the influx of cash. In September 1998, the two companies announced that Portal’s Infranet IPT was being tested with Cisco’s AS5300 VoIP Gateway. The product is an H.323-compliant gateway that connects to the PSTN. In June, the two companies announced that the AS5300 and the Cisco AccessPath VS3/Voice Gateway were fully interoperable with Infranet.

Also in the IP billing space, Solect Technology announced in May that its IAF Horizon can provide authentication, authorization, and account for Cisco’s voice over IP products. Cisco has several agreements with Danish IP billing company Belle Systems, including building a VoIP network at the European conference used to show IP billing on Belle’s Internet Management System. And, like Portal, Belle also announced its compatibility with Cisco’s AS5300 Voice Gateway and AccessPath VS3/Voice Gateway.

Cisco has also worked closely with Kenan Systems and Saville Systems, Inc.