Billing for Voice over DSL

The market for broadband has a huge potential. While DSL may not have quite the same penetration as cable today, the move toward adding more services onto the DSL pipe may see the technology poised for significant growth. A recent report by Insight Research finds that while only 11 percent of small and medium businesses have broadband connections to the Internet today, that number will grow to 30 percent by 2002.

RAISING DSL’S VOICE

One of the major additions to DSL, and one that some call the killer application, is voice services. While it may sound ironic that soon many DSL subscribers will get voice services over the same copper loop that supplies traditional telephone service, voice over DSL (VoDSL) will be much more than just a dial tone.

Because DSL creates a fatter pipe for transmitting both voice and data, providers can technically offer up to 16 voice channels plus data over one line. (For more on the billing challenges of multiple lines, see sidebar, “Multiple Dial Tones.”) This technology allows small businesses and residential subscribers to have multiple phone lines, fax lines and data through one connection.

To bring voice to DSL customers, providers have to upgrade hardware. First, they need to install integrated access devices (IADs) at the customer premises. IADs come in different port configurations and deliver the voice and data to the customer site. Each voice port on the IAD corresponds to one phone line.

The IAD takes both voice and data traffic from the customer, turns the traffic into packets, and sends it over the DSL pipe to the central office (CO). In most DSL installations, ATM is the transport technology of choice running over the last mile connection from CO to the customer. By using ATM, providers are able to deliver higher quality of service that is on par with the PSTN.

At the CO, the voice and data traffic hit a DSLAM—the multiplexer that takes the data traffic and sends it directly over the provider’s network, such as ATM or another wide-area network technology. The voice traffic is sent from the DSLAM to a voice over DSL gateway device, which also resides at the CO. The gateway’s job is to turn the packetized voice traffic into circuit-switched traffic and then send it to the Class 5 switch at the CO. From there, the voice traffic is handled as usual and sent over the PSTN.

BILLING ISSUES

VoDSL should be a boon to providers looking for value-added features, but major questions still remain about how this new service will be billed. Will it be treated like traditional long-distance service, which is mostly billed by usage, or will it be treated like DSL data traffic and billed at a flat rate?

The jury is still out on which billing method will become most popular, but even before serious rollouts take place, it is a subject on the minds of everyone involved. What is clear is that adding voice services to DSL will mean some changes to billing.

“How do you figure out what to charge for a phone call that goes over a data pipe, when all you’ve charged for before is an e-mail account?” asks Bart Manning, senior marketing development manager at Portal Software, which is working on billing for voice over DSL.

But even before various DSL services are actually billed, data must be collected from the appropriate network elements. Even at this stage, there’s no clear method on how that will be done.

One model will have call detail records (CDRs) for VoDSL collecting on the Class 5 switch, just as they do for traditional PSTN traffic. The CDRs would likely be in AMA format and sent to a billing system much as today.

“If the service delivery platform is the Class 5 switch, then there is a traditional interface between the switch and the billing platform,” says John Abbott, product manager at Daleen Technologies. Daleen’s BillPlex product is supporting VoDSL.

He adds that in some cases, because the transport from the CO to the customer site is ATM, after voice traffic reaches the DSLAM it could go to an ATM switch. The ATM switch could also collect CDRs, but Abbott points out that today an ATM switch cannot provide advanced signaling and other features common among Class 5 switches.

With VoDSL, a softswitch may be introduced to handle SS7 and other advanced features. The softswitch, like a Class 5 switch, would provide AMA records for the billing system. Abbott says he expects this to occur, because the point of installing new equipment and offering new services is to replace the traditional CO. “There are companies out there like Cisco that are going after replacing ILEC equipment, but it will take time and won’t happen overnight,” he says. “I can see new installations where the CLECs are looking at softswitches, and they may want to interface that with a back office that contains legacy billing systems. They don’t want to start generating new record formats.”

Abbott adds that router-based services may be collected in an IPDR type of format, but usage records for more traditional voice services will look similar, if not identical, to existing CDRs.

Many in the industry also point to the growing importance of the VoDSL gateway as the central point of collection for CDRs. As gateways evolve and include more and more features, it will make more sense for billing software to integrate there for VoDSL service rather than at the PSTN’s Class 5 switch, says Portal’s Manning. “We already integrate with IP telephony gateways, and in that world we handle the authentication of calls, instructions to gateways on when to terminate calls based on account balances, and we create CDRs based on direct integration to those gateways,” he says. “It would make sense to look at it the same with DSL and integrate with the gateway rather than the Class 5 switch.” Portal is currently developing relationships with VoDSL gateway vendors, and in the future the company expects to have interfaces for its customers.

Today most providers looking at VoDSL are trying to develop something that’s on a par with the PSTN, but eventually those providers will operate services unlike any offered in the PSTN world, says Kalyan Ramanathan, senior product manager for broadband at Portal. “If providers want to provide cross-discounting across DSL voice and data, they can’t get detailed information if they are only billing at the PSTN Class 5 switch,” he says. “They’ll want to bill for these services at the VoDSL level.”

Ramanathan adds that by integrating a billing system directly with the VoDSL gateway, services can be metered by usage. He also says that the PSTN provider will want to bill for services at the PSTN level, because VoDSL data eventually flows to the Class 5 switch. Whether CDRs for voice over DSL service are collected at the Class 5 switch or the gateway, they will all eventually make their way to the provider’s back-end infrastructure.

Because both voice and data will be offered over the same DSL pipe, CLECs will have to deal with two separate streams of data. In most cases the two streams will feed into an IP mediation device before going on to the billing system. Legacy billing systems may not be able to handle both AMA and IPDR-style CDRs, and they may not be able to correlate data streams from different services and apply them to a single customer record. To do that, CLECs will need a convergent architecture.

REAL-WORLD VoDSL

Rhythms NetConnections, which has spent the last couple of years building out a national broadband infrastructure and offers wholesale DSL services to CLECs, is one of several providers in the trial phase with VoDSL. The company conducted one trial in June 1999 with MCIWorldCom, and has a second trial underway with Intermedia Communications in Tampa, Fla.

Rhythms plans commercial rollout of VoDSL service this summer, says Michael Lanier, CIO of the company. The deployments will be conducted entirely through its CLEC partners, which include Intermedia.

The company expects that its CLEC partners will collect CDRs on Class 5 switches and send that information to Rhythms. “We’re not sure if it’ll be critical for us to bill on a usage basis, since we’re dealing with partners,” says Jim Jones, director of billing services at Rhythms. He adds that initially Rhythms and its partners will likely exchange aggregate totals.

Because DSL and ISP services have traditionally been billed on a flat rate, there will be a challenge to move to a usage-based model. When that happens, Jones says, the VoDSL gateway will play an increasingly important role as the collection point for usage data.

In terms of CDR format, Jones imagines they will vary, depending on the technology used at gateways and switches. For packet traffic, he expects something similar to IPDR, and AMA for traditional voice. “Most mediation platforms allow you to configure what the record format output looks like,” he says. “We will likely move more toward the packet side of it, and that’s what it’ll look like in the long term.”

Another broadband provider, Covad Communications, has also been working to deploy voice over DSL service to its partners. In April the company—along with VoDSL gateway vendor Jetstream Communications and CLEC ICG Communications—conducted a live demonstration of the technology at the DSLcon show. Covad is also working with GST Communications to develop voice over DSL, according to Tom Hecht, senior product manager of voice services at Covad. He expects a wide-scale rollout by many of the company’s partners during the second half of 2000.

Covad has been in the trial phase of voice over DSL for the past year. The company has more than 75 end users and more than 400 numbers provisioned through voice over DSL.

Hecht says that with VoDSL service, nothing really changes for the CLECs in terms of core competencies and responsibilities. “CLECs will continue to provide their voice services, and they’ll continue to bill the end user,” he says. “This is all taken care of in the standard fashion it is today with circuit-switched voice.”

He doesn’t foresee DSL significantly changing the existing billing model for voice, but he does think there may be a rebranding or dual branding of the service and associated bills.

Like Rhythms, Covad’s partners will initially collect CDRs on the Class 5 switch. Hecht adds that in the future, more of the collection will take place on gateways. He doesn’t anticipate a problem in correlating a customer’s voice usage with data usage. “It won’t be difficult for a CLEC like ICG to add DSL service to their voice model; adding voice or data isn’t that difficult,” he says. He does add that providers will need a convergent billing platform to be able to bill for both voice and data.

Hecht believes that billing for VoDSL will actually become more flat-rate than based on usage. “I don’t think the driver is that it’s easier to bill at a flat rate,” he says. “I think what you’re seeing is, the underlying economics and end user requirements are what are driving billing toward a flat rate.”

He envisions a scenario where ICPs offer flat-rate pricing for voice and data bundles that include a certain number of minutes per month. “The small business market is completely captive to the RBOCs today—and there is no evolution in packaging and pricing, since there is no competition,” he says. “As you see competition introduced into the small business segment, you’ll see a whole host of new pricing and packages, and it won’t be driven by what’s easier to bill for, but rather end user needs and requirements.”

One of the very few CLECs that’s already offering voice over DSL to customer is Hampton Roads, Va.-based Picus Communications. Picus provides voice and data service to cities on the East Coast. In April the company announced a VoDSL rollout that uses IADs and gateways from CopperCom.

The first phase of the deployment covers 41 cities in the areas of Hampton Roads and Richmond, Va., and Washington, D.C. The second phase, currently underway, is expanding the service to 104 COs. Picus is bundling voice over DSL services (both local and long distance) with high-speed data for a flat monthly fee of $60. This is basically the same amount Picus charged for Internet and phone service before VoDSL was rolled out.

FLAT RATE OR USAGE-BASED?

“A number of people are talking about flat-rate billing, which includes voice, but it will be interesting to see over time whether that model continues to be compelling,” says Portal’s Manning. “From our perspective in other markets, ultimately access is commoditized, and value emerges from the service provided across that access.” He adds that he’s not sure if flat rate will ultimately be sustainable.

Daleen’s Abbott says voice will be flat rate to start off with, especially if the CLEC is bypassing the IXC. “When you start putting together an IP network on the backbone, then you have the possibility of flat-rate long distance, which is the beauty of the Internet.” He adds that carriers are expanding their geographical footprint, so calls made from anywhere in that area would be part of the flat monthly rate. Calls made to areas outside that expanded footprint would go through the IXC and be billed like a traditional long-distance call.

Whether VoDSL is based on usage or a flat rate, service providers will still need to capture detailed usage information, and customers will still want to see that on their monthly bill.

VoDSL billing appears to be taking a cue from the wireless world, where many customers pay a flat monthly rate for a certain number of minutes. Even if users are not concerned with how far they are calling or what time of day it is, they still want an itemized statement for expense reports and other record-keeping needs.

CLECs that choose to offer voice over DSL at a flat rate may be setting themselves up for trouble if they don’t have a system to collect CDRs, rate them, and keep track of each and every call customers make. “You can provide a flat-rate plan with very little sophisticated integration and never count calls, never assign them to origination/termination points, and never assign them to billable accounts,” Manning says. “If you do that and don’t put into place any of the integration required to do metered rating, once you decide to start charging, you will have huge challenges.” In contrast, he says, if you put in an infrastructure up front, it will take little or no change to switch over.

Another interesting twist involves high-speed Internet over DSL. Today most providers offer the service for a flat monthly rate; however, Abbott says, if a customer decides to hold a videoconference, they might need higher bandwidth that would have to be to dynamically allocated. “You have to change service on the fly and send that usage information back to the billing system, and aggregate all records on one bill,” he says.

TAKING IT SLOW

Anytime a carrier or provider introduces a new service, issues on the back end need to be sorted out. This can be said for voice over DSL. While the technology and equipment exists to deliver the service today, many carriers are taking it slow.

Hardware equipment upgrades are necessary. Carriers have to install voice over DSL gateways at the CO and make IADs available. In some cases line-sharing issues have to be resolved. Obviously, it will be a lot cheaper for CLECs if they can put their DSL services over the same line the local ILEC uses, but in some areas line-sharing agreements have not been reached.

QoS is another issue dogging rollouts. “With any voice product, there is a higher grade of service associated with it than for data,” says Covad’s Hecht. “There is a natural conservatism with rolling out voice over any kind of network, and I think it’s a good sign that people are making sure everything is right before deploying it.”

Although less of a concern, another reason voice over DSL hasn’t been deployed very widely yet is that some CLECs may have to change the flavor of DSL they have been offering. “You need DSL with enough bandwidth to get some level of high-speed data and up to 16 voice channels,” says Daleen’s Abbott. “It means you might have to change out your infrastructure and put in DSLAMs that allow for voice channels.”

For the past couple of years, the emphasis in the DSL world has been to build out broadband networks and make the technology available to as many businesses and residences as possible. Now that DSL build-out has reached a critical mass, the attention has shifted to what services will be delivered over that pipe. VoDSL is just one of those services.

MULTIPLE DIAL TONES

Voice over DSL allows up to 16 voice lines plus high-speed data to traverse a single copper loop, which could be a potential billing and OSS nightmare. How will each line be tracked, and how will usage information for each individual line be collected accurately?

In many cases, a single small business could have its own DSL pipe and provision all 16 lines for its own use. However, DSL service may also be offered in buildings with much smaller businesses that only need a few voice lines. In such a situation, a provider could set up just three or four voice lines for one office, and several voice lines on the same loop for another unrelated business in the same building.

Because the voice lines are going over the same copper loop, the provider must somehow distinguish usage by the different customers.

“When you have multiple lines, from a billing perspective the question that follows is, what’s the relationship among the lines?” says Bart Manning, senior marketing development manager at Portal Software. “Are they all simply extensions on a given account, or are they 16 different accounts?” He adds that integrating the billing system directly to the voice over DSL gateway will help to determine who each line belongs to and identify an intracompany call. In a PBX environment, intracompany calls don’t go out to the PSTN, and that could be the case with voice over DSL as well.

“If you’re thinking of an internal call, then this call can go to the gateway and doesn’t really have to go to the PSTN network at all,” says Kalyan Ramanathan, senior product manager for broadband at Portal. “If billing is directly hooked up to the gateway, then you can look at this call and the CDRs associated with it, which you typically would not get if you integrate with the PSTN switch. The switch is completely unaware that the call is local to the 16 lines.”

John Abbott, product manager at Daleen Technologies, sees the situation with multiple voice lines as similar to a Centrex system. Rather than ordering separate lines from their telco, a Centrex system offers PBX features on a smaller scale.

“With Centrex, you can bill one number or one subscriber; it’s a hierarchy of numbers, with up to 16 numbers going to one chargeable line,” he says. “You need a billing system that can set up a subscriber hierarchy and link subscribers to a billable entity, which is why convergence becomes important—as does the ability to handle multiple lines charged to a single account, and being able to see that breakdown.”