Content Billing Gains Critical Support

In a long awaited move, network manufacturers turn their attention to content-based billing.

Buying a movie ticket with a wireless phone may seem like a simple transaction to the user, but to the service provider, it is one unmanageable mess (see sidebar "So, How Many People Does It Take to Buy a Movie Ticket?"). The capability to provide such services exists, although no one can figure out how to bill for them-just yet.

"Our customers want to do this, but they are experiencing the issues with infrastructure," notes Reid Jenkins, product manager of convergent billing for Aptis. "How do you put it in place to generate a measurable, ratable transaction?"

In the meantime, companies continue to charge per kilobyte of data. "No one wants to commoditize this, but technologically it's quite daunting," observes Mike Allen of the OSS/Billing Group at Aberdeen Consulting. "The notion of settlement, and matching the host sale and retail sides, is a critical but scary part of next-gen billing and settlement."

There is no question new revenue models have to be implemented, as providers can't expect to profit from giving away content or subsidizing it with advertising.

"It's analogous to going to Wal-Mart, picking up numerous items, and having them placed on a scale, with you charged according to the weight," says James Morehead, group manager for Portal's Wireless Development Group. He believes today's flat-rate pricing seduces companies into being inefficient, rather than creative.

To deliver and charge for innovative tiered services-based on specific hosting resources used, as well as the priority assigned by hosting clients to specific content, applications or user categories-unprecedented levels of billing control are necessary.

The Marriage of Network and Billing

One of the more high-profile courtships has been that between Apogee Networks and Cisco Systems. Apogee has been working for the past few months with different manufacturers, such as Cisco, Nortel, CashFlow and TopLayer, to invent code for "content-aware" devices that will extract content needed for content-based billing. In December, Apogee demonstrated usage-based billing for content by integrating its code into a WAP gateway notes Andrew Burroughs, chief marketing officer at Apogee.

Cisco, conversely, has invested in a joint bundling agreement with Apogee.

"This is a big change, since billing traditionally has been passive to the network; the network terminates and originates services and applications, while the billing systems construct usable records," says Burroughs. With content, however, he believes billing must be intertwined with the network. "That is a major change for the industry."

Indeed, there are plans for content-sensitive software that links code in the networking hardware and the billing system, according to Aberdeen's Allen. "That will enable hardware to pick up headers and packets, and feed that back into the software system, as opposed to the traditional view where software would reside in the service provider's equipment and parse packets."

Important is the roll-out of content-aware routers from Cisco and Nortel. Such routers, also called simply content routers, guide a specific user's request for a specific piece of content to the site and system best able to respond to that request.

"When content exists in multiple places, the objective is to route the request to the location closest-in terms of network transit time-to the user, subject to the current load on that location," says Mike Normile, product manager for Cisco's Content Networking Business Unit.

Cisco currently offers two content routers:

Cisco CR 4450 provides content engine selection for large service providers' CDNs for multiple-origin Web sites with POPs and content engines distributed across thousands of locations. This router acquires routing and peering policies from the CDM 4670 and makes routing decisions based on the location of the user and POPs, as well as network status and other metrics.

Cisco CR 4400 provides content engine selection for small- to medium-sized CDNs with multiple-origin sites. It also offers transparent insertion into edge networks and Web-hosting environments. This enables companies to extend CDN services from the Web-hosting provider into edge ISP environments, as well as create CDN peering services within an ISP.

Normile notes that content routers differ from traditional packet routers, "although packet routers play an important role in content routing, such as providing network topology information to the content routers." Technologically, it is extremely daunting for a provider to accurately track packets as they go through various paths on a network, not to mention ensure that the packets arrive not only at the right time, but in the right sequence.

For its part, Cisco's Content Networking Business Unit is working closely with billing partners and enterprise and service provider customers to ensure that its products are scalable and provide the data needed to support new billing models. Cisco's content networking architecture includes product, technology and infrastructure areas, such as content distribution and management; content routing; content switching; content edge delivery; and intelligent network services.

While many of the billing and customer care companies complain they haven't been able to move forward because of a lack of interest from their customers, a dearth of standards, or lack of functionality from equipment manufacturers, a few have chosen to take control, aggressively pursuing a content-based future.

A Select Few

Lucent

"All of this complexity is real. This is very much a new territory for providers, billing and customer care providers," says Lucent's Steven Bernt, director of product management for billing and customer care software. "Consequently, there's not a lot of new models with billing for content and IP services."

Currently, Lucent's mobile team is putting together a working demo for billing for content.

"We were unable to get application vendors to give us information beyond how many kilobytes of info passed between the theater and the WAP phone, for instance," notes Jeff Rinscheid, industry marketing director for Lucent's mobile software products group.

Up until now, Rinscheid says, it was a struggle to get application vendors to understand the specificity required in billing for content. "They could tell us who the subscriber was, which content provider, and how much data passed from A to B. But beyond giving us the URL, they couldn't give us the level of detail we needed."

However, Lucent is working with two companies of some significance that may have the functionality to meet the criteria for billing for content. "We will be making announcements in the next month or so about partnerships with some of the content gateway providers," notes Bernt, who couldn't comment further at press time.

Under development is Lucent's real-time IP mediation InterpreNet product. "It enables you to look at packets and aggregate information for content assessment," Bernt says. He notes that the company is active in the IPDR and TeleManagement Forum's [TMF] Catalyst projects. Soon, Bernt expects there to be a Catalyst demo where end users will use a Web-based interface to order streaming video. "We will track the usage, work with the mediation system and billing system using the IPDR standard, and then bill and present that using a Web-based presentment system," says Bernt.

"The content work isn't our core business here, so we are developing interfaces and standards with the TMF and IPDR for billing for content with Web-based interfaces," he adds.

Portal

Portal recently stepped up its efforts in convergent wireless billing with the acquisition of German-based Solution 42. The system basically front-ends Portal's billing system with wireless voice management, CDR management and enrichment.

Currently Telenor Mobile, in Norway, is using Portal's InfraNet offering for content-based pricing models. "This enables subscribers to get real-time stock quotes or track flights and make reservations over their wireless devices," Morehead says, noting that the company already charges for just transport of the information and the content value.

"If you want an e-mail service on a pocket PC that supports text and attachments, you have to be able to mix and match in your pricing model. You may charge a flat rate, in the same fashion RIM [the Blackberry paging device manufacturer] does, for text e-mail, and charge a la carte for attachments, depending on the size, time of day, and so forth," says Morehead. "So now, with device in hand, as you click on an attachment, the device tells you, 'This will cost X amount of dollars; do you still want to download?' Then you answer. Then an e-mail server somewhere tells you the length of the file, and time of day, and whether you marked it urgent or not. A rating engine then devises a price built on the fly."

Daleen

Daleen Technologies, with its BillPlex product, also claims to have the capability today for content-based billing. "I think the assumption that a billing system cannot handle a large number of content-based products packaged all different ways is fundamentally wrong," says Frank Dickinson, senior vice president of product management. Daleen's product, he claims, handles this level of complexity and offers intricate rating plans for some of the products while still handling flat-fee billing for others.

He believes there is always a way to model for new services. "BillPlex is designed for building abstractions for types of charges. The idea that rates may fluctuate for something is no different than say, energy, where the cost may change by the minute, hour, or day. In this case, the billing product in the catalog may not be the specific content that is being delivered-just as you may not hold a specific cost per kilowatt hour- but rather a representation of the kind of information that can be delivered and the ways to bill for it." Dickinson says the exact content information and cost to the end customer is determined from rate information received-in Daleen's case, through separate usage records. "We can then correlate the specific usage of the end customer to the dynamic changes occurring for the products."

Now's the Time

"We see that there will be traction for content-based billing in two or three years; once consumers are hungry for these types of Internet applications, and the bandwidth is there with DSL and GPRS," says Jason Briggs, senior analyst in the Yankee Group's Billing and Payment Applications Strategies division. "But this is the time where the winners will get the mind share." In the meantime, vendors are implementing generic rating and billing platforms, with plug-in approaches, so they can launch services quickly and customize them once these types of 2.5 and 3G applications come to fruition.

In terms of functionality, there are certain criteria for tomorrow's billing systems that must be adhered to.

Openness

Because such capabilities go beyond traditional legacy voice systems, the infrastructure of most traditional vendors isn't suited for content-based scenarios. Open APIs will be a critical element for billing platforms.

"An open API within packaged software is critical so you can build the rating model," says Morehead. With voice, all you had was a big switch, a short message center and a voice mail. However, in 3G, you have content providers, mediation devices, WAP gateways, HTML servers, in-house content servers, e-mail servers, and hundreds of other systems not even thought of yet.

Scalability

Of course, unlike traditional flat-rate billing, next-generation billing systems will have to be able to scale up into the billions of transactions. The Content Alliance, formed by Cisco, has demonstrated that up to 20 billion transactions can be handled per day.

"Scalability is absolutely important, but even flat-rated events or transactions can be generated in high volumes," points out Scott Adler, DST Innovis. "If you look at traditional switched telephony and the high number of events/records generated, you get an idea of the volumes. It's important to understand that scale and performance create costs. Therefore, distinguishing between transactions that should be real-time versus those events which can (and should) be treated as batches can preserve the balance of costs and performance."

Mediation

Another key factor to keep down costs and maintain performance will be mediation.

"In terms of going down to IPDR or whatever the standard for call detail records is, it will be better for billing vendors to remain agnostic; let the mediation players go out and make the partnerships," advises Briggs. "You can partner with a Cisco or Nortel to understand their formats for CDRs, but in Tier 1 and some Tier 2 accounts, you deal with fragmented companies, with many messages going into billing systems, so mediation will be necessary."

Also, with billions of transactions per day on an IP network, "even the most scalable billing system in the world can't handle it. ... The workload must be reduced so that billing can deal with it," says Ori Cohen, founder and chairman of Narus, an IP mediation vendor. "Billing companies know billing, not networks. Their billing systems are based on databases, not real-time systems, so we process the information and apply business logic, in real time," Cohen explains. He says Narus plans to offer applications to service providers for intelligent billing (targeting DSL access companies and hosting companies), to help them look at data and understand different services. Pricing plans will be the next step, he adds.

Most would agree with Cohen that harvesting the network element information will really be a function of mediation systems. "The billing system needs to be able to receive records from mediation, which will reflect new services; hence operators can bill based on reserved bandwidth, quality of service and so on," notes Adler, who says DST has a flexible rating engine developed to handle a variety of inputs and apply billing rules, which capture the value of the transaction or event. "Providers need the intelligence to know which products, content providers and users make them profitable."

To maintain a product catalog on the billing system will create clutter, notes ADC's senior program manager Geoff Coleman, "We are continually working at opening up our billing system through a comprehensive set of APIs," he notes. ADC also strongly supports the TMF's Catalyst architecture teams to develop plug-and-play and shared data models. "If a provider wanted to deliver video on demand, rather than have to list each movie in the product catalogue of the billing system, risking clutter, you may only need to keep movie catagories [against which to bill]. In this case the mediation system [or content delivery system] would need to produce a detail record that had the movie title and the movie type so that it could be properly rated and billed [including showing the title on the invoice].

He believes that "if the IPDR sticks to its original principles, and gets buy-in from the hardware suppliers, then billing systems won't really need to know all of the titles of each video downloaded, for example, in a video on demand application. The billing system, for proper rating, just needs the type of video and customer information."

He notes it's the mediation system that will segment the videos, by new release or weekend special, for instance. Then it will be up to the mediation systems to pass on the event record, the type of video and title, so that they all show on the invoice.

Aptis' Jenkins agrees: "We're watching what happens with the IPDR, but until the mediation folks come up with a format, we can't do much on the billing side to guide and rate that record."

He explains that it's the mediation system that will need more informational data on the record. "It'll be up to the mediation companies to fight it out based on who has the best underlying technology."

Keeping Customers

In the meantime, providers have to work on providing value to customers.

"If you are charging for video on demand, you have to decide first if you can charge not only for the video, but for the actual download as well. Then you have to determine how you are going to reconcile for that event," says Jenkins. But, he warns, "You have to beware not to nickel-and-dime the customer to death."

Xacct's Network2Business platform offers a real-time link between network and business. "It provides a granular level of understanding of everything happening on your network," says Ted Hunting, marketing director for Xacct. TV Cabo in Portugal has used the solution to establish infrastructure for premium e-mail services and personal Web space.

Hunting believes that success will all come down to personalization, and that realizing economic potential will depend on companies' abilities to make real-time offers based on patterns of behavior. Knowing more about customers will augment providers' abilities to strike the balance between the profitability of next-generation services and making customers feel there is a real value in what they offer

Sidebar one: Bremmer, Should appear at the very beginning of the story

So, How Many People Does It Take to Buy a Movie Ticket?

To bill for a movie ticket purchased by a wireless transaction, you first have to account for the interrelationship of the content providers, the advertisers, the theaters, and the credit card companies. How much should the mark-up on the ticket be, so the right commission can be paid to the theater, and to the content providers that provided information on the seats and location?

Also, the WAP phone provider, which provided the "real estate," needs to be reimbursed. So does the advertiser that pushed the message to the subscriber in the first place. Unless it was an unsolicited message-can the provider determine whether it was spam?

Next, who was the subscriber that inquired about and bought the ticket? And what credit card company paid for it in the end?

Getting the information for that bill, and then getting the settlement back to the right people is the lynchpin. On the network side, several issues will arise:

How can a service provider or carrier guarantee a certain level of QoS?

Can they provision for it?

How can the billing system accurately parse the packet information so that it becomes technically efficient, even when millions of users are using IP content-based services across your network?

End sidebar

PULL quotes

"The notion of settlement, and matching the host sale and retail sides, is a critical but scary part of next-gen billing and settlement."

Aberdeen Consulting, Mike Allen

"All of this complexity is real. This is very much a new territory for providers, billing and customer care providers."

Steven Bernt, Lucent

"We see that there will be traction for content-based billing in two or three years; once consumers are hungry for these types of Internet applications, and the bandwidth is there with DSL and GPRS."

Jason Briggs, The Yankee Group