111700R1

NetworkSystemsDivision

TekelecPacket Telephony

Next Generation Networks:

Migration from Circuit to Packet – AnOverview

White Paper

Page 2 111700R1

IntroductionThe world’s telecommunications market is facing dramatic change. In the U. S. theTelecommunications Act of 1996 has served as a key catalyst. Furthermore, similarregulatory events are spreading this wave of change around the world. The net result isthat the telecommunications services market has become increasingly competitive. Thisnew level of competition, combined with the tremendous growth of the Internet and itsassociated technology has dramatically changed the incumbent service providers’ world.New competitive long distance and local service providers are challenging thesevenerable institutions.With these new competitors have come innovations in products, services, and pricing. Akey enabler of this innovation is the convergence of voice and data. Whether itscombining voice and data traffic in the carrier backbone or in the local loop, every carrieris evaluating the economies and flexibility of a converged solution.This paper provides a view of the telecommunication’s network migration that will occur,as new services are required in an ever demanding and changing marketplace.

Begin with the end in mind: Where are we going?

Key characteristics of Next Generation Networks (NGNs)The demands on the telecommunication’s networks today and in the future are reflectedclearly in the societal changes around the world. Customers of all services havehistorically wanted more for less, more flexibility, and sometimes just “more”! This cancertainly be seen in the rapid growth of mobile network usage. The mentality of anytime,anywhere is becoming prevalent around the world – the primary differences betweenregions being largely a matter of degree. Also, customers are seeing innovation across allareas of consumer goods and services with “just in time” services tailored to theirspecific needs and timeframes. These too will be key demands placed upon telecom-munications networks as they evolve.Key characteristics of NGNs are:

• Geographic transparency: boundaries are disappearing and economic benefitsindependent of service “density” must be realized

• Transport efficiencies: transport costs (price/bit) are continuously declining, NGNsmust share these efficiencies – for both bearer and signaling traffic

• Internet technology economics: leverage services and service delivery through theInternet, as well as the “silicon economics” of Internet hardware (servers, etc.)asmemory and processor price/performance improve

• “Old World” to “New World” interoperability: existing PSTN infrastructure, and itsassociated investment must be fully utilized

Global resources – global reachThe network of tomorrow will be the conduit to resources around the world. Regardlessof location, regardless of technology, the uniform availability of communications serviceswill be the fundamental differentiator between today’s and tomorrow’s networks.

Page 3 111700R1

This reality will be based upon standards based transport, signaling, services, and manymore aspects. Figure 1 below illustrates this from a high level.

Figure 1

Where are we today?In the long distance market, packet transport offers the “promise” of lower costs overtraditional time division multiplexing (TDM) transport. This has resulted in an arbitrage“play” by upstart carriers as they offer long distance voice for almost free. Packettechnology in the form of the Internet has also been created major disruptions (oropportunities, depending on your perspective).In the late 90’s ISPs began delivering data to both business and residences as demand forthe Internet rose. As data traffic grew, forecasts of data surpassing voice abounded.With the continuing explosion of data traffic, the idea of a common transport gainedmomentum.

Universal Services: Location independent access

ServiceService

ServiceService

ServiceService

ServiceService

ServiceService

ServiceService

Global Packet Telephony Network

“inter-service” connectionsservice access sessions

inter-party communications

Page 4 111700R1

In the local carrier market, Internet traffic is causing major concerns and driving re-engineering of local End Office switches. These switches were engineered for traditionalvoice calling patterns. In particular, characteristics such as frequency of calls and callhold times are markedly different with the added load from Internet dial traffic. In fact,the steady increase in Internet traffic threatens to exceed these switches capacity. Oneavenue of relief for this situation is the deployment of residential ADSL. The leadingtechnology in this market is an “always on” connection, but the traffic does not gothrough the local voice switch. Rather, the local Internet traffic is terminated in the localcentral office (CO) by a digital subscriber loop multiplexer or DSLAM. From theDSLAM the traffic is typically multiplexed into an ATM network and transported to anInternet Service Provider (ISP). Today, this ATM network is separate from the voicenetwork.Within the Internet infrastructure, as well as in the enterprise domain, Internet Protocol(IP) is the dominant transport. Given that both ATM and IP have strong supporters, thereis significant discussion and debate over what is the “best” approach, especially inreplacing legacy TDM networks. In fact, technologists from both carriers and vendors, aswell as industry “experts” are hotly debating over the choice of ATM versus IP as theprimary transport method.

NGN Migration

Key considerations in the evolutionAs carriers move towards solutions using new technologies and architectures, the successor failure of these solutions is dictated by many factors. In the case of the NGNs and“deconstructed” switch / packet network replacing the circuit switch / TDM network, it isimportant that these key benefits be delivered:

- Investment protection- Operational and capital costs savings- Carrier grade reliability- Improved service creation capabilities- Scalability- Improved product selection/choices

Investment ProtectionToday’s carriers today have billions of dollars invested in their existing networks. Itwould be fiscally irresponsible for their management to even consider installing acompletely new network, and discarding their network. In fact, it is critical that any newnetwork technology, whether it is “simply” a new network element (NE) or an entire“sub-network”, interoperate and leverage existing capabilities.With this in mind, incorporating NGN components based upon standard, open protocolsis the first step to protecting a carrier’s investment. Compatibility with SS7 and inter-machine trunk (IMT) requirements are fundamental tenants to supporting a smoothmigration to a NGN. This compatibility insures basic call setup and teardown, as well asaccess to existing Advanced Intelligent Network (AIN) services such as local numberportability (LNP), free call (ex. U.S. 8xx calls), etc. An example of how this could be

Page 5 111700R1

accomplished is shown in Appendix A. Additionally, from an operational perspective,interoperability with existing Operational Support Systems (OSS) is required before theNGN can actually be placed into service.Tekelec’s NGN components, the IP7 Secure Gateway, IP7 Front End, and VXi MediaGateway Controller family are comply with industry standards in signaling and transport,as well as supporting various management capabilities. Furthermore, Tekelec willcontinue to enhance and develop capabilities in this area to insure that its customersreceive the maximum return from existing infrastructure investment in transition to anNGN approach.

Operational and Capital SavingsThe primary driver behind NGNs is, predictably, economics. Whether the horizon is shortterm or long term the fundamental “raison d’être” is lower costs, higher revenues, orboth. In as much as most carriers currently own and maintain both voice and datanetworks, it is reasonable to project possible savings on the order of 50% when the twonetworks are combined. Purely from a acquisition cost perspective, the NGN equivalentof a circuit switch – softswitch/MGC and MGs, together can be less than one third thecost.Furthermore, given the distributed nature of NGNs, and the incremental growthcharacteristic, capital budget management and growth planning are both simpler. Ratherthan large purchases (i.e. major switch upgrades), incremental upgrades to mediagateways or additional media gateways occur.Since NGN solutions are premised upon open standards and are closely linked to Internettechnologies, significant cost savings will occur over the life of the network. Openstandards create choice and encourage competition -- a strong determinate of pricingtrends. With the leverage of Internet technologies, whether it be software (“web”technology, etc.) or hardware (server and mass storage technologies, etc.) there will bedramatic cost and innovation benefits realized – similar to those found in the datanetworking market with routers, switches, and PCs.

Carrier Grade ReliabilityMuch of the success of today’s telecommunications carriers revolves around the fact thatin most industrialized countries the telephones always work. Carrier grade standards foravailability are typified by “five nines” or 99.999% uptime.To achieve this high level of reliability, equipment manufacturers and their carriercustomers have developed products, architectures, and processes whose mission isfocused on maximizing network uptime.From a product perspective, reliability is typically increased by redundancy – redundantprocessors, links interfaces, hard disks, power supplies, etc. These components arerigorously tested by manufacturers who have implemented the most stringent qualitystandards, such as ISO 9000 and TL9000. System reliability is also addressed byimplementing “mated pairs”, i.e. redundant systems often operating in synchronization.

Page 6 111700R1

Architecturally speaking, redundancy is again the often the approach of choice. Systemreliability is addressed by implementing “mated pairs”, i.e. redundant systems oftenoperating in synchronization but geographically separated with redundant, diverselyrouted links providing the interconnection. This continues to be the standard industrypractice and is part of Tekelec's network proposals.Tekelec has a celebrated reputation for providing carrier grade reliability in its products.The IP7 Secure Gateway platform has both calculated and field proven reliability of99.99999%. The VXi MGC is based on carrier grade computing platforms from SunMicrosystems – the Netra series. The VXi MGC system is configured with redundant(active/standby) processors, redundant Tone and Announcement Servers, and redundantinternal LANs with companion redundant hubs and routers.All of Tekelec’s solutions are carrier grade and meet such stringent requirements as theU.S. carrier NEBS certification. Tekelec will continue to work with its customers inmeeting or exceeding all of the necessary requirements.

ScalabilityHistorically, telecommunications networks have scaled rather poorly and often atsignificant cost to the carrier. Switches were either “over provisioned” to support growthor they were upgraded to include additional line and trunk cards, additional call capacity.If capacity was required remotely from the serving switch, “remotes” or digital loopcarriers were implemented. These solutions were usually expensive from both a capitaland operating perspective.In contrast, NGN architectures support incremental growth in ports (lines or trunks), incall capacity, and in extension to new remote locations. With its distributed nature –softswitch or media gateway controller, media gateways and signaling gateways allinterconnected via a packet transport – an NGN solution offers both incremental growthand the ability to leverage advances in technology without the “wholesale” changes thatare typical of traditional circuit switches.Tekelec’s products and network proposals offer industry-leading scalability. The IP7

Secure Gateway scales from 2 to 450 SS7 links, while the VXi MGC offers in-serviceupgrades from 250,000 BHCA (Busy Hour Call Attempts) to nearly 1million BHCA.The NGN scales in a straightforward fashion as described above: either by incrementallyadding capacity to existing media gateways, or by adding media gateways. EnhancedServices can be introduced or expanded using existing Network Elements (NEs), such asSCPs, or in the future by adding Feature/Application Servers, and Media Servers.

Improved Product SelectionHistorically, the telecommunications network has relied upon a few large suppliers. Thisfact along with the highly integrated, “big iron” nature of circuit switches has led tocarriers being overly reliant on these large suppliers. With long development cycles fornew features, and expensive upgrades to support these features, carriers often felt captiveto the vendors of their install base.

Page 7 111700R1

The NGNs distributed, standards-based approach is the key to freeing carriers from thistenuous situation. Ideally, products that are standards-based will interoperate and offercarriers the best choices in technology, scalability, and price. However, given the relativeimmaturity of the NGN market and their associated standards, the telecommunicationsindustry will face a period of standards “convergence” over the next few years.As stated here several times, Tekelec’s approach is founded on standards-basedimplementations. The VXi MGC supports Q.2931, MGCP, and SIP, and will evolve asthese protocols mature. This is affirmed by the extensive list of media gatewayssupported. Not relying on a single transport technology or single vendor, the VXi MGCsupports ATM and IP MGs supplied by leading manufacturers, such as Newbridge(Alcatel), Tellabs, and Cisco. In addition, support for integrated access devices fromWoodwind and Mariposa complement this broad offering.

A few words about Quality of ServiceThere are a few key requirements to consider when evolving or replacing an existingservice. Foremost is meeting or exceeding customer’s requirements. This is particularlytrue as it relates to telephone service. Though the level of quality varies by technologytype (e. g., wired versus wireless) and network implementation, customers will continueto expect steady improvement in both the actual voice quality and voice services. Thecompanion requirement to meeting customer expectations is meeting stockholderexpectations, i.e. the new approach must be financially sound.A key premise of NGNs for voice is the guaranteed level of service. Contrasting today’scircuit based networks with the most visible packet based network – the Internet – acritical difference exists. The Internet is based upon a message delivery “philosophy” of“best effort”. In other words, accurate and timely delivery is not guaranteed. On theother hand, while a circuit switched network may not always deliver a call due tocongestion, once a connection is made, the circuit is more often than not reliable.NGNs for voice implemented over packet networks, whether using ATM or IP, dependon timely delivery of the voice packets (one way latency, round-trip delay, echo delay,etc.). There are industry wide discussions on how this is best accomplished. For ATMnetworks, there are clearly defined approaches to insure both quality and timeliness.However, for IP networks there is significant debate on various schemes, such as MPLS,diffserv, etc., and there is no clear choice in evidence today. A standards-based approachis even farther away.Tekelec’s IP7 Secure Gateway and VXi MGC interface to packet networks; however,they assume that these networks provide the necessary quality of service. The mediagateways supported by Tekelec are an integral edge component of these packet networks,and as such interoperate with the core transport to deliver the desired level of reliabilityand performance. Tekelec will work with its customers and MG partners to assist increating an NGN network that meets both today’s and tomorrow’s customer expectations.

Page 8 111700R1

Migration architectures

Voice Trunking: Tandem ReplacementThe first step supported both by the technology available and industry consensus is themigration of the voice trunking network from TDM transport to packet transport (ATMor IP). This is demonstrated in the following two illustrations, Figure 2 and Figure 3:

Figure 2

Figure 3

SCNSCN

SCN

EndOffice

EndOffice

EndOffice

STP

SCNEndOffice

STP

AccessTandem

AccessTandem

AccessTandem

TDMTDM

TDM

TDM

TDM

STP

STP

STP

SS7

TraditionalTDM Architecture

Packet Transport(ATM/IP)

IP7SG

SCNEnd

Office

SCN

SCN

SCNEndOffice

VXiMGC

MediaGateway

MediaGateway

MediaGateway

MediaGateway

EndOffice

EndOffice

SS7 SS7

TALI/SCTP

TDM

TDM

TDM

STP STP

MGCPUNI 4.0

Voice Trunkingwith

Packet Transport

Page 9 111700R1

Effectively, TDM trunks from End Offices, which typically connect directly to a Tandemor Transit switch network, now use a distributed transport and switching network,comprised of a packet transport and a softswitch / media gateway controller for callcontrol.Examining the architecture, the three key components and their roles are:

• Media Gateways: TDM to Packet translation for the bearer channel, andingress/egress to the packet network. These MGs are of the trunking gatewayvariety, meaning they terminate TDM trunks.

• Signaling Gateway: Conversion of SS7 signaling from TDM to packet, andmanagement of SS7/ISUP country variants. Packetized SS7 information isforwarded to the MGC via standard interfaces. Today, this includes TALI, and inthe future SCTP, pending its ratification.

• Media Gateway Controller: Call control, as well as including trunk management,screening, number translations, and correct trunk routing. The MGC controls theMGs via standards such as Q.2931 for ATM MGs and MGCP for IP MGs.

Note: Tekelec will offer standard based interfaces where available. In cases wherecustomer’s require capabilities not yet standardized, Tekelec will either develop andpromote an open standard (e.g. TALI), or will use the latest DRAFT of a potential standard.

While leveraging packet transport economies, this voice trunking approach also allowsuse of existing services provided by SCPs, Service Nodes, etc.

Voice over IP: End Office ReplacementThe transition to End Office support is based on the addition of two devices:

• Media Gateways (MG): These are of the access gateway variety and perform thefunctions common to the trunking gateways of TDM to packet translations.However, these devices continue terminate analog local loops to supporttraditional telephone handsets. Variations, based on the nature of the local loopand the intelligence of the customer telephone device are discussed below.

• Application/Feature Server (AS/FS): This is a shared resource associated withthe packet transport, but one that interoperates with the MGC or softswitch. Theinterface will typically be a SIP interface, but the AS/FS will also support theimplementation of the next level of call control features, such as call waiting, callforward no answer, caller ID, etc.

Page 10 111700R1

The Voice over IP architecture is shown below in Figure 4:

IP7 SG

SCN EndOffice

SCN

SCN

SCNEndOffice

VXiMGC

MediaGateway

MediaGateway

MediaGateway

MediaGateway

EndOffice

EndOffice

SS7 SS7

TALI/SCTP

TDM

TDM

TDM

STPSTP

MGCP/UNI 4.0

Voice Trunkingand End Office Support with

Packet Transport

SIPApplication

Server

AccessGateway

AccessGateway

Packet Transport(ATM/IP)

Figure 4

The current state of the industry for End Office support can best be characterized asexperimental. While there are actual implementations of PC to PC and PC to phone,there are no carrier grade installations of true “black phone” to “black phone” with therequisite services supported. Historically, the PC to PC approach has been based onH.323, with the abundant availability of Microsoft’s NetMeeting application.There is also significant development underway to implement SIP and SIP phones as the“next generation” of customer telecommunications devices. This model is based on theassumption that the end user device is significantly more intelligent than today’stelephone handset. Due to the huge number of installed telephones, the migration to“intelligent” phones, ex. SIP phones, the requirement for continued support of “blackphones” will remain for many years.Another emerging technology well suited to the softswitch/End Office approach is voiceover DSL (VoDSL). In a VoDSL application the VoDSL gateway can support either atraditional TDM interface (GR-303) to a standard End Office switch, or it can support asuitable “packet” oriented interface such as Media Gateway Control Protocol (MGCP).With the advent of voice and data integrated access devices leveraging the bandwidthavailable from digital subscriber loop technology, another viable component, used as amedia gateway, becomes available.With this in mind, it is critical that any NGN implementation provide the flexibility tosupport whatever access technology is predominant. Tekelec is basing its development,recommended architectures, and focus on standards. This will allow a straightforwardmigration to various access technologies as they implement standard interfaces such asMGCP and SIP. Tekelec is actively working with customer’s today to move towardsviable, deployable capabilities for End Office applications.

Page 11 111700R1

Converged Services: PSTN/Internet InterworkingAnother step in NGN migration is the incorporation of the Internet into the overalltelecommunications architecture. One of the early applications involving softswitcheshas been the offloading of traffic destined for the Internet from the circuit switchednetwork. This application, from an access perspective could be viewed as the initialcapability of the converged services aspect of NGNs.In reality, this capability serves primarily to minimize a carrier’s internal problem (i.e.,Internet traffic causing congestion in switches designed for voice traffic with 3-minutehold times), but does not offer any new capabilities to customers. New services arepossible, however, with a converged services network. Primarily, the new services willinvolve logically coupling Internet sessions with the voice capability of the PSTN.Examples include:

• Internet Call Waiting – allowing an incoming call alert to be displayed on aPC window while maintaining an Internet connection. Various optionsregarding call acceptance are possible.

• Click to talk – the ability to initiate a voice call while visiting a web sitesupporting a voice dialog for ordering, customer service, etc.

• Unified Messaging – providing true integration of various messages into asingle multimedia “mailbox” and offering translations between the media(voice to text, text to voice, etc.)

• Find me, follow me – expansion of existing services to include recognition ofa user’s online presence as a contact reference / location.

• Click to fax – an ability similar to click to talk, but one that creates and sendsa fax, typically based upon the “sending” web site content to a user suppliednumber from an Internet session.

• Content to Audio – retrieval of Internet based content in an audio format to auser-selected device.

The converged services approach would most likely be an incremental migration from theprevious VoIP solution to include additional devices such as:

• Mediation media gateway – “access point” to Internet transport services withappropriate firewall capabilities

• Media servers – devices capable of offering retrieval and translation ofcontent to differing media.

In addition, there will be linkages between Internet, SCN, and VoP to support thecapabilities listed above as well as other services. This high level architecture is shownin Figure 5 below:

Page 12 111700R1

Converged NGN/Internet

IP7SG

SCN

SCN

SCNEndOffice

VXiMGC

MediaGateway

MediaGateway

MediaGateway

EndOffice

EndOffice

SS7 SS7

TALI/SCTP

TDM

TDM

STPSTP

MGCP/UNI 4.0

SIPApplication

Server

AccessGateway

AccessGatewayMediation

Gateway

Internet

MediaServer

MGCP,SIP

Pager

PDA

Web PC

SIPPhone

Packet Transport(ATM/IP)

Figure 5

Services today and in the futureA key issue in the migration from today’s PSTN to any NGN is the creation of newservices, while maintaining existing services. This service compatibility requires well-defined interface points and clear protocols between the two environments (PSTN andNGN). For this reason, NGNs which implement some form of signaling gateways andSS7 interconnects, along with “higher-up-the-stack” capabilities such as TCAP and AINfeatures, form the initial services platform. Once this capability is insured thenimplementation of additional services databases and the requisite interoperability rulesand protocols can be defined.

Page 13 111700R1

The vision of the NGN is that these services can reside anywhere and be accessed byanyone. (Authorization is assumed). In fact, a new market opportunity for offering servicesis likely to develop form today’s nascent application service provider (ASP) space.

ConclusionThe future of NGNs is from one perspective assured: the traditional TDM network willbe replaced, from another perspective nothing is sure, but what exactly will an NGN looklike? When will NGNs be implemented? And, what will be the key services of thefuture?These and other questions will be answered in the coming months and years. For now, itis critical that equipment suppliers and carriers alike understand the dynamics of thechanging telecommunications landscape. Deregulation has opened up this market foraggressive and agile entrants who do not have the burdensome capital investment intraditional networking equipment. These new entrants - CLECS and ICPs, aredramatically affecting the market for both the every day subscriber and the incumbentcarriers. “Internet-time” has reached the carrier market. Whether the architecture of the“new world” replaces the “old world” in next five years or ten years, change is certainlyhere.

Appendices

Page 14 111700R1

Appendix A

Source: IN Forum, IN-IP Workgroup Figure 6

PSTN to IP to PSTN Message Flow Diagram with LNP QueryPSTN to IP to PSTN Message Flow Diagram with LNP Query

LNP Message Flow Network Configuration

LEC ALEC A

ISUP/TCAP/SS7 ISUP/TCAP/SS7

ISUP/SS7

ISUP/SS7

2,23,28

8

13,17,24

LEC CLEC C

LEC BLEC B

MG Controller[MGC]

SSP

SIP+

6,14,19,26,293,22,27

ISUP/TCAP/IP

MG Controller[MGC] ISUP/TCAP/IP

7,9,12,18,25

MediaGateway

[MG]

[MG]

[MG]

MGCP10,11

11 - (RTP connection)

4,5,15,16,20,21

MGCP

FGDTrunks

FGDTrunks

FGDTrunks

SCPSCP

RTP

MGCP

SIP+ISUP/TCAP/IP

IPNetwork

IP IXC IP IXCSignalingGateway

[SG]

SignalingGateway

[SG]

SSP

SSP

1

Page 15 111700R1

Figure 7 – LNP Message Flow Diagram Call Scenario BSource: IN Forum, IN-IP Workgroup

LEC A LEC BSTP STPOriginationSignalingGateway

TerminatingSignalingGateway

OriginationMedia Gateway

Controller

OriginationMedia

Gateway

TerminatingMedia

GatewaySCP

OFF-HOOK

TerminatingMedia Gateway

ControllerLEC C

ACK

PPSSTTNN ((ccaallll oorriiggiinnaattiioonn)) ttoo VVooIIPP ttoo PPSSTTNN ((ccaallll ddeessttiinnaattiioonn)) wwiitthh aann LLNNPP QQuueerryy

IAM

IAMISUP/IP - IAM

CRCX

ACM

ISUP/IP (ACM)

ACK

INVITE

TCAP (LNP)

TCAP (LNP)

TCAP (LNP-Response)

TCAPTCAP/IP (LNP-Response)

TCAP/IP (LNP)

MDCX

CRCXACK

ISUP/IP - IAM

IAM

IAM100 TRYING

ACKACM

ISUP/IP (ACM)

180 RINGING

ACMACM

ANM

ANM

ISUP/IP (ANM)

200 OK

OFF HOOK

ISUP/IP (ANM)ANM

ANM

MDCX

ACK

10

1

2

3

4

5

6

7

8

9

1211

13

1415

18

17

16

19202122

23

24

252627

28

29

16

LNP Service Delivery - Message Flow DescriptionThe message numbers contained in this message flow description correspond to thenumbering in the LNP Message Flow Diagram, refer to Figure 7. The messagenumbers also correspond to the LNP Network Diagram, refer to Figure 6.Note: This Call Scenario does not contain the call tear-down messaging at this time.

1. Caller goes off hook.2. LEC A sends SS7 IAM to the originating SG (OSG).3. The OSG receives and encapsulates the IAM in an IP packet (SIGTRAN), and sends it

to the originating MGC (OMGC). ( The SG is shown as a separate physical elementand uses the open interface being developed by IETF/SIGTRAN *** The SG may beintegrated with the MGC, MG, or an integrated MGC/MG *** )

4. The originating MGC (OMGC) (Media Gateway Controller) parses the IPencapsulated IAM, and sends a CRCX (create connection - MGCP) command to theoriginating MG (OMG).

5. The originating MG (OMG) returns an ACK acknowledgement containing theoriginating MG (OMG) RTP port address to be used for the call.

6. The originating MGC (OMGC) determines where the call is destined and sends anINVITE command to the destination Media Gateway Controller (DMGC) with theencoded IAM.

7. Destination Media Gateway Controller (DMGC) receives the INVITE and parses theIAM portion and determines the NPA-NXX resides in a ported MSA. The destinationMedia Gateway Controller (DMGC) launches a TCAP/IP (IP encapsulated TCAP -SIGTRAN) LNP query to the destination Signaling Gateway (DSG).

8. The DSG removes the IP encapsulation and sends an SS7 LNP TCAP query to theLNP SCP. The LNP database may return the Location Routing Number (LRN) or theoriginal dialed digits. In this instance, the called party has changed from Carrier B toCarrier C, thus an LRN for Carrier C is returned in the LNP TCAP response.

9. The DSG encapsulates the LNP response in an IP packet and sends it to thedestination Media Gateway Controller (DMGC).

10. The destination Media Gateway Controller (DMGC) determines the destination MG(DMG) based on the LRN and sends a CRCX (create connection - MGCP) commandto the destination MG connected to Carrier C.

11. The destination MG (DMG) establishes an RTP connection with the originating MG(OMG), and sends an ACK (connection acknowledge) to the destination MediaGateway Controller (DMGC) containing the destination MG RTP port informationused for the IP connection.

12. The destination Media Gateway Controller (DMGC) updates the IAM based on theLNP query response, encapsulates it in an IP packet, and forwards it to the DSG.

13. The destination SG receives the encapsulated IAM, formats an SS7/IAM message andforwards it to Carrier C.

14. The destination Media Gateway Controller (DMGC) sends 100 TRYING to theoriginating MGC (OMGC). The 100 TRYING message contains the destination MGRTP port information to be used for the call.

Page 17 111700R1

15. The originating MGC (OMGC) sends an MDCX (modify connection) command tothe originating MG (OMG).

16. The originating MG (OMG) establishes an RTP connection to the destination MG andsends an ACK (connection acknowledge) to the originating MGC (OMGC).

17. LEC C returns an ACM to the SG.18. The originating Signaling Gateway (OSG) encapsulates the ACM and sends it to the

destination Media Gateway Controller (DMGC).19. Destination Media Gateway Controller (DMGC) sends 180 RINGING message to the

originating MGC (OMGC) containing the encoded ACM.20. The originating MGC (OMGC) sends a MDCX (modify connection - voice cut

through) to the originating MG (OMG).21. The originating MG (OMG) sends an ACK (connection acknowledge) to the

originating MGC (OMGC).22. The originating MGC (OMGC) forwards the updated ACM to the OSG.23. The originating SG removes the encapsulation and forwards the ACM to Carrier A.24. The Called Party answers the phone. Carrier C sends an ANM to the destination SG.25. The destination SG encapsulates the ANM (SIGTRAN), and sends it to the

destination Media Gateway Controller (DMGC).26. Destination Media Gateway Controller (DMGC) sends 200 OK command to the

originating MGC (OMGC) containing the encoded ANM.27. Originating MGC (OMGC) receives 200 OK command, extracts, updates,

encapsulates and forwards the ANM to the OSG.28. The origination SG strips off the IP encapsulation and forwards the ANM to Carrier

A.29. The originating MGC (OMGC) acknowledges the 200 OK by sending an ACK

message to the destination MGC.

************** Call Setup Complete*************Source: IN Forum, IN-IP Workgroup

Page 18 111700R1

Appendix B

Techno-economic discussion for Next Generation Networks (NGN).

Today’s circuit switched architecture(s) have evolved over the last 100 years; however,this evolution compared to the rapid evolution seen in the PC and Internet worlds hasoccurred at a snail’s pace. The lifecycle of equipment in the traditional telecom-munications marketplace is measured in decades. Contrasting that with “Moore’s Law” inthe PC market place and “Internet time” in the Internet communications space illustrate akey motivator for NGNs.

There are at least four key techno-economic drivers for NGNs:• Costs (capital and operational)• Price/performance• Standards• Speed of innovation and introduction of services

With the dramatic hardware technology changes in the PC world (“obsolescence,”typically in 18 months) and the rapid innovation within the Internet, both hardware andsoftware products are on dramatically different price/performance curves from traditionaltelecommunications equipment. Industry analysts often quote IP network capital costs tobe as little as 50% of comparable switched network costs. Furthermore, the operationalcosts of combining (i.e. converging) the traditional disparate voice and data networksostensibly could be in the 50% range as well.These cost advantages are key drivers for NGNs; however they are not the only drivers.Historically, the traditional telecommunications networks depended on a select group ofvendors offering closed, proprietary solutions. These seldom interworked, except at clearlines of demarcation in standard interfaces. This market structure favored vendors andallowed significant control of product evolution by these same vendors. Today’s PC andInternet markets are based on “consumer” market quantities (eg. millions and millions)and rapidly evolving standards – but standards nonetheless. Since the NGNs leveragesignificant aspects of these two areas, the volume (that drive prices down) and thestandards (that promote interoperability) form yet two more techno-economic reasons forNGN implementation.The fourth and perhaps the most unproven reason for migration to NGN implementationis the ability of these new networks to support rapid introduction of new and differentservices. Consistent with the characteristics of Internet applications, however, this“promise” has yet to be realized simply because NGN’s are still in their infancy. IfInternet technologies (ex. NG HTML, DNS, LDAP, etc.) are effectively used, rapid,innovative services may prove to be the most compelling reason for NGNs.Regardless of the level of NGN “integration” into today’s existing circuit switchednetworks, benefits will be realized. However, as the NGN technologies mature and aredeployed the more complete the move to NGNs, the more substantial will be the benefits.