© 2004 AT&T, All Rights Reserved.

The world’s networking company SM

Voice over Internet Protocol:Policy Implications and Market

Realities

Phoenix Center 2004 Annual U.S. Telecoms Symposium AgendaDecember 16, 2004Dave Belanger, Chief Scientist & Vice President, Research, AT&T Labs

© 2004 AT&T, All Rights Reserved.

VoIP: A Data Application on an IP Network

Internet Protocol (IP) separates applications from the network:

• Voice is not longer restricted to telephone networks

• Voice becomes another IP data application

Satellite, Wireless, Cable, Phone, Electric Networks

WWWE-mail

DomainName Service

SIP..SMTPPOP3.. DNS.. HTTP

IP

TCP…UDP...RTP…

(InternetProtocol)

Packet Routed Data

Public Phone Network

IP/Internet Applications

Circuit Switched Voice

Voice

Ph

ysic

al Layer

Ph

ysic

al Layer

Ap

plicati

on

Layer

Ap

plicati

on

Layer

Log

ical Layer

Log

ical Layer

Enhanced/Information

Services

TraditionalTelecomServices

H.323..

Video

© 2004 AT&T, All Rights Reserved.

The Industry is Making Major Investment: To IP Networks Supporting Real-time Applications like VoIP

BX9000 BX9000

BX9000

Frame

Relay Network

Gobal IP

Network

ATM

Network

From:

Legacy Networks

To:

Common IP/MPLS Backbone

Frame/ATM/Voice/IP-VPN

MSE

MSE

The Internet

Route Servers

MPLS Core

Route Servers

4ESS

5ESS

5ESS

Voice

Network

Frame/ATM/Voice/IP-VPN

Private Line

Network

MPLS: MultiProtocol Label Switching

© 2004 AT&T, All Rights Reserved.

Investment in All Parts of the Network is Essential to Enable Real time IP Applications

$0

$10

$20

$30

$40

$50

$60

$70

Billions of Dollars of Equipment Expenditure

CORE Carrier andEnterprise Backbones(DW DM, Routers,Switches - optical, W AN,& converged)

ACCESS (CPE,Concentrators, DW DMMetro, Firewall, VPN,W ireless LAN, EthernetSwitches)

END POINT EnterpriseCPE (IP PBXs & phones)

Source: Based on data from Prudential Securities

Note: Software, network integration, consulting and product support expenditures are expected to match and eventually surpass total equipment expenditures per year.

Data/Communication Networks Worldwide Equipment Investment Estimate

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Rate arbitrage: TDM origination and termination

with IP transport in the WAN

Intra-company calls and faxes on converged network

Emergence of native IP origination environments

Separate Networks

Common, Global IP Network

Web-based call centers/web callback with IP Enablement

New network-based IP features and services

Converging Local, LD and data

IP enablement of call center features on a converged network

Network Convergence

Business Priorities Drive VoIP Adoption

© 2004 AT&T, All Rights Reserved.

VoIP: A “Killer” IP Application

WHAT THE FUTURE HOLDS:• Presence (Instant Messenger, Follow

me)• One Number / “Follow Me” Services• Click-to-Talk Interactive Call Centers• Universal Messaging• Virtual Meetings / Collaboration (like

NetMeeting)• Real time language translation• IP Centrex in a Box• Multi-Point Videoconferencing• Desktop Multimedia• Push to Talk Cellular• Voice Chat

An Information Service that Delivers Voice Communications and Enables Voice Convergence with Other Data

Applications and Devices

© 2004 AT&T, All Rights Reserved.

VoIP Technical Challenges

1. Network Characteristics

2. Quality of Service

3. Interoperability at the application level (SIP)

4. Security

5. Wireless

6. Global Standards

7. Power and Reliability

© 2004 AT&T, All Rights Reserved.

R Factor for VoIP

R=a-b1*delay-b2*(delay-b3)*H-c1-c2*log(1+c3*loss)

where

loss = packet loss percentage for the call

delay = one-way end-to-end delay in milliseconds

The terms "R-score" and "R-factor" are used to relate latency and loss to MOS scores for speech.

© 2004 AT&T, All Rights Reserved.

Ba

nd

wid

th

2 Way

Bufferability

1 Way

Tele-phony

Games

Inter-activeVideo

ThinClient

WebBrows-ing

Inst Msg

Email

B-castTV

(Video)File Transfers

Bandwidth Isn’t Everything

VoD

© 2004 AT&T, All Rights Reserved.

SIP Basics

• Session Initiation Protocol (SIP) is a protocol for allowing users to join a “session” for the purposes of exchanging media

• Session Initiation• Session Modification• Session Termination

• SIP definition is governed by the Internet Engineering Task Force (IETF)

• Core of SIP defined in RFC 3261 which supersedes RFC 2543• SIP is based on “IP Model”

• Transport and Application Signaling are separate• Intelligence and state resides in end device (the phone)

• SIP is an application signaling protocol• Can use either TCP or UDP as underlying transport protocol

• RTP is media protocol• Defines how the media itself (e.g. encoded voice or video) is transported• Uses UDP

• Very Important: Media path ≠ Signaling Path

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VoIP is Caught in the Middle

All we want to do is deliver

VoIP!

Telecom ServicesRegulation

Computer ApplicationNon-Regulation

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VoIP Challenges

Economic Challenges

• Intercarrier Compensation

• Universal Service Fund

• Taxes and fees

Technical Challenges

• Network Characteristics

• Quality of Service

• Interoperability at the application level (SIP)

• Security

• Wireless

• Global Standards

• Power and Reliability

Social Policy Challenges

• Numbering• 911• Law

Enforcement Access

• Accessibility for the disabled

• Consumer protection

• Privacy• Consumer

choice

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Example: Numbering

Numbering Resources (E.164 numbers): who can get them, and how can they be used

• Most users still want numbers, not SIP addresses!

• Potential barrier to market entry and innovation

• Location independence/nomadic considerations

• Geographic v. non-geographic ranges

• Scarcity concerns and strategies

• ENUM • IETF originally developed

ENUM as method for end users to provide mapping from E.164 numbers to Internet resources

Built on top of DNS Public ENUM is based on end-user opt-in;

customer controls Tier 2 name server and records

• With network transformation, carrier or infrastructure ENUM becomes more attractive

Supports IP interconnection Does not require end user opt-in or IP-

enabled end user Carrier controls Tier 2 name server and

records

© 2004 AT&T, All Rights Reserved.

FCCClassification

“CALEA”

Telecom Rewrite

Intercarrier

Comp

Numbering

USF

Proceedings:UK. Singapore,EU, Germany

Taxes and Fees

EmergencyServices (911)

Domestic/Int’l

JurisdictionConsumer Protection

End User Choice of VoIP

Provider

VoIP Policy Initiatives Continue to Pop Up

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