The intelligent pipe and next-generation billing

Presented by Marc Price, VP of Technology, CTO Americas in the LTE North America 2011 conference

See also the earlier posts on Policy and Charging here and here.

Billing based on QoS and QoE

With Spectrum coming at a price the operators are keen to make as much money as possible out of the data packages being provided to the consumers. The operators want to stop users using over the top (OTT) services like Skype thereby losing potential revenue. They also want the users to stop using services that are offered by the operator thereby maximising their revenue.

A valid argument put forward by the operators is that 90% of the bandwidth is used by just 10% of the users. This gives them the reason to look at the packets and restrict the rogue users.

As a result they are now turning to deep packet inspection (DPI) to make sure that the users are not using the services they are being restricted to use. AllOt is one such company offering this service.

The following presentation is from the LTE World Summit:

They also have some interesting Videos on the net that have been embedded below. They give a good idea on the services being offered to the operators.

Finally, a term QoS and QoE always causes confusion. Here is a simple explanation via Dan Warren on twitter:

QoS = call gets established and I can hear what is being said, everything else is QoE

QoS Control based on Subscriber Spending Limits (QOS_SSL)

Quality of Service (QoS) is very important in LTE/LTE-A and the operators are taking extra efforts to maintain the QoS in the next generation of networks. They are resorting in some cases to Deep packet Inspections (DPI) based controlling of packets and in some cases throttling of data for bandwidth hogs.

The following is from a recent 4G Americas report I blogged about here:

This work item aims to provide a mechanism to allow a mobile operator to have a much finer granularity of control of the subscriber’s usage of the network resources by linking the subscriber’s data session QoS with a spending limit. This gives the operator the ability to deny a subscriber access to particular services if the subscriber has reached his/her allocated spending limit within a certain time period. It would be useful if, in addition, the bandwidth of a subscriber’s data session could be modified when this spending level is reached. This could be done depending on, for example, the type of service being used by the subscriber, the subscriber’s spending limit and amount already spent and operator’s charging models. This allows the operator to have an additional means of shaping the subscriber’s traffic in order to avoid subscribers monopolizing the network resource at any given time. Since support for roaming scenarios is needed, the possibility to provide support for roaming subscribers without having dedicated support in the visited network is needed.

Upon triggers based on the operator’s charging models, the subscriber could be given the opportunity to purchase additional credit that increases the spending limit.

The objective of this study is to provide use cases/service requirements and specs that allow:

* Modification of QoS based on subscriber’s spending limits

* Enforcing of spending limits for roaming subscribers without having dedicated support in the visited network

For further details see: 3GPP TS 22.115 Service aspects; Charging and billing (Release 11)

Net Neutrality: Good or Bad?

I am not sure what the right answer to this question is? There will be winners and losers in either case.

FCC (Federal Communications Commission) chairman Julius Genachowski has just outlined his much-awaited plan for Internet neutrality. If the plan is approved it would drag the wireless operators in the US into the public regulatory arena occupied by their wired cousins who have recently had to account for their neutrality policies to the FCC.

The proposed policy outlined today by Genachowski will mean the FCC will get to poke and pry into mobile operators' business policies and rule on how well they conform to FCC guidelines on neutrality in the same way that wiredtelcos must. The FCC will also impose new and tighter neutrality behaviour on the big phone companies including Verizon and AT&T.

In detail: Genachowski has reaffirmed the long-standing (since 2005) broadband principles that will now be formalised by the FCC.

• That consumers are entitled to access the lawful Internet content of their choice.
• That they are also entitled to run applications and use services of their choice, subject to the needs of law enforcement.
• That they are entitled to connect their choice of legal devices that do not harm the network.
• And that they are entitled to competition among network providers, application and service providers, and content providers.

Genachowski has added two extra principles. Internet access providers can't discriminate against particular Internet content or applications: and they must ensure that Internet access providers are transparent about the network management practises they implement.

"The rule-making process will enable the commission to analyse fully the implications of the principles for mobile network architectures and practises, and how, as a practical matter, they can be fairly and appropriately implemented," Genachowski said today.

U.S. phone companies may be forced to open their wireless networks to rival Internet services like Skype and Google Voice under the proposal. The proposal, if adopted, would be a victory for consumer advocates and big Internet companies like Google Inc at the expense of telecom operators like AT&T Inc, Verizon Communications and Sprint Nextel Corp.

"The risk to the wireless carriers is that they won't be able to stop customers from using free voice and text services like Skype or Google voice," said Bernstein analyst Craig Moffett. "Voice and text are where they make all of their money."

The FCC has already been examining why Apple Inc rejected Google Voice for use on iPhone, sold by AT&T.

The new proposal could result in mobile customers cutting their phone bills by opting for minimum carrier voice plans and doing without text-messaging plans if they use mobile voice and text services from Skype and Google.

Piper Jaffray analyst Christopher Larsen downplayed the risk, saying that if they have to, operators would be sure to find a way to change their fees in order to maintain profits.
Advocates of Net neutrality have long argued that service providers must be barred from blocking or slowing Internet traffic based on the content being sent or downloaded.

But service providers say the increasing volume of bandwidth-hogging services -- such as video sharing -- puts pressure on them as it requires active network management, and some argue that Net neutrality could stifle innovation.

AT&T, the No. 2 U.S. mobile service, said it was concerned about an extension of Net neutrality rules to the competitive mobile industry.

The new regulations would limit consumer choices and "affect content providers, application developers, device manufacturers and network builders," said an executive at Verizon, which owns the No. 1 mobile service with Vodafone Group Plc.

Wireless trade group CTIA, whose members include AT&T, Verizon Wireless and Sprint Nextel, said it was concerned the proposal would have "unintended consequences." Leading Cable provider Comcast Corp said it was pleased Genachowski "recognized that networks need to be managed."

Exactly my thoughts (but with proper technical terms, language and analysis ;) by Gary Kim in IP Communications:

In the communications business, rationing is a fact of network life. Since virtually every part of a communications network uses shared resources, and in a market where users do not want to pay too much for access to those resources, rationing of network resources is necessary.

Shared finite resources always pose a usage problem. Known as the "tragedy of the commons," the economic problem is that multiple individuals, acting independently, solely and rationally when using a common resource can ultimately destroy the shared limited resource.

Some people argue that this problem cannot exist with the Internet, which is virtually infinitely expansible. But that misses the point. In looking at shared resources, the "commons" is the access network's resources, primarily. In other words, the "choke point" is the homeowner's garden hose, not the reservoir.

Some might argue that IP technology, optics, Moore's Law and competition upend the traditional "scarcity" value of access bandwidth. Certainly it helps. Currently, most consumers have access to two terrestrial broadband providers, two satellite networks, three, possibly four mobile networks. Then, there are broadband pipes where people work, at school and at many retail locations.

Still, there are some physical and capital investment limits, at least at retail prices consumers seem willing to pay. If consumers are willing to pay much more, they can get almost any arbitrarily-defined amount of access bandwidth. That, after all, is what businesses do.

If consumers resist paying business prices, network investment has to be shared more robustly than it otherwise might.

Given that all network resources are shared, resources are finite. To support retail prices that require such sharing, networks are designed in ways that "underprovision" resources ranging from radio ports to multiplexers to backhaul bandwidth. Based on experience, network designers engineer networks to work without blocking or degradation most of the time, but not necessarily always. Unusual events that place unexpected load on any part of the access network will cause blocking.

Blocking, in other words, is a network management technique. And that's the problem the Federal Communications Commission is going to have as it looks at additional "network freedoms" rules commonly known as "network neutrality." The term itself is imprecise and in fact already covered by the existing FCC rules. One might argue the issue is more the definitions and applications of existing rules that require clarification.

The ostensible purpose of the new rules is to prevent access provider blocking or slowing of any lawful applications, but a rule exists for that. Instead, it appears a primary effect of the rules will be to extend wired network rules to wired providers.

Beyond that, policymakers will have to contend with tragedy of the commons effects. If, in forbidding any traffic shaping (a network management technique) in the guise of "permitting the free flow of bits," rulemakers might set the stage for dramatic changes in industry packaging and prices of Internet access and other applications and services.

U.S. consumers prefer "flat rate billing" in large part because of its predictability of cost. But highly differentiated usage, in a scenario where networks cannot be technically managed by any traffic prioritization rules, will lead to some form of metered billing.

If metered billing is not instituted, and if service providers cannot shape traffic at peak hours to preserve network access for all users, then heavy users either have to pay more for their usage patterns, they will have to change their usage patterns, or they might experience some equivalent of "busy hour blocking."

Application providers and "public policy advocates" seem to be happy that new network neutrality rules might be adopted. They might not be so happy if ISPs lose the ability to deny or slow access to network resources. On the voice networks, some actual call blocking is allowed at times of peak usage. Forcing users to redial might be considered a form of traffic shaping, allowing access, but at the cost of additional time, or time-shifted connections.

To the extent that such blocking rules already are impermissible, some other network management techniques must be used. And one way to manage demand is to raise its price, either by increases in flat-rate package prices, by instituting usage-based billing or some other functionally-similar policy.

To avoid the tragedy of the commons problem, in other words, requires raising the end user's understanding of cost to use the shared resource.

Prioritized traffic handling, which assigns users a lower priority in the network once they have reached their fair use level, might be a preferable traffic management technique to slowing any single user's connection, once their individual usage caps have been reached.

When that is done, heavy users experience degradation in service only when competing for resources in a congested situation. For peer-to-peer users, the experienced reduction in throughput will be limited over time.

Only in heavily loaded cells or areas will a peer-to-peer user experience serious issues. Prioritized traffic handling enables operators to focus on dimensioning their networks for normal usage, while still permitting unlimited or "all you can eat" traffic.

Perhaps there are other ways of handling the "rationing," but on a shared network with network congestion, available to users paying a relatively modest amount of money, while a highly-differentiated load being placed on the network by a small number of users, some form of rationing is going to happen.

Perhaps flat rate packaging might still be possible if rationing affects end user credentials, rather than bits and applications or protocols. In other words, instead of "throttling" a user's bandwidth when a pre-set usage cap is exceeded, what is throttled is access to the network itself.

Dilbert humour on Mobile Rebates

Missed this one earlier but otherwise I am a big Dilbert fan. Thought it would be nice to end the week with.

By the way, last year I blogged about the Mobile Billing strategies which may be useful for you if you are considering getting new contract.

Free Sim, Free Calls forever and no Topup needed - Welcome to '3'

Free Skype-to-Skype calls and instant messaging, free Windows Live messenger and free voice mail in the UK. Welcome to a new contract called SIM Zero from '3' UK.

A minimum contract period of 30 days and the ability to make free Skype calls, all for the princely amount of £0 per month is not bad at all. For the occasional one off calls or texts, 3 will charge users 20p per minute regardless of the networks and the time of call while texts will cost users 10p each. Furthermore, each MB of data will be charged at 30p which is fairly reasonable.

If you are likely to make more than 45 minutes worth of calls per month AND you'd like to stick to 3, then they've got a £9 price plan that gives you 100 anytime, any network minutes or texts, or any mix of the two plus free 300 minutes of 3-to-3 calls and a free mobile phone.

Users will not be coerced into topping up their mobile account regularly; 3 recommends using either theh INQ1 or the Skypephone S2 which are both available for £70 for the contract. Nevertheless, you should be able to plug any 3G phone to get the service.

Via: IT Portal

£300/min: The cost of mobile broadband while roaming

Trying to keep his young son entertained in the evenings on a skiing holiday, Will Pierce decided to download a few episodes of their favourite TV shows.

He had assumed that he could use his £25 Vodafone data card - which gives him access to mobile broadband while overseas - without incurring any unexpected costs.

But when he returned from the five-day break in Meribel, he was sent a phone bill for nearly £21,716.

Mr Pierce and his son Louis, eight, had gone for a 'boys' holiday' with another father and his son, also eight.

The group rented an apartment, but it did not have any English-language TV channels. With the boys too young to spend evenings out in the resort, Mr Pierce was anxious to keep them entertained.

So over the course of the stay he downloaded several shows - mostly Top Gear for the boys and Kavanagh QC for the grown-ups - on to his laptop computer using the data card.

He was charged according to the number of megabytes used, meaning one show lasting less than 18 minutes cost him £5,132 - almost £300 a minute. Downloading the same size file in the UK would not have cost Mr Pierce anything under most broadband tariffs.

Mr Pierce did not deal directly with Vodafone, instead addressing his complaint to DRD Communication Services, the European network operator.

DRD agreed to waive its fees, bringing the bill down to £16,500, but Vodafone initially insisted that the usage was 'valid' and refused to back down.

However, a spokesman for Vodafone said yesterday that the company would waive the full amount.

She added: 'Such bills are exceptionally rare and we have an investigation under way.'

Beware of Mobile Billing Strategies...

Since most of the operators are now being forced in the corner due to competition, requiring to offer bigger and cheaper bundles of voice and data they are now fighting back with clever strategies. I have listed some strategies that has been my experience and of some of the people I know. Please feel free to add yours via the comments section.

1. Apparently, operators lose quite a lot of money when people call customer services. As one of my colleagues put it, operators profit for a month is wiped out when someone makes a call to their customer services and asks to speak to a representative. So this option of speaking to a representative is now buried three or four levels deep and you are offered an option of posting your query via the website and also you are asked to make sure you have seen the FAQ before doing this.
2. Some operators used to have 24/7 customer services for personal users which have now gone and has been replaced by 12/6.5 or 14/6 services.
3. The option to call free to customer services has in some cases been replaced by a flat fee of 10p or 25p to discourage the callers.
4. Once upon a time, people used to get bundles that allowed inclusive minutes to landlines and same network mobiles. That was changed to ‘any network any time’. Now the calls to the same network (which costs really nothing to the operators) are coming back in disguise. You get a bundle of free minutes ‘any network any time’ plus ‘extra’ N hundred minutes to people on the same network. This encourages closed group of people to move to the same network.
5. Another one is that if you have a contract phone for over six months then you can get another one for half the price as long as you have one contract on your name. What this does is that you have one for six months in an 18 months contract then you get another one which costs you half and that is for 18 months contract as well. After another 12 months, if you don’t renew the first contract then you have to pay full amount for the second contract which would defeat the purpose of getting half price contract. So you renew the first one and the cycle goes on and on.
6. The same as in above case but with Mobile broadband. Some operators offering you free or cheap mobile broadband are generally using you as guinea pig; check their review before buying into them.
7. Earlier the inclusive minutes on the bundle were billed by seconds. So if you had 500 minutes, it effectively meant 500 x 60 seconds. You could use them the way you want in any small amounts you want. The new bundles are in minutes (read the fine print ;) so they are effectively just 500 minutes. Even if you call someone for 5 seconds, you have spent 1 minute. Vodafone and ‘3’ in UK have also been forcing their existing contract customers who were on the old style bundles to move them into partial new style bundles. What they are saying is that for the first 60 seconds you will be billed for a minute but then after 60 seconds, they are billed by seconds. So to get the best out of your existing contract you will have to make sure that your call lasts for long time.
8. It used to be free to pickup voicemails by some operators but that is no longer the case and you are billed for atleast 1 minute.
9. More and more bundles are coming with extra SMS’s which generally costs nothing to the operators.
10. Some new packages have extra video call minutes and MMS’s thrown in which makes it look great but how many people actually use them?
11. Every operator has now started abusing the term ‘unlimited’. Never trust anyone offering anything ‘unlimited’. They all have a fair usage policy stuck in the terms and conditions. For unlimited broadband the fair usage policy is around 1-5GB depending on the operator and for unlimited SMS’s the fair usage policy is generally upto 100 texts a day.
12. Always preserve your original ‘terms and conditions’ copy. The operator can suddenly change them on their website but for your contract the originals would be valid unless the operator sends you a specific mail informing about the change. Sometimes a sudden change in terms and conditions by operators will allow you to walk out of your contract free of any commitments.
13. Finally there is Femtocells strategy. I agree they haven’t really been launched but this is the strategy marketers been working on to sell them. Get a Femtocell and get cheap calls and SMS. When on Femtocell your bundle increases by 5 times. So if you spend 5 minutes calling someone when camped on Femtocell then you will only be charged for a minute. What more, upto 4 people can use a Femtocell at any time for calls or data services. If you get 2 mobiles on a 24 month contract then the Femtocell is free of charge.

Remember the operators hire very clever billing strategy consultants to keep ahead of the game so always doubt a deal which seems too good to be true. There is no such thing as free lunch :)

India to finally unrestrict VoIP

Even though India supplies the world with software and IT engineers, till now it was not possible for people living there to fully use VoIP facility. It was illegal to call any phone using the computer. This is about to change at the Telecom Regulatory Authority of India (TRAI) has proposed that people be allowed to make calls using internet to fixed lines. What does it mean for the people? Well, the price of domestic long distance calls is supposed to halve to less than a penny (just over a cent) and international calls are supposed to get cheaper by 20%. It would also become cheaper for people to call India from abroad. Already in UK, Vodafone is allowing people to call India from a Pay as you talk phone for just 5 p per min. This may also help the Indian call centres as right now, the onshore companies have to pay termination charges when the calls get routed to India. This would mean that Indian call centres may become cheaper and more competetive.

Now for the small print; only the ISP's will be permitted to compete with the telephone companies using this VoIP. The fixed line and the mobile operators are up in arms about this because the ISPs are going to get free money whereas the mobile operators had to pay license fees for entry into the market.

This may not be a big problem for the time being as at the moment India only has around 5 million broadband subscribers whereas there are 287 million mobile subscribers and around 40 million fixed line subscribers. Also, the call rates are so cheap that additional investment in a PC and broadband connection (which is comparatively expensive) may not be lucrative.

If the recommendations by TRAI are accepted, there will surely be a VoIP revolution in India. The existing fixed line and mobile operators will have to come up with some challenging billing models to survive in future.

NRS, ENUM and NGN

The way most of mobile savvy people work is that they have bundles of free minutes on their mobile which they use for calling people locally/nationally and then they have VoIP based clients like Skype they use for calling people on similar services locally/nationally/internationally. There is a constant juggle between Mobile numbers and VoIP numbers. What if we were able to use our number with VoIP client so regardless of whom you are calling, if they have a similar VoIP service on their side, you get free call and if they dont have this VoIP client then you use your inclusive minutes or get charged. ENUM will be able to solve this.

According to a Yankee Group report titled "ENUM Will Be Reinvented as a Strategic NGN Element", In spite of its early struggles, ENUM, short for Electronic Numbering or Telephone Number Mapping, is well positioned to provide a fundamental underpinning of the Anywhere Network™ as it relates to the efficient routing of any IP-based service across operator domains. It is in this new role that ENUM evolves from its rather meager beginnings to a strategic role in the transition to IP.

I wrote about ENUM sometime back as that was mentioned as magical entity in one of the conferences. Since then I have managed to find the Nominet presentation which was discussed in the conference. Infact there was a conference in London on ENUM organised by Nominet. If you are not clear about ENUM from my earlier Blog then please check Technology Inside Blog here.

We can discuss again here, why ENUM is important:

Imagine the NHS has 500 telephone numbers that it operates as 0800 freephone numbers to allow customer (patients) to contact various local departments. The cost of each minute of every call is borne by the NHS so ultimately by the British taxpayer. Now the NHS also has VoIP connectivity and decides to advertise their 0800 numbers through DNS using ENUM. Subsequently, every time someone using VoIP decides to call any of those 0800 numbers their VoIP provider will find the 0800 number in the ENUM DNS listings for the NHS and will connect the caller to the medical department using VoIP alone - at no cost to either party (usually).

Siemens have a very good presentation that shows different uses of ENUM.

Clearly with this approach there is scope for financial savings. That said, there remains considerable work needed to achieve even this small goal, let alone the potential options further down the road.

In case you were wondering, ENUM is an international standard being implemented by individual countries separately through their respective Governments. The UK Government, through regulator OFCOM, has assigned the design, implementation and ongoing administration of the project to UKEC who, in turn, have contracted much of the work to Nominet. Nominet administer and maintain the .uk gTLD - when you buy any domain ending .uk it is ultimately sold by Nominet although almost always through a reseller (”registrar”) like GoDaddy.

GSMA and NeuStar have been working with leading operators to provide a standards-based solution to this problem. This solution is the Number Resolution Service, or NRS.

NRS is a GSMA Managed Service operated by NeuStar. The service facilitates IP interoperability by translating telephone numbers to IP-based addresses. Interoperability is particularly important in facilitating the uptake of emerging services such as MMS, IMS and Packet Voice.

Based on Carrier ENUM, NRS is available to mobile operators, fixed network operators, and related service providers. The service is currently being piloted with a number of operators, with commercial availability scheduled for the autumn of 2008.

As next generation IP-based services proliferate, operators can utilise NRS to position new services behind the telephone number already used by subscribers. Whenever a telephone number is used to identify an end user, the NRS service will facilitate the discovery of URI containing information specific to the service being provided.

NRS is provided as an off the shelf managed service, interoperable on a global basis, providing all the facilities and features necessary to implement an operator’s interconnect policies. Pricing is based on a cost effective “pay as you go” model with no up front capital investment required. NRS thus helps lower the entry barrier for new services and promotes innovation by simplifying the product development and implementation process.

ENUM is going to be hated by the CPs because it will lower their per minute revenue which they are getting at the moment but they it is definitely going to provide new opportunities (and competetion). At the same time the customers will love it because they will get loads of free calls and dont have to worry too much about installing different VoIP clients on their phones. At present it is still in the initial stages with everyone waiting for others to adopt it first but ENUM is here to stay.

Abbreviations:

• ENUM - tElephone NUmber Mapping (I have also seen Electronic NUMbering)
• CP - Communications Provider
• SBC - Session Border Controller
• NHS - National Health Service (in UK)
• NRS - Number Resolution Service
• GSMA - GSM Association