Switching in an IP Environment


FCC HQ (Photo credit: Wikipedia)

In this industry there are always interesting fights going on behind the scenes. In fact, it seems like a lot of the policies made by the FCC are in response to battles being waged between carriers. As the FCC intervenes in these fights they end up creating policy as they help solve issues.

This Letter is a correspondence with the FCC about a current dispute that is going on with Verizon and AT&T disputing the way they are being billed by Bandwidth.com. and Level3. This fight is an interesting one because it asks the FCC to affirm that is supports a migration to an all-IP network.

The dispute is over what is called OTT (Over-the-top) VoIP. OTT in this case means that there are voice calls being made from a service provider’s network for which the service provider is not providing the switching. Instead the service provider is buying switching from a CLEC like Level3. And all of the calls involved are VoIP calls, meaning that they are being delivered from the customers to the switching CLEC using the IP network rather than the public switched telephone network.

Here is how this might happen, although there are other configurations as well. The network in question is clearly an IP network to the customer in order for this to be considered as VoIP. That means it is either a fiber-to-the-home network, DSL over a copper network or a cable system that has been upgraded to send the voice over the data path. In a traditional TDM network the calls from customers are routed directly to a voice switch and that switch will decide what to do with the call based upon the numbers that were dialed. But in this scenario there is not a switch in the subscriber’s network. Instead, when a customer makes a call, a signal is sent to wherever the switch is located telling it where the customer wants to call. That remote voice switch then tells the network owner where to send the call. It is no longer necessary in a smartswitch environment for the call to actually touch the switch, but the switch is still the device that decides how to route the call.

The parties are fighting about whether access charges ought to be charged for an OTT VoIP call. Access charges are fees that long distance carriers pay at both the originating and terminating end of a call to compensate the network owner at each end for processing the call. Verizon and AT&T don’t want to pay the switching component of the access charges for these calls. They are arguing that since there is not a physical switch in the originating network that such charges aren’t warranted.

Broadband.com and Level3 are arguing that the switching is being performed regardless of the location of that switch. They point out that for the FCC to rule otherwise would be counter to the FCC’s desire for the telephony world to migrate to an all-IP environment.

If the FCC rules that AT&T and Verizon are right, they will be saying that a carrier performing a switching function on legacy TDM technology can bill for performing that function but that somebody doing it more efficiently in an IP environment cannot. I just published a blog yesterday talking about ways to share a softswitch and that is exactly what is happening in this case. In an all-IP environment the network can be more efficient and not every carrier needs to buy and operate a switch. They can instead contract with somebody else to switch calls for them which is easy to make happen in an IP environment. Access charges are designed to compensate local carriers for the cost of performing certain functions and one has to think that the network owner in this case is still having to pay for the switching function and should get to recover some of that cost.

In fact, there has been switch sharing for years even in the TDM world. I know several rural LECS who lease switching from their neighbors and who have not owned a switch for decades, and they have always billed the switching access charge element. That element reimburses you for the cost of switching and it really shouldn’t matter if that cost is made up of the depreciation on a box you paid for or else a fee you pay to use somebody else’s box. Cost is cost and the key fact is that calls can’t be made or received from an area if somebody isn’t doing the switching.

I always find arguments by the large RBOCs to be interesting because they wear many hats. AT&T and Verizon are wireless carriers, LECs and long distance companies, and often when one part of the large companies make regulatory arguments it will be contrary to the interest of one of the other branches of the company. In this case the long distance branches of the RBOCs are looking for a way to avoid paying access charges. But the LEC side of both Verizon and AT&T share switching and they do not have a switch any more for every historic exchange area. So to some degree these companies are arguing against something that another branch of their company is doing. And this is often the case in many regulatory arguments since these companies do so many things.

Hopefully the FCC will agree with Broadband.com and Level3. If they rule otherwise they will be telling carriers that it is not a good idea to establish switch-sharing arrangements that are more efficient than having every carrier buying the same expensive boxes. If the FCC really wants the telco world to move to IP they need to get rid of any regulatory impediments that would make an IP network less desirable than a legacy network. Hopefully the FCC sides with efficiency.

Sharing a Softswitch

I see a lot of companies buying softswitches and it makes me wonder if it might not be a better economic idea to share a switch with somebody else. There is so much potential for savings that anybody thinking of installing one should consider it. In the following I will discuss what it means to share a softswitch and look at the pros and cons.

The Basic Requirements. Sharing requires that somebody already owns a softswitch that can control geographically separated gateways. Such a switch must be able to share both the inter-machine trunking gateways, which facilitate PSTN interconnection and the media gateways which facilitate interconnection to customers. Sharing is also going to require interconnection between the two sharing parties. This means there must be some sort of trunking established between the two parties that can be either traditional TDM trunks or IP trunks.

What Would be Shared. The following elements are the components of a softswitch that can be shared, meaning that only one of each of these needs to be purchased:

  • Core softswitch – the device that contains subscriber and routing information;
  • Feature Server – the device that facilitates phone features;
  • Session Border Controller – the device that provides security between the softswitch and the gateways, some CPE and other networks;
  • Signaling Gateway – the device that interface with the SS7 network;
  • Unified Messaging or Unified Communications server – the device that stores, controls and converts data used in unified communications services like voice mail, email notifications, voice to text and text to voice, etc.

What the Second Company Needs to Buy. If you are going to share somebody another softswitch you only need to buy a few components. These are referred to as the distributed elements in a softswitch network. The two elements that you must buy are:

  • Inter-machine Trunking Gateway – for local interconnection to the PSTN. This lets the lessee still connect to the world using the same connections in place your legacy switch;
  • Media Gateway – for local connection to local distribution network and/or CPE.

Data connections required. As mentioned, there must be a data connection established between the softswitch and the new location that allows communications between the shared elements housed at the core softswitch and the distributed elements found at the new location. The size of the data pipe/connection required depends on the amount of data required between the shared and distributed elements. It only requires a few megabits per second to transmit voice traffic. You’ll need a connection in the tens of megabits per second if you are using a lot of features like voice mail & unified communications or a lot security invocation.

Partitioning. The owner of the shared elements will have to ‘partition’ the shared elements in order to ensure that subscribers of the sharing company can’t be seen or manipulated by other sharing companies; Partitioning will also hide the call detail records, routing control and will make sure that the shared elements can communicate through to the multiple networks operated by the sharing companies.

How to Determine if Sharing is the Right Idea. The big benefit is the savings, but there are other considerations:

  • It is inexpensive to buy only the distributed elements. Depending on how large you are, the distributed elements could cost anywhere between $25k and $200k which is far less than buying a new softswitch.
  • What is the cost of the data connection needed to connect the two locations? Generally companies make these connections using establish Internet backbone and this typically adds nothing to that cost.
  • How much does the switch owner want to charge for using the softswitch core? There are many ways to charge for this service. It could be done on a flat rate monthly lease, a connection fee per telephone number.
  • Reliability. How good is the Internet connection between the two companies? If that connection is lost then voice processes will stop. Ideally the connection ought to be on a ring or have redundant routing.
  • Control. I often hear a company thinking of leasing say that they feel like they don’t have enough control in a shared switch. But you can get access to all important switch functions remotely.

When I look at the numbers I find that it is almost always better to share a switch rather than to buy a whole new switch. However, the one factor that still often drives the decision to buy a new switch rather than share is the reliability of the data connection between the two parties. But this is generally about the same reliability as connecting remote switches in your own network to a host switch.

If you want to consider sharing a softswitch call CCG and we can help you work though this decision.


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And there are a lot of nuances to be in compliance:

  • It must be filed electronically.


The filing requires the following:




Advantages to Customers of SIP Trunking


Hot Desk, GTi, University of Glamorgan










Regulatory Alert: FCC Acts on Numbering Issues

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Hosted IP Centrex Service

In a few other blogs I have referred to IP Centrex as a new service for businesses, so I thought I ought to explain the service. Hosted IP Centrex service uses data-centric phone sets to replaces key system, PBX system or existing Centrex service. The IP Centrex phones can be controlled by a softswitch or by connecting an IP PBX to a legacy switch.

A number of CCG’s clients are having success selling IP Centrex to business customers. The product includes the best features of a large PBX plus many additional “value added” services that are only available through IP based phone service. The product can be integrated with a subscriber’s computer systems to provide such features as dialing from Outlook, common databases for all employees, etc.

There is a wide range of phone sets available that include a screen that allows a caller to manage their calling. The product requires a customer to buy new IP handsets and many of my clients lease sets as part of the price.

This product has a large potential market since it can be tailored for the very small or very large business. It is easy for the carrier or the subscriber to customize features for each phone or for the whole system.

There are a number of benefits of this product to both the carrier and to subscribers. Some of the biggest advantages:

Benefits to the Carrier

  1. Can be sold to any business subscriber regardless of what service they had before. It’s a good replacement for B1’s, trunks or traditional Centrex.
  2. Subscribers become stickier to the extent you can get them hooked on custom features not available elsewhere.
  3. Allows a carrier to sell service outside your traditional footprint. You just need to find businesses that have a decent high-speed data connection. This also means you can sell voice services to all branches of a customer’s business and not just to those in your footprint.
  4. It promotes the Company’s data products and is easily bundled with data.
  5. The product has a lot of pricing flexibility and can be sold to compete with multiple B1’s or traditional Centrex. You should be able to profitably beat the price of any traditional phone product.

Benefits to Business Subscribers

  1. The Subscribers get a telephone system that equals the features of a high-end PBX.
  2. The Subscriber no longer needs to buy or maintain a PBX. The customer can buy the IP phones or lease them from you.
  3. Subscribers can portray a unified professional image to the public. Employees at remote locations can be integrated into the telephone system. And small companies can act like bigger companies by the use of the various features. Remote employees can be made to feel like a part of the Company.
  4. Subscribers can tailor the phone system and each phone to meet their needs. There are hundreds of features available including many that were not available on analog systems.
  5. Subscribers can easily manage the features available on each set using the Subscriber portal that allows for easy and immediate changes to the features on any or all phones.
  6. Phones are portable and an employee can quickly move their phone from desk to desk or office to office and keep the same extension, voice mail and features.
  7. Phones can be programmed to be nomadic (portable, but not mobile). This means that an employee can take the phone out of the office and work at home or in a hotel as if they were in the office.  All features and functions of the phone remain unchanged.

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Launching a New Product

At CCG we often introduce clients to new products. Historically our clients had the leisure to introduce products slowly since they were not operating in highly competitive markets. However, today we see speed to market being a major factor in being successful. Since there are many steps needed to launch a new product and because it will touch every part of your organization, it is mandatory that you are organized and have a plan to develop and launch a complex product on time and do it well. Lack of organization will inevitably lead to delays, or worse, to a product that is half-baked and full of problems.

At CCG we are experts at the process of launching new products and many of our clients now include CCG as part of the new product development and launch team. We can provide the needed discipline and the extra manpower and expertise needed to insure that a product is launched on time and is customer-ready.

The following (using the example of launching IP Centrex) is  a list of the basic steps required to launch a new product. This list is abbreviated but demonstrates how launching a new product will touch every part of your organization. Without a clear plan it is easy to get bogged down and delayed.

Steps needed to launch IP Centrex

Define the Product. Define the specific market for the product. In the case of IP Centrex, should you have different packages to reach different parts of the market? (For instance there might be a version for typical small business, a more complex product for more businesses like doctor’s offices, and a product for businesses with a centralized receptionist). Define the equipment and software needed to launch the product. What kind of handsets / functionality do you want to offer? Will you let subscribers use their own devices like smart phones and tablets? Will you support integration of phones and computer systems (Outlook, etc,)? Will you be supporting 911 portability (supporting 911 when the customer moves the phone off-premises)?

Determine Technical Readiness. Is your switch ready to support the product or do you need an upgrade? Will your OSS/BSS support the new product’s billing and operational requirements? If you are going to launch using something other than a softswitch, take the steps needed to choose the right gear and/or partner. Find a 911 mobility vendor to support remote 911 if you go this route. How are you willing to distribute the product – over your own network, over leased facilities, or over the open internet. Anticipate and address any IP addressing issues. Analyze the customer premise network requirements –  premise wiring alternatives, customer demarcation points, VoIP quality assurance capabilities, etc.

Product Pricing. Create a name and branding for the product. Determine the market prices of competing products (trunks for existing PBXs, B1s, traditional Centrex, other VoIP providers, etc.). Determine your pricing strategy (one price fits all vs. pricing based upon what the subscriber is using today). Determine your pricing elements (individual service elements like stations, talk paths, features and calling plans or a more all-inclusive element). Determine if you are going to sell and/or lease handsets as part of the product. Will this be bundled with other products like data or long distance?

Testing. Buy test handsets/stations. Activate and then test each switch feature with the handsets. Create a common or custom profile configuration for supported and chosen handset types. Make sure that you have an easy way to load the profile configurations into handsets/stations. Make sure the chosen features will work with each other (a common problem when combining multiple complex features). Test OSS and billing system.

Regulatory. Are tariff updates needed? If you are going into new markets will you need to open new 911 PSAPs? If sold as a regulated product, how does SLC charge apply? Are there any CALEA issues?

Sales and Marketing Readiness. Define the value proposition for the subscriber. Develop marketing literature. Update website. Develop order form that will capture the complexities of the product.

Internal Training. Train salespeople and CSRs on how to use the product. Train help-desk staff. Train anybody who will install or train on the product. Should your own company be the first test customer?

Customer Training. Develop customer training material/manuals.  Consider a web tool andor video tool. Develop training plan. Will you train every employee or train the trainers? How much will you charge for training? How do future subscriber employees get trained?

Implementation. Develop installation plan/checklist. Order IP stations. Perform any customer premise network changes required. Install and verify data connection(s). Install stations and any managed network equipment required. Develop plan to verify that every station is updated and provisioned correctly. Conduct subscriber training sessions. Ask for subscriber feedback on the quality of the implementation. Render and verify first bill.

NOC/Customer Support/Troubleshooting. How will you handle customer support? Will the first level of trouble shooting be done at the CSR level or by specially trained individuals? Who will have access to the tools and training required to assist subscribers?  Will billing issues and technical issues be handled by different employees or by the same employees?

Ongoing Product Maintenance. How do you stay abreast of new features, services and apps that may benefit your subscribers?  How and when do you introduce updates to subscribers?