Spring Voice on the Net San Jose, CA VoIP Clearinghouses: Update

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Spring Voice on the NetSan Jose, CAVoIP
Clearinghouses Update
Frank Estes festes_at_transnexus.com 770-671-1888,
ext. 224
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What is a Clearinghouse?
Definition (Websters) Date 1832 1 an
establishment maintained by banks for settling
mutual claims and accounts 2 a central agency
for the collection, classification, and
distribution especially of information broadly
an informal channel for distributing information
or assistance New Definition Date 2001 An
entity or groups of entities with the credit
wherewithal to ensure financial remuneration for
all participants that exchange value added
transactions and clear and settle the financial
results of those exchanges on a periodic basis,
as well as, provide a set of standards for
interoperability among the participants.
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Examples of Clearinghouses

• The Securities Class Action Clearinghouse
  provides detailed information relating to the
  prosecution, defense, and settlement of federal
  class action securities fraud litigation.
  (Stanford Law School)
• SWIFT is the industry-owned cooperative
  supplying secure messaging services and interface
  software to 7,000 financial institutions in 198
  countries. SWIFT provides messaging services to
  banks, broker/dealers and investment managers, as
  well as to market infrastructures in payments,
  treasury, securities and trade.
• ATT Global Clearinghouse acts as a trusted
  intermediary for the financial settlement of VoIP
  traffic. This offers a cost-effective alternative
  to building and maintaining an international
  network infrastructure for voice traffic.

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Types of Clearinghouse
Clearinghouses generally have two forms of
ownership a). cooperatives/mutuals/ governments
established by a common purpose ownership -
SWIFT, Federal Reserve Check Clearinghouse b).
Established by a dominant industry entity (VoIP
telephony). - NTT, ATT, Primus, WorldCom,
(Multi-Platform, Multi- Vendor
(Open Standards) - ITXC, Common Vendor, must
use to participate
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Spoke and Hub Model (Geographic)
Clearinghouse
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Benefits and Characteristics of
ClearinghousesVoIP

• Quicker and lower cost interconnection One
  arrangement with the Clearinghouse, not 360
  bilateral agreements. Reduced financial risk and
  financial relationship with only one entity.

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Benefits and Characteristics of
ClearinghousesVoIP

• Expansion of global reach, expand to areas where
  PSTN expansion is expensive. Reduce the cost of
  expansion through partners rather than expensive
  PSTN presence.
• Not one hyper networks, but an mesh of island
  networks with a lower cost structure than a
  similar single network.
• A Clearinghouse can be based upon a geographic
  specialty, financial ability or dominance, or a
  group with similar interests (pre-paid calling
  card operators).
• Quickly penetrate new markets with the addition
  of new partners.

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Exchange versus a Clearinghouse
Chicago Mercantile Exchange, Financial exchange
trading futures, options, commodities eurodollar
options, Nasdaq futures, sp500 index futures,
foreign exchange options and derivatives. Arbinet-
thexchange, operates the worlds online spot
market for voice minutes. More than 250
telecommunications companies use thexchange to
trade, route and settle more than 6 billion
minutes a year. Thexchange compiles and
distributes market data on rates, codes and
quality parameters and develops the routing
intelligence the world's telecommunications
companies use to buy, sell and manage wholesale
voice traffic.
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What is an Exchange?
Date 14th century 1 the act of giving or
taking one thing in return for another TRADE
ltan exchange of prisoners 4 a place where
things or services are exchanged as a an
organized market or center for trading in
securities or commodities b a store or shop
specializing in merchandise usually of a
particular type c a cooperative store or
society d a central office in which telephone
lines are connected to permit communication
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The Role of Open Standards
Benefits for Clearinghouses! Open Standards will
enable simple and secure interconnection
exchanged with third party networks in a
multi-vendor and multi-protocol network. Open
Standards will lower technology and vendor risk
by making telecom equipment a commodity, not a
proprietary pricing game. Open Standards will
accelerate the development of Value-Added
services so VoIP becomes the equal to the PSTN.
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The Role of Open Standards

• Will It Happen (Ma Bell forced it on the PSTN,
  who will force it now)?
• Service Providers must demand quality and open
  standards, not just standards based language and
  promises because the vendor uses Windows 2000.
• Developing VoIP solutions based on open industry
  standards will unite an otherwise fragmented
  market and allow the industry to focus on serving
  customer needs through better quality features
  and value-added services. Business Week August
  2002.

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Carriers Move to Open
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Clearinghouse Market Challenges

• Service Providers (SPs) need to maximize
  geographical service coverage to enable any
  subscriber to reach anywhere.
• SPs need a solution which is future proof
  (H.323, SIP, ).
• Privatization and deregulation are increasing
  competition and competitors.
• IP Packet Networks cost significantly less to
  build, maintain and operate.
• Integration of existing OSS and BSS systems into
  time tested and proven legacy systems.
• H323 and SIP signaling that are standard and
  guarantee interoperability.

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Open Settlement Protocol
The Open Settlement Protocol (OSP) is an Open
Industry Standard for Inter-Network Traffic
Exchange which Includes Authentication,
Authorization, Call Routing and Usage Reporting.
ETSI TIPHON
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A Market Solution!
What do Service Providers need in order to meet
todays market requirements? An open, secure,
scalable IP inter-connection solution which can
be easily integrated with the existing PSTN
network, network expansion plans, and proven
external provisioning and billing systems.
"Our VOIP strategy using OSP has enabled us to
expand our global network coverage while
minimizing the investments required in
international fiber optic cable facilities,
circuit switches, and other costly network
equipment associated with the expansion of a
traditional circuit switched network." John
Melick, President, Primus Telecommunications,
November 6, 2001.
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What is an OSP Server?

• Network software solution that provides secure
  inter-domain call authorization, routing, and
  centralized usage indication collection. SIP and
  H323 compliant.
• Based on ETSI TIPHONs Open Settlement Protocol
  (OSP) standard for secured data exchange
  including
• ITSP to ITSP through Clearinghouse Settlements
• Dynamic policy-based settlements
• Tokens as Electronic service usage signatures
• Inter-Carriers Call Management
• Real-time call authorization
• Policy-based Routing
• Secure bi-lateral accounting (Ingress and Egress
  w/ SSL)

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OSP Call Set-Up
3
Authorization Token
Terminating Gateway
Carriers Customer IP Network
Originating Gatekeeper
Carrier IP Network
Public Internet
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1
OSP Nexus Server
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OSP Usage Collection
Terminating Gateway
Originating Gatekeeper
Carriers Customer IP Network
Carrier IP Network
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Public Internet
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OSP Nexus Server
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Mediation to Billing System
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TransNexus Information
Thank you, Merci Beaucoup, Danke
Frank Estes Vice President TransNexus,
Inc. 540-220-0309 (cellular and
office) Frank.Estes_at_transnexus.com