page 25 of his presentation
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1June 2005 Richard Stastny
Assessing the Business Models
Vertical Multiplay „Stovepipes“vs.
the Horizontal Layered Model
Seizing the VoIP OpportunitiesRome, October 5th, 2005
Richard Stastny, ÖFEG*
* The opinions expressed here may or may not be that of my company
June 2005 Richard Stastny 2
Questions (I will try) to Answer
• What is the Impact of Voice and Everything over IP to the Telecom Industry?
• What is the future of Telcos?– Providing Services in a “multiplay” vertical stovepipe
– e.g. the IMS NGN Model?– Broadband access providers “only” in a horizontal
layered model enabling third party service providers– A combination of both?– Are new approaches needed?– What is the role of Viral and Peer 2 Peer Networks?– Trusted User Identities by Telcos or by Third Parties?
June 2005 Richard Stastny 3
Assumptions
• (End-)users want connectivity via any device, anywhere, at anytime: – Global mobility– Personal Communication
• Which leads to – the Portable Internet– fixed-mobile convergence (FMC)– multi-play (everything over IP)
June 2005 Richard Stastny 4
Some Clarifications first
• What are “stovepipes”?– from a regulatory perspective– from a technical perspective
• What is vertical vs horizontal?• What are Peer-to-Peer (P2P) and Viral
Networks?• What means “multiplay”?• What means Everything over IP (EoIP)?
June 2005 Richard Stastny 5
Title I
DATA
InfoServices
Title II Title III Title III Title VI
VOICE
WirelineTelephony
VOICE
WirelessTelephony
VIDEO
CableTelevision
AUDIO /VIDEO
BroadcastRadio/TV
Regulatory Stovepipese.g.: US RegulationCurrently services (and its underlying technologies) are regulated in these vertical ‘Stove Pipes’
June 2005 Richard Stastny 6
Telephony
A Change of Perspective
Data
Cable
Broadcast
Wireless
Traditional View
Kevin Werbach
June 2005 Richard Stastny 7
Telephony
Data
Current ViewCable
Broadcast
Wireless
A Change of Perspective
Kevin Werbach
June 2005 Richard Stastny 8
DataVoice
Web
Reality
Video
File Transfer
Content
Cable
Wire
less
Satellit
e
Fiber
Devices
Apps
Users
A Change of Perspective
Kevin Werbach
June 2005 Richard Stastny 9
Access
Transport
Services T E LCO
T E LCO
T E LCO
T E LCO
TISPAN3GPP ATISNGN
Regulatory boundaries
Telcos are vertically integrated
TISPAN3GPP ATISNGN
June 2005 Richard Stastny 10
Access
Transport
Services
GlobalInternet
PSTN ISDN
GSMUMTS
xDSLCableFTTH
W-LAN
SIP MAIL IM WEB ...
...
Regulatory boundaries?
Internet: horizontal layering
Viral or Meshed Networks
P2P
June 2005 Richard Stastny 11
What about regulation?
• New approaches are needed:– e.g. US Digital Age Communications Act (DACA)
• Proposals exist: e.g. from the DACA Regulatory Framework Working Group– Discussed Models:– the Antitrust Model– the Railroad Model– the „Layers“ Model– the IP-Migration Model– the EU-Model– the FTC Act Model– Proposal of the Regulatory Framework Working
Group, Release 1.0 • New: US Committee on Commerce and Energy:
Staff Draft on Broadband Legislation or Broadband Internet Transmission Services (BITS)
June 2005 Richard Stastny 12
What is Peer 2 Peer?
• A peer-to-peer (or P2P) computer network relies on the computing power and bandwidth of the participants rather than concentrating it in a relatively few servers.
• P2P networks are typically used for connecting nodes via ad hoc connections.
• Such networks are useful for many purposes:– Sharing content files containing audio, video, data or anything in
digital format is very common, – and realtime data, such as voice, video, IM, Chat, etc. traffic, is
also passed using P2P technology.• A pure peer-to-peer network does not have the notion of
clients or servers, but only equal peer nodes that simultaneously function as both "clients" and "servers" to the other nodes on the network. – This model of network arrangement differs from the client-server
model where communication is usually to and from a central server.
• Some networks and channels use a client-server structure for some tasks (e.g., searching) and a peer-to-peer structure for others.
• There exist many different flavors and algorithms
June 2005 Richard Stastny 13
Viral communications, organic networks, meshed networks
• Viral Communications Media Laboratory Research (Andrew Lippman, David P.Reed, A. Pentland)– Viral communications derives directly from the end-to-end
principle on which the Internet is based — the intelligence is in the end nodes, the network itself maintaining as little state as possible.
– Communications are poised to become personal, embedded features of the world around us. New technologies allow us to make wired and wireless devices that are ad hoc, incrementally installed and populous almost without limit.
– They need no backbone or infrastructure in order to work — instead, they use neighbors to bootstrap both bit delivery and geolocation.
– This re-distributes ownership of communications from a vertically integrated provider to the end-user or end-device and segregates bit delivery from services.
• Communications can become something you do rather than something you buy.
June 2005 Richard Stastny 14
What is Multiplay?
• All types of communication– TV video and audio broadcast– fixed voice communication (telephony)– mobile voice communication– other real-time communications (video,
conferencing, instant messaging, presence, location-based services, white-board, …)
– other data transfer and access, telecontrol, etc. • integrated in one access and one device:
– cable companies add telephony (VoIP) and Internet access (need to integrate)
– mobile operators add video and web-access– Telcos add DSL Internet Access, move to VoIP and
add TV-Broadcast EoIP – IPoE and OnePhone
June 2005 Richard Stastny 15
What is Convergence?
• Convergence is a very abused term• Voice – data convergence
– Backbone people say this is done since more then 20 years
• Fixed – mobile convergence (FMC)– IMS over Fixed Access (TISPAN, ATIS, …)
• OnePhone – GSM and WiFi access on one device– Seamless handover, one number
• Application convergence– e.g. using Outlook to establish calls, see presence
information in MS Word, etc.
• The convergence is with the customer
June 2005 Richard Stastny 16
The hourglass model
Everything over IP
IP over Everything
IP to and from Everywhere
June 2005 Richard Stastny 17
The Internet Model
Tim Denton
June 2005 Richard Stastny 18
The Internet view on the network is:
• the Internet is the network. The next generation network (NGN) is IPv6,
• the Internet is transparent e2e or just "dumb"; it is application unaware,
• user consent and control resides in the endpoints,
• service availability is what matters to users and not QoS. QoS is good as long as network congestion is avoided and if so, voice quality is an endpoint capability.
• the Internet is the result of a continuous evolution and the architecture changes constantly over time.
June 2005 Richard Stastny 19
The ITU-T & IMS NGN model
Tim Denton
June 2005 Richard Stastny 20
The ITU-T view on the network is:
• the NGN will be derived from the PSTN but using IP technology; the IP Multimedia System (IMS),
• the NGN is application aware,• control resides in the network,• the NGN has ample QoS definitions and
guarantees for the network service.• all ITU-T NG networks, such as ISDN,
BISDN/ATM, IMS/NGN/IP are based on grand designs and are not based on a continuous evolution. The changes from TDM to ATM to IP are significant discontinuities in the ITU-T architectures.
June 2005 Richard Stastny 21
VoIP over the Internet
• The Internet is (or is intended to be) a network without central intelligence –> The stupid network (David S. Isenberg)
• The Internet is based on the end-to-end principle– Every user may reach any other user via the IP address– All “services” may be offered anywhere and may be accessed
from everywhere– This is of course also valid for voice and other communication
“services”• VoIP is not necessarily a service, it is an application -
so no service must be provided– Jon Peterson at the ITU-T/IETF NGN workshop in Geneva May
2005• If there is no service provided, you do not need a
“service provider” either.
June 2005 Richard Stastny 22
How does VoIP work?
• What is the difference between the IETF approach for SIP and the NGN (IMS) approach?
June 2005 Richard Stastny 23
The IETF SIP Trapezoid
Outbound Proxy Server
User Agent B
Inbound Proxy Server
User Agent A
SIP
SIP
SIP
Media (RTP)
DNS Server
DNS
Location Server
SIP
Henry Sinnreich and Alan Johnston
June 2005 Richard Stastny 24
VoIP and IP Communications on the Internet
nic.at43.at fwd.pulver.com
SIP server
SIP server
sip:[email protected] sip:[email protected] sip:[email protected]
session
DNS SRV lookupfwd.pulver.com
Internet
June 2005 Richard Stastny 25
Oth
er IP N
etwo
rks
IP Transport (Access and Core)
T-MGF
I-BGF
UPSF
P-CSCF
I/S-CSCF
BGCF
SLF
ChargingFunctions
IWF
PSTN Emulation (R2)
Mw
Mw/Mk/Mm
Mr
Mg
Mj
Mi
Mp Mn
Gm
Gq'
ISC
Cx Dx
DhSh
Ic
Rf/Ro
Rf/Ro
Ib
Iw
Gq'
PS
TN
/ISD
N
SGFMRFC MGCF
MRFP
e4
Ie
Mw
IBCF
Mk
Mk
Application ServersRf/Ro
AGCF
e2
P1
P2
P3
UE
CNG
MG
IMS /PSTN Simulation
Gq'
-
SPDF
A-RACF
Resource & AdmissionControl
Resource & AdmissionControl
SPDFNetwork
Attachment Subsystem
Re Ia
RCEF BGF
Ut
Ut
Overall ETSI TISPAN IMS Architecture – all subsystems
June 2005 Richard Stastny 26
ITU-T NGN System Architecture
Session & Call Control
Application A - 2: A pplication Gateway F E
NNI
Other NGN
other IP MM Network
(e.g. IMS)
T - 6 : Traffic Measurement F E
T - 3 : T.Network Access Process FE
T - 13 : Access Relay FE
T - 1 6 : T. Authentication
&Authorization FE
T - 18 : T. User Profile FE
Transport T - 6 : Traffic
Measurement F E
T - 1 : Core Packet Transport Function s
T - 8 : Transport Resource &
Enforcement FE T - 9 :
Access Border
Gateway F E
PSTN/ISDN
T - 17 : T.Network Access Control FE
T - 21: I - TRCF
Scope of NGN
S - 5 : Media GW Control F E
Internet
gement functions
T - 12 : Edge Node FE
T - 5 : T runk Media
Gateway F E T - 1 1 : Access Packet Transport F unctions
T - 8: MBS - FE T - b: Multicast
M BS FE T - a: MM - FE
T - 8: MBS - FE T - b: Multicast
M BS FE T - a: MM - FE
T - 10 : Access Node FE
T - 4 : Access Media
Gateway F E
T - 2 : Packet
Gateway F E
T - 19: A - TRCF T - 20: C - TRCF
T - 8 : Transport Resource &
Enforcement FE
S - 3 : S. Authentication & Authorization F E S - 10 : Subscription
Locator FE
T - 15: PD FE
S - 9 : Breakout Gateway FE S - 8: Session Control
Proxy FE S - 7 : A ccess GW
Control F E
S - 1: Session Control FE
A - 1: Application Server F E (may include own Authentication, Authorization and Accounting)
S - 4 : Media Resource Control FE
UNI
Terminal Function s
IP address allocation Authentication Authorisation
Access net. config Location mgt.
NAAF IP address allocation
Authentication Authorisation
Access net. config Location mgt.
IP address allocation Authentication Authorisation
Access net. config Location mgt.
NAAF
T - 7 : Media
Resource Processing
FE
S - 2 : S. User Profile F E
Multimedia Service FE
T - 1 4 : S ignalling Gateway
F E
S - 6 : Packet GW Control F E
S - 11 : Interrogating Session Control FE
June 2005 Richard Stastny 27
What is your conclusion?
• Which approach will succeed, if the end-user has the choice what to use?– The cheaper one?– The one which is available (everywhere)?– The one providing more features?– The one easier to use?– The one which will provide eventually more
QoS for additional cost?
June 2005 Richard Stastny 28
Cost Models
Terminal A Terminal BAccess Access
Backbone
Old
Terminal A Terminal BAccess AccessBackbone
New
Line rentalLine rental
Distance and time dependent call charges
Carrier selectionFreephone
Line rental Line rental
Regulation is based on this!
?????Do you sell calls or connectivity?
John Horrocks
June 2005 Richard Stastny 29
Transition from TDM to VoIP
BT 2015
DT 2019
June 2005 Richard Stastny 30
“Broadband access has quietly grown faster than mobile phones in their early stages”
0
10
20
30
40
50
60
70
Year 1 Year 2 Year 3 Year 4
Broadband (1999-2002)
Mobile (1989-1992)
Broadband and mobile growth, millions, world
Source: ITU World Telecommunication Indicators Database
Broadband’s fast growth
June 2005 Richard Stastny 31
Law and Policy Outmoded
Traditional Telecom Model
New Model
InfrastructureInfrastructure
BB Data ServiceBB Data Service
InfrastructureInfrastructure
Voice ServiceVoice Service
Data ServiceData Service
Value-AddedServices
Value-AddedServices
VoiceVoice
Value-Added ServicesValue-Added Services
IMIM BlogsBlogs
Vested interests live here!
Brough Turner
June 2005 Richard Stastny 32
Mike Powells 4 Internet Freedoms
1. Freedom to Access Content: Consumers should have access to their choice of legal content;
2. Freedom to Use Applications: Consumers should be able to run applications of their choice;
3. Freedom to Attach Personal Devices: Consumers should be permitted to attach any devices they choose to the connection in their homes; and
4. Freedom to Obtain Service Plan Information: Consumers should receive meaningful information regarding their service plans.
add: Freedom to obtain your own location information
regulation to concentrate on bottlenecks
June 2005 Richard Stastny 33
One Problem remains: Security
• Authentication, Authorization, Accounting, Non-repudiation, …
• In the vertical model you trust the network (the carrier) and they trust each other (circle of trust)– In the fixed network there is a “trust-by-wire”, – in mobile networks you have a SIM-Card from the provider
you trust (the only real asset of IMS)– So you trust a Calling Line Identification
• But do you trust the VoIP provider of the other user?– Especially if he is his own provider ;-)
• In the horizontal layered end-to-end model, also an end-to-end AAA is required.
• There is an additional requirement: – the end-user does not want to have too many identities, – ideally only one for all types of communication
-> digital identity
Trusted End-User Identity
June 2005 Richard Stastny 34
End-to-End Trust
• This requires the introduction of an end-to-end trust model
• An end-to-end trust model requires the use of certificates aka digital identities
• This is theoretically no problem, the necessary tools and protocols are available
• The problem is the trust model:– Hierarchical (e.g. PKI, X.509) or P2P (e.g. PGP)– PGP does not scale– In the PKI model you need a trusted 3rd party– The problem: both ends need the same trusted 3rd party
• -> who is the root entity everybody trusts?• Some developments are on the way, but very slowly
and not very user-friendly (e.g. liberty alliance, eCards, etc. )
June 2005 Richard Stastny 35
Two Global (IP-based) Networks
• heavily regulated• optimized for speech• end of lifetime
• accounting: cascading,termination fees
• vertically integrated• global connectivity• mobility via roaming
• (still) unregulated• multipurpose• regarding IP Comm. begin of lifetime• accounting: peering
• horizontally layered• global connectivity• mobility and nomadic
usage natively
Global Phone Network
Global Internet
NGN P2P
June 2005 Richard Stastny 36
Scott Bradner at NGN Conference
• Bradner says – the ITU's model is designed to provide defined and
guaranteed QoS, – while the Internet is a best-effort model based on
bandwidth capacity. – He says both are applicable given the network
circumstances - if there's plenty of bandwidth, there's no need for QoS controls; if not, there is.
• the two models will not converge, but will interoperate.
Next Generation Networks Conference in Washington, D.C. last week
June 2005 Richard Stastny 37
Some Conclusions: the next +5 years?
• Now lets assume the end-to-end Internet philosophy is taken seriously and the horizontal approach is followed up further
• The future developments will concentrate on:– EoIP – IPoE – IP Anywhere– Broadband as Universal Service– Multiplay, Computainment, rich and simple SW– Personal, mobile/nomadic, general purpose devices– Wireless communications– P2P serverless communication (also with SIP)– Meshed networks– Viral communications; ambient, organic networks
• Digital User Identities
June 2005 Richard Stastny 38
The Impact?
• Based on these assumptions, what will be the impact of these developments on:– Regulation? – Universal Service Obligations?– Universal Service Funding?– Emergency Services?– Legal Intercept?– On the Telcos?
• Side Remark:The real „regulatory“ battle of the future:Digital Rights Management
June 2005 Richard Stastny 39
Résumé
• What is the Impact of Voice and Everything over IP to the Telecom Industry?
• What is the future of Telcos?– Providing Services in a “multiplay” vertical stovepipe
– e.g. the IMS NGN Model?– Broadband access providers “only” in a horizontal
layered model enabling third party service providers– A combination of both?– Are new approaches needed?– What is the role of Viral and Peer 2 Peer Networks?– Trusted User Identities by Telcos or by Third Parties?
June 2005 Richard Stastny 40
Telco Priority 1
• Provide local access, both for your own users and “roamers”:– Stick to the knitting– Go where the money is– Keep your customer– There is only local competition– Resale and wholesale– The killer app here is speed– Some nerds will have their own servers, but
they still will need access
June 2005 Richard Stastny 41
E.g. overcome Access Bottleneck
InternetBackbone
VoiceVoice
E-MailE-Mail
ERPERP
SalesSales
FinanceFinance
VideoVideo
EthernetLAN
Switches
EthernetLAN
Switches
BroadbandModem
orAccess
Gateway
BroadbandModem
orAccess
Gateway
Gigabit Ethernet
10/100/1000 Mbps Ethernet, or WiFi
Enormous Long-Haul Bandwidth
Local Loop
1-2 Mbps ?
1000-to-1 disconnect !
Brough Turner
June 2005 Richard Stastny 42
Telco Priority 2
• Provide services– OK, some nerds and large enterprises will have their
own servers, they will not need a provider at all,– but most end-users, SOHO and SME want their
services hosted or at least configured– Keep your customers– Provide digital identities (they only real asset of IMS
is the ISIM (SIM Card)– Provide accounting services– You may provide resale and wholesale also
• BUT, always keep in mind that the competition here will be global
• You have to compete against e.g. Skype, Google, eBay, Amazon, etc.
• You will need excellent products and excellent service
June 2005 Richard Stastny 43
What happened in the last 4 weeks?
• eBay bought Skype for 4bn $• The Economist • Mobile operators announce
fixed line replacement• Mobile operators will block
VoIP• Google announces Secure
WiFi over VPN• Neustar & GSM Association
team up to create an alternate DNS root to lock in customers
• Google proposes free WiFi access in SFO and later the whole US
June 2005 Richard Stastny 44
The War is on
Thank you
Richard StastnyÖFEG
+43 664 420 4100
http://voipandenum.blogspot.com