By: Mary Evslin, Vice President of Marketing and Customer Success at ITXC Corp

An Internet telephony exchange carrier connects and adds value to a "network" of individual companies, carriers, and smaller networks that exchange real-time voice and fax in IP format. The exchange carrier provides authorization, routing, settlement, redundancy, quality control and network management to the members of the network, giving each member the value of the total network. An Internet telephony exchange carrier today sells minutes of a quality good enough for many, but not all, applications.

A Tier 1 IP telephony exchange carrier adds the most value to a network by providing a global IP footprint, redundancy and therefore a consistent quality of service. Tier 1 carriers also provide provisioning assistance, timely payments to terminators, Best Value Routing (BVR) and consistent quality to originators.

An IP exchange carrier today must build a network that is robust and global. It then charges the customers, who are resellers or carriers, a wholesale price for the calls and pays the terminating gateway operators for every minute terminated on their gateway while controlling the quality all the time. Rates from a Tier 1 carrier are often a few cents higher than from Tier 2 or 3 carriers, but always below PSTN. The quality is what is paid for.

An example might help. A carrier selling low-end products, like pre-paid calling cards, to immigrants or college students in their country wants to purchase routes at a reduced cost. The carrier usually connects, at least at ITXC, to a switch and purchases whichever routes it desires, as with any other international carrier. However, the Internet telephony route is typically at the top of the routing table because Best Value Routing allows the most favorable prices.

The Internet telephony exchange carrier routes most calls over the public Internet, a Virtual Private Network (VPN), or a leased line. Buyers can decide on the call quality they need and what price they are willing to pay. Calls that go over the public Internet are the most inexpensive and the quality is often similar to cellular or 1980s-ish satellite calls. Calls that go over a transport mechanism where the exchange carrier has total control of the traffic are more expensive. They can be of toll quality.

Quality comes from two things: gateways and transport routing or congestion. Always purchase gateways, or routers with gateway functionality or switches with IP conversion ability from a vendor that follows industry standards, is committed to interoperability, and has a large R&D department with a well conceived plan for the future. You do not want to spend $100,000 purchasing equipment that limits you to a very small network or that will be abandoned in the near future. Also, you should not build your own. There are many gateway vendors already in the market who have spent the last six months to two years learning how to maximize this new technology. Take advantage of their expertise. Experienced gateway manufacturers use industry accepted codexes, echo cancellation techniques, and buffering plans that greatly improve call quality.

The most frequent reason for a poor call quality today is congestion in the "pipe" that the IP packets travel on. Let’s simplify this a little. In the world of email, a modem sends IP packets to another modem. Each packet leaving the sending modem is numbered and free to travel its own route to the terminating modem. If the network is congested, the packets do not arrive in sequential order. If Packet 6 does not arrive at all, the receiving modem "asks" the sending modem for a re-send of packet 6. By the time they all finally arrive and line up correctly, you’ll say "Gee, email is slow today." While inconvenient, such delay is still "acceptable" - with email, store and forward fax, and voice mail. However, it is not okay with real-time applications like telephony.

Often, pipe congestion delay is affected by packet routing problems. When packets leave the originating gateway, they take various routes over the Internet on their way to the terminating gateway. In the previous scenario, when packet 6 does not arrive, the terminating gateway has to do something that is difficult for a computer to do -- make a subjective decision - if Mary will be more annoyed waiting for packet 6 to arrive or having the call completed with the packet missing. If the gateway "chooses" to complete the call with the packet missing, it "hopes" that her ear fills in the missing packet during the conversation. No matter the outcome, the decision-making process creates more delay.

A Tier 1 IP telephony exchange carrier has experience with what is called Best Value Routing (BVR). Using BVR, the carrier uses a combination of PSTN and various IP routes to complete calls at a consistent quality. There are several reasons why using a combination of PSTN and IP may be the optimal solution for routing a call. For example, if a call originates in Boston and is destined for Moscow and there is a change of power in the Kremlin, the Internet could be so congested that the packets are not arriving sequentially and many packets are getting lost. The quality of the call is not good. The technician in the Tier 1 carrier’s NOC should see this and reroute the calls to a different terminator in Moscow or to PSTN until the congestion subsides.

And if the change of power causes the economic crisis to get worse, the local ISP may not be able to pay its bills and UUNet may cut it off. The NOC should immediately see an error message. The NOC should reroute the call to another terminator in Moscow, hopefully with a different ISP, route calls from Slovania to Moscow or if need be fall back again to PSTN until the problem is resolved. A Tier 1 IP telephony exchange carrier has the ability to purchase PSTN routing and the tools to know when to use it to keep the call quality consistent.

The Internet telephony exchange carrier sells discounted calling to call originators of a consistent quality for many of their low end products today. As the technology improves over the next year, the industry expects to reach near toll quality.

The Internet telephony exchange carrier provides the terminator with minutes. The terminator does not need to have hundreds of relationships all over the world and does not have to worry about billing and collecting from all of them. The terminator has one relationship with the Internet telephony exchange carrier who takes care of the network, the quality, the authentication and settlement issues.