IP telephony over public networks, after numerous false starts, finally appears to be establishing itself on the local level. Newcomers like Vonage and Packet 8 are opening market after market across the US while major player such as AT&T, Sprint, MCI, and Time Warner have recently announced packet voice services that will place them squarely in the local loop. Where voice over IP (VoIP) once meant a prepaid calling card for Haiti, Lagos, or Bangladesh, and call quality that was as third world as the call's destination, now the technology is close to mainstream. And some would maintain that the reason behind VoIP's ascendancy is the rather recent phenomenon of VoIP peering.

"There is a very strong value proposition in eliminating TDM altogether in voice telephony. Peering is the way to do that," says Raj Sharma, founder of Nextone, a manufacturer of a new equipment category that has come to be known as the session controller, and is used to enable VoIP peering.

Lane Patterson, senior research and development engineer for Equinix, a firm owning dozens of large independent data centers around the world where voice peering takes place, explains why. "Peering essentially eliminates the local incumbent from the picture and all of the settlement charges associated with his network. It fulfills the initial promise of voice over IP."

Christine Hartman, research director for voice over packet for Probe Research goes further. "Everyone is moving toward voice over IP peering, although it's not happening in a big way yet. It's part of a process that will transform the industry and make VoIP not just viable but the norm."

PURE TRAFFIC MANAGEMENT

Voice peering is a rather imprecise nomenclature that has been applied to a number of more or less related strategies for enabling IP telephone connections end to end. It represents a technology trend rather than a unified approach.

In essence, voice peering may be said to be an outgrowth of Internet peering whereby large backbone operators establish reciprocal arrangements for transporting traffic across multiple backbone segments. In voice peering, as in simple peering, the overall aim is to achieve some consistency in traffic management end to end.

In the strictest sense, peering, as the name implies, takes place between peers, normally tier one networks, and does not, as a rule, involve any exchange of payments between carriers for transport services. Instead the arrangements are essentially swaps of bandwidth.

Peering obviously frees major carriers from the needless burden of executing complex billing procedures that would probably result in a wash, but initially the practice was advocated as much to achieve end to end QoS as to reduce administrative overhead--one hand washing the other, so to speak. Certainly this notion lies behind VoIP peering, though it is far from the only justification for the practice.

"There is a lingering stigma attached to voice over IP relating to QoS. The proper management of voice over IP traffic at exchange points through some arrangement like peering is critical to getting past that stigma," says Ajay Joseph, vice president of network architecture and engineering for iBASIS, an international voice over IP service provider.

The iBASIS solution iBASIS isn't really peering in the old sense. Nor is a similar solution offered by TelX, a Manhattan-based network exchange facility that is currently promoting what it calls its Voice Peering Fabric developed by Stealth Communications. (See TelX sidebar).

NEW ERA, NEW LABELS

TelX, iBASIS, and Equinix, among others, all maintain large, secure collocation facilities where numerous backbone carriers terminate their networks and exchange traffic with one another, and where service providers specializing in VoIP who don't necessarily own backbone fiber may also collocate equipment and use that equipment to facilitate data transfers from one backbone to another. Such VoIP independents normally pay for transport, however, and thus don't participate in peering relationships per se. "I guess you could call it private peering," ventures Rory Cutaia, CEO of TelX.

All three companies are at pains to indicate how their respective approaches to Internet packet exchange diverge from the others, and from those of somewhat similar entities such as Switch and Data and the Palo Alto Internet Exchange, but in one important respect they all follow a similar strategy, one to which the term voice peering is being applied for want of any better designation.

What these companies are doing is providing sites where traffic exchanges can take place in a neutral host environment and where any service provider with the financial wherewithal may reside, which had not been the case with the older NAPs set up by the large backbone operators. The traffic exchanges themselves increasingly involve a piece of equipment, called a session controller, that was not present in first and second generation IP voice networks and which, according to the several brash startups associated with the new category, has the potential of transforming the industry. Indeed, the session controller may be said without exaggeration to be the keystone of voice peering today (see "Mechanics of VoIP Peering" sidebar).