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Circuits to Packets - policy and regulation for the IP transition

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How should the policy community react to the transition for voice from circuits to packets? This presentation describes some of the issues in using packets, the role of the regulator in addressing them, and suggests an alternative regulatory approach. This includes a "Pigouvian tax" on the use of numbers where the quality assurance is not provided.

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Circuits to Packets - policy and regulation for the IP transition

  1. 1. CIRCUITS TO PACKETS ITU Telecom World Doha, 7th December 2014 MARTIN GEDDES FOUNDER & PRINCIPAL MARTIN GEDDES CONSULTING LTD With annotations
  2. 2. What is this presentation about?
  3. 3. Packets can mean voice quality problems 1
  4. 4. Regulators have a role in managing quality 2
  5. 5. It is time to consider new commercial and technical models 3
  6. 6. 1 2 3
  7. 7. Packets can mean quality problems 1
  8. 8. |8 Phone calls: basic facts
  9. 9. |9 IPX High perceived value The first application of networks is usually voice, and take-up among network users is typically close to 100%
  10. 10. |10 Failure is very visible Even short failures are very obvious. The endowment effect means that losing the quality level you have become accustomed to causes great dissatisfaction. This can create a crisis of legitimacy for regulators.
  11. 11. |11 Low data volume Everyone knows that voice doesn’t use much ‘bandwidth’, but that isn’t really the issue.
  12. 12. |12 High quality need
  13. 13. |13 14/12/2014 | ©2014 Martin Geddes Consulting Every application, including voice, has a ‘budget’ for quality.
  14. 14. Time One part of the ‘budget’ is the end-to-end packet delay
  15. 15. Variability The other is the amount of variability in loss and delay, since even the cleverest software cannot adapt if this is too high.
  16. 16. |16 Circuits In the world of circuits, we reserve capacity for individual calls.
  17. 17. TDM circuits… (Time Division Multiplexing)
  18. 18. Zero Variability You aren’t competing with other users, so you experience total isolation from what everyone else is doing on the network.
  19. 19. …to packet-based statistical multiplexing
  20. 20. MORE DEMANDS ON OUR ‘TIME BUDGET’ 2G, 3G, 4G OTT WiFi
  21. 21. |21 14/12/2014 | ©2014 Martin Geddes Consulting Packet world More Variability
  22. 22. |22 So why use packets?
  23. 23. |23 Money is the answer, what is your question? — Richard Shockey  
  24. 24. |24 14/12/2014 | ©2014 Martin Geddes Consulting Fill the silences We long ago discovered we could pack in about 30% more calls into a TDM circuit by filling the silences in our speech.
  25. 25. Intensify resource sharing Packet networks take ‘fill the silences’ to its logical conclusion. It’s bit like taking a small piece of land, and sharing it among many people.
  26. 26. 14/12/2014 26 Waiting time This comes at a price: more waiting and variability.
  27. 27. |27 Examples of performance problems
  28. 28. |28 BT 21CN VOICE The UK incumbent operator spent a lot of money trying to replace circuits with packets for landline voice calls
  29. 29.  FAILED  Yet the project was infeasible from the outset: they tried to fit the packet signalling within the timing constraints of the circuit network, which was impossible.
  30. 30. |30 IPX These are not isolated issues, but are endemic to our industry. Consider the standard for quality-managed packet voice, IPX.
  31. 31. IPX Specification IR.34 v9.1§6.3.4 This does not specify a working phone call! The average over a month could still allow for a 40 minute period with 100% loss, and be compliant.
  32. 32. IPX performance and cost issues Why? Media and signalling are joined, which forces traffic the “long way” ?
  33. 33. Session Border Controllers
  34. 34. |34 De-jittering De-jitter at every boundary Because circuits have zero variability, we locally optimise to “low variability”.
  35. 35. |35 This creates the maximum possible total packet delay.
  36. 36. |36 Result? Quality budget is used up
  37. 37. |37 Everything fails under load. Why? No call admission control (CAC), so no graceful degradation. Large European MNO’s enterprise converged voice service
  38. 38. |38 Unmanaged performance hazards Why? No schedulability limits in CAC. (and every other UC vendor)
  39. 39. |39 VoLTE High cost of association management Why? It needs IMS High cost of quality Why? Weak scheduling; waste in code space + backhaul Limited revenue Why? Assurance only offered to telephony, not other apps
  40. 40. |40 VoLTE High cost of association management Why? It needs IMS High cost of quality Why? Weak scheduling; waste in code space + backhaul Limited revenue Why? Assurance only offered to telephony, not other apps
  41. 41. |41 VoLTE High cost of association management Why? It needs IMS High cost of quality Why? Weak scheduling; waste in code space + backhaul Limited revenue Why? Assurance only offered to telephony, not other apps
  42. 42. |42 Small cells Failure due to timing issues Why? Media, signalling, network control are on the same path. These lack isolation; have a coupled load; result is self-induced failure.
  43. 43. |43 Small cells Failure due to timing issues Why? Media, signalling, network control are on the same path. These lack isolation; have a coupled load; result is self-induced failure.
  44. 44. |44 Broadband voice Growing voice quality problems Why? Worsening “non-stationarity” QoS suffers from “quality inversion” AQM creates new failure hazards Clever voice codecs just add more delay
  45. 45. |45 Broadband voice Growing voice quality problems Why? Worsening “non-stationarity” QoS suffers from “quality inversion” AQM creates new failure hazards Clever voice codecs just add more delay See “Networking and the Internet’s ‘global warming’ problem”
  46. 46. |46 Broadband voice Growing voice quality problems Why? Worsening “non-stationarity” QoS suffers from “quality inversion” AQM creates new failure hazards Clever voice codecs just add more delay See “The six challenges of selling QoS”
  47. 47. |47 Broadband voice Growing voice quality problems Why? Worsening “non-stationarity” QoS suffers from “quality inversion” AQM creates new failure hazards Clever voice codecs just add more delay See “Why Active Queue Management should worry telco investors”
  48. 48. |48 Broadband voice Growing voice quality problems Why? Worsening “non-stationarity” QoS suffers from “quality inversion” AQM creates new failure hazards Clever voice codecs just add more delay
  49. 49. |49 DSL Lack of service continuity Why? ADSL – 30 sec retrain outages VDSL – frequent short retrains
  50. 50. |50 DSL Lack of service continuity Why? ADSL – 30 sec retrain outages VDSL – frequent short retrains
  51. 51. |51 Systemic risks Going from 400+ to 6 switching centres with IP Transition: can anyone model the performance risks in disaster situations? (Answer: not really.)
  52. 52. |52 Why all these problems?
  53. 53. We’re trying to build network skyscrapers…
  54. 54. But we’re in the “digital medieval” period; the science isn’t yet ready.
  55. 55. Result? Failure under load
  56. 56. Statistical sharing = Variability
  57. 57. Source: Wikipedia/Imperial War Museum It’s like when we moved to jet aircraft. We didn’t understand the dynamic loading properties of the materials.
  58. 58. Source: Wikipedia/Krelnik The result was catastrophic failure in operation. Passengers were flying what were in effect experimental aircraft. (SDN/NFV are experimental technologies being pushing into deployment…)
  59. 59. |59 Why? Circuit thinking! “Monoservice fallacy” The mistaken belief that capacity and schedulability are the same thing.
  60. 60. |60 Two very common basic technical errors:  More capacity solves schedulability problems.  Average measures are what matter.
  61. 61. |61 Two very common basic technical errors:  More capacity solves schedulability problems.  Average measures are what matter.
  62. 62. |62 Two very common basic technical errors:  More capacity solves schedulability problems.  Average measures are what matter.
  63. 63. |63 IMS manages capacity constraints not schedulability constraints You might want to ask for your money back.
  64. 64. |64 This will get worse! SDN/NFV create more variability and aggregate failures.
  65. 65. |65 Current regulatory framework has no concept of schedulability
  66. 66. Quality fraud |66 14/12/2014 | ©2014 Martin Geddes Consulting “Bad” network operators take the cash for delivering voice, but will engage in “quality fraud”.
  67. 67. 1 2 3
  68. 68. Regulators have a role in managing quality 2
  69. 69. Future packet voice dystopia
  70. 70. |70 Sustainability trap International voice quality assurance market will become irrelevant Why? Price reductions due to no quality floor Performance crises needing more equipment OTT outperforms PSTN/PLMN
  71. 71. |71 Sustainability trap International voice quality assurance market will become irrelevant Why? Price reductions due to no quality floor Performance crises needing more equipment OTT outperforms PSTN/PLMN
  72. 72. |72 Sustainability trap International voice quality assurance market will become irrelevant Why? Price reductions due to no quality floor Performance crises needing more equipment OTT outperforms PSTN/PLMN
  73. 73. |73 Sustainability trap International voice quality assurance market will become irrelevant Why? Price reductions due to no quality floor Performance crises needing more equipment OTT outperforms PSTN/PLMN
  74. 74. |74 Economic crisis in voice market! Costs can’t drop (due to market size and overheads) but prices can!
  75. 75. |75 The OTT quality arbitrage is finite So OTT can’t take up the slack
  76. 76. Future packet voice utopia
  77. 77. |77 Sustainable growth New revenue Quality floor and price floor established Wide range of assured services Lower costs Decreased requirement to buy equipment
  78. 78. |78 Sustainable growth New revenue Quality floor and price floor established Wide range of assured services Lower costs Decreased requirement to buy equipment
  79. 79. THE BIG QUESTION! How to get trustworthy services, that are affordable, and enable innovation?
  80. 80. |80 So, what to do?
  81. 81. |81 Understand packets! “Translocation as a Service” (with contention) vs Circuit fragment (without contention) Need to understand what the packet service is!
  82. 82. 4 REALITIES TO DEAL WITH 1.The business model will change 2.The media will shift from circuits 3.Your power is over the E164 numbering 4.The future value is in trusted services
  83. 83. 4 REALITIES TO DEAL WITH 1.The business model will change 2.The media will shift from circuits 3.Your power is over the E164 numbering 4.The future value is in trusted services
  84. 84. 4 REALITIES TO DEAL WITH 1.The business model will change 2.The media will shift from circuits 3.Your power is over the E164 numbering 4.The future value is in trusted services
  85. 85. 4 REALITIES TO DEAL WITH 1.The business model will change 2.The media will shift from circuits 3.Your power is over the E164 numbering 4.The future value is in trusted services
  86. 86. 4 REALITIES TO DEAL WITH 1.The business model will change 2.The media will shift from circuits 3.Your power is over the E164 numbering 4.The future value is in trusted services
  87. 87. |87 Issue: Retail Numbering does not impose a quality requirement.
  88. 88. |88 Outcome-oriented policies (not tied to implementation mechanisms) Answer…
  89. 89. |89 Issue: Wholesale Can’t compose quality along the supply chain.
  90. 90. |90 New market role: Translocation assurance provider Answer…
  91. 91. |91 14/12/2014 | ©2014 Martin Geddes Consulting Ltd MEASURE QUALITY Measure & enforce The job of the ‘assurance’ provider
  92. 92. 1 2 3
  93. 93. It is time to consider new commercial and technical models 3
  94. 94. |94 Commercial approach
  95. 95. SET A PRICE FOR QUALITY High Standard Low
  96. 96. E164 NUMBERS •Your global trusted brand for quality assurance •You can’t control the media delivery… •…so focus on preserving value in the numbering and signalling
  97. 97. E164 NUMBERS •Your global trusted brand for quality assurance •You can’t control the media delivery… •…so focus on preserving value in the numbering and signalling
  98. 98. MARKET STRUCTURE MEDIA SIGNALLING IDENTITY The three basic jobs that get done in delivering phone calls
  99. 99. TODAY’S REVENUE MODEL MEDIA SIGNALLING IDENTITY Minutes No billing for unanswered calls No user charge for numbers
  100. 100. COST STRUCTURE MEDIA SIGNALLING IDENTITY Translocation costs Association costs Numbering costs
  101. 101. TODAY’S (RELATIVE) COSTS MEDIA SIGNALLING IDENTITY Falling fast Falling slowly/rising Fixed/rising
  102. 102. POSSIBLE FUTURE MODEL? MEDIA SIGNALLING IDENTITY Bill and keep Charge for unanswered or rejected calls Pigouvian tax
  103. 103. POSSIBLE FUTURE MODEL? MEDIA SIGNALLING IDENTITY Bill and keep Charge for unanswered or rejected calls Pigouvian tax Anti-spam
  104. 104. POSSIBLE FUTURE MODEL? MEDIA SIGNALLING IDENTITY Bill and keep Charge for unanswered or rejected calls Pigouvian tax
  105. 105. |105 14/12/2014 | ©2014 Martin Geddes Consulting Compensate for negative externalities What is a Pigouvian tax?
  106. 106. THREE REGULATORY QUALITY LEVELS Threshold Target Stretch
  107. 107. Basic conformance Threshold Target Stretch Lose number or license
  108. 108. Tax substandard services Threshold Target Stretch Pigouvian tax on numbering
  109. 109. Threshold Target Stretch No tax Tax substandard services
  110. 110. Drive market developments Threshold Target Stretch
  111. 111. STRETCH QUALITY TARGET USES 1.Criteria for license renewal and setting price of license. 2.Trade SMP for higher quality. 3.Encourage development of new markets.
  112. 112. STRETCH QUALITY TARGET USES 1.Criteria for license renewal and setting price of license. 2.Trade SMP for higher quality. 3.Encourage development of new markets. Significant market power
  113. 113. STRETCH QUALITY TARGET USES 1.Criteria for license renewal and setting price of license. 2.Trade SMP for higher quality. 3.Encourage development of new markets. Such as higher definition, WebRTC assurance, video.
  114. 114. Offer quality assured and unassured number ranges
  115. 115. SOLVE “NET NEUTRALITY” Fair and non-discriminatory pricing of quality is possible! (How? Ask me!)
  116. 116. Technical approach |116
  117. 117. Take control over the systemic performance hazards (as operators and their suppliers aren’t doing it)
  118. 118. FILL THE GAP IN STANDARDS FOR QUALITY •The ITU needs to step up! •Provide scientific and thought leadership •Create standards for composable quality metrics that are a strong QoE proxy
  119. 119. THREE LAYER POLYSERVICE MODEL Superior traffic costs more to deliver… so should attract a premium Economy Standard Superior Standard traffic is today’s off-peak Internet… but is consistently the same Economy traffic does not drive capacity upgrades
  120. 120. Cost of 80 hours of voice/month? 25¢ (translocation cost only, based on UK cost metrics)
  121. 121. SUMMARY 1.Move the money! Identity and assurance is where it will be. 2.Light touch on how services are delivered, but a strong grip on what quality. 3.Pro-consumer and pro-citizen policies that align with packet technical reality.
  122. 122. WANT TO LEARN MORE? THEN SIGN UP FOR MY NEWSLETTER FOLLOW ME ON TWITTER READ THE GEDDES THINK TANK
  123. 123. Thank you www.martingeddes.com mail@martingeddes.com

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