Telepocalypse

Bill and weep

Many readers are likely to be unaware of an impending change in the US in the way carriers settle for internetworking. The traditional solution has been for payments to be made to the party terminating the call by the party that initiated it (who is collecting the money from you for making the call). The future approach is called "bill and keep", where no such settlements are make. It certainly cuts down on a lot of bookkeeping, and eliminates the shenanigans to bypass the rules. Of course, some are inevitibly disadvantaged by any change to the status quo:

A much-anticipated industry proposal to eliminate access charges and move to a bill-and-keep accounting system calls for a four-year transition period that would begin in July 2005, according to telecom analyst Andy Regitsky, president of Regitsky & Associates.

...

Specifically, Regitsky noted that rural ILECs and state commissions would resist a bill-and-keep regime. Rural carriers depend heavily on access charges and would require significant changes to the universal-service funding program to remain revenue neutral—a task that would be "virtually impossible" for the FCC to accomplish when the subsidy fund is strained financially, Regitsky said.

So that'll keep the lawyers in work for a while.

There also will be significant network issues that have to be resolved, such as determining where calls are handed off and how to compensate a transporting carrier that neither originates nor terminates the call, Regitsky said.

Seems like the IT department and billing folks will be kept busy too.

I just dread to think how many working lives are currently being wasted arguing over how to divide up the carcass of a dying product. And as the Aral Sea of traditional telephony dries up, the lawyer sharks will occupy an every larger proportion of the revenue pool, fighting over the ever-diminishing puddles of money. I don't know who will make the last PSTN phone call and when, but I bet the revenue from it goes straight into the political favours system.

Somewhat paradoxically, the phone industry in the UK (and most of Europe) is heading in the direct opposite direction. The pattern there is that there is a high premium paid to terminate a call to a mobile network. So the lack of VoIP competition on wireless for the next few years means fat termination charges, and regulators breating down carrier necks to lower them. For wireline operators, it's more like "bill and keep nothing", as the wireless operators screw them over.

The name "internet" might drop a modest hint that there is a bit of internetworking going on elsewhere in the communications industry. There is no RFC titled "how to pay for interconnect", and with good reason. It's like another axis of the end-to-end principle. Not only should the network be dumb as possible, but it should say as little as possible about how to make dollars flow in the opposite direction to the bits. In that way capitalistic evolution ensures only feasible and sustainable interconnect settlement models emerge, at both the connectivity and application layers.