INSIGHT Tracey Wright - ITSPAs Industry Developments Group
“ITSPA finds It is worrying that there is currently no regulated alternative to TDM interconnects with BT, thus
encouraging further expansion on the old technology and keeping the industry further behind on migration
to an all-IP environment.” Tracy Wright, Chair of ITSPA’s Industry Developments Group
IP Interconnection – Why is it so vital?
As we transition to an all IP world, the future of interconnection is by no means certain. It’s vital that the
industry is aware of the potential issues that could lie ahead. Tracey Wright, Chair of ITSPAs Industry
Developments Group, explains
In the 2017 Narrowband
Market Review (NMR),
Ofcom determined that
there was insucient
migration to consider looking
at IP based interconnects for
the purposes of regulation.
However, they did indicate that
should the situation vary during
the review period they would
revisit this decision.
It has long since been ITSPA’s
opinion that sucient volumes
of trac are routing via BT’s IP
Exchange product to indicate
that an IP interconnect would
be welcomed by industry and,
for reasons listed below, we
believe it essential for the IP
interconnect to be regulated to
maintain the current clarity,
security and equal terms that
are aorded by the TDM
equivalent we have today.
ITSPA nds It is worrying
that there is currently no
regulated alternative to TDM
interconnects with BT, thus
encouraging further expansion
on the old technology and
keeping the industry further
behind on migration to an all-
IP environment. BT’s planned
21CN network, which had
intended to reduce the number
of Points of Interconnect
from over 600 down to 20,
has stalled. e result is
that the only alternative to
TDM expansion currently
is to become a customer of
BT’s IP Exchange product on
negotiated commercial terms.
We believe there is distortion
of the interconnect and
transit market as a result
of the migration of large
networks from regulated
TDM interconnects to BT’s IP
Exchange product.
Previous reviews have stated
that the requirement for BT to
oer a regulated interconnect
circuit is appropriate as without
it there would be no incentive
to provide interconnect on a
reasonable basis which would
then reduce the other remedies
in place for wholesale call
origination and wholesale
call termination. Regulated
interconnects facilitate
competition in downstream
markets by allowing other
providers to compete.
It would seem logical to
ensure the requirement is
technology agnostic going
forward. TDM was the
selected technology for
regulated interconnect during
the last review period as this
is the means by which most
customers were connected
to the network at that
stage. However, with BT
announcing its intention to
close down their part of the
Tracey Wright, Chair of ITSPA’s
Industry Developments Group
PSTN network by 2025 there
is already evidence of volumes
migrating at a rapid pace which
will increase as we edge closer
to the deadline.
As more and more trac
utilises the IP network, many
carrier partners are left with
only two options. e rst
is to pay hefty (unregulated)
transit charges to deliver or
collect trac to the BT network
and the second is to become
a customer of the BT IP
Exchange product and negotiate
commercial terms.
With larger networks being
in a position to negotiate more
attractive terms, some are
choosing to use the commercial
product due to the apparent
cost advantages, this in turn
increases the trac originating
on the IP Exchange platform
thus increasing call origination
and transit charges even further
for the remaining networks not
using IP Exchange.
With Ofcom deeming an
NGN network with 20 Points
of Interconnect ‘ecient’ for
the purposes of calculating
call costs, we believe that the
same calculations should be
used to for interconnect. By
encouraging IP interconnects
at far fewer than the 650 DLEs
(that are currently required to
gain xed termination rates)
we would see wider uptake of
interconnects, which in turn
would benet competition in
the transit market.
We propose that a
competitive and fair
environment that encourages
investment in new technologies,
as well as ensuring the purpose
of wholesale call termination
and origination regulated
pricing is maintained, requires a
simple solution:
BT to be required to oer
a regulated IP interconnect
alongside TDM interconnects
(until such a time that TDM
becomes unviable); And/or:
BT to be required to oer
regulated TDM interconnect
at fewer points to give access
to xed termination rates with
less unnecessary infrastructure
investment.
Transit market to be reviewed
and, should Ofcom agree that
BT once again have SMP in this
market, regulate the rates.
With the wholesale cost of
calls constantly increasing
as a result of network
infrastructure choices, as an
industry we must commit
to nding solutions that
create an environment where
competition is encouraged. As
a result, consumers will benet
from savings as well as new
technologies and innovation.
16 | Comms Business Magazine | August 2020 www.commsbusiness.co.uk
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