Download Cisco Billing Architecture & Strategy

Charging and Paying for Next
Generation Services
An Overview of Billing
David M. Piscitello
Core Competence, Inc.
dave@corecom.com
Copyright 1998 Core Competence, Inc.
The Market
Copyright 1998 Core Competence, Inc.
Internet Services Market
It’s growing, but
is it profitable?
permission to reproduce courtesy of eStats
Copyright 1998 Core Competence, Inc.
The New Telephony World?
Competition for POTS
Timetable for VOIP
Reasons for Considering VOIP
– Voice over Networks
2%
11%
(VON)
VOIP to remote
11%
49%
office
– Voice over IP
N/A
(ITU-T H.323)
VOIP to Desktop
2+ years
– Immature, but
27%
– not to be ignored
1-2 years
VOIP replaces
TDM intra PBX
Who will use it?
Adopt integrated data & voice applications
lines
This year Reduce Toll charges
Where?
Reduce cable plant costs
VOIP replaces
When?
PSTN/WATS
0Reduce staff
20
40
60
Other
Copyright 1998 Core Competence, Inc.
Evolving Access Markets
• T1 bandwidth no longer
sufficient for enterprise
• Residential broadband
access will dramatically
change consumer and
small business utilization
Source: Yankee Group
Copyright 1998 Core Competence, Inc.
Not if SP’s want to
stay in business...
Service Providers must reflect
the cost of operations in
billing and rating…
Copyright 1998 Core Competence, Inc.
Fixed fee pricing is common
today, but for how long?
• Flat rate fee increases
(MSN)
• New rate plans & incentives
(AT&T)
• Tiered services plans
(AT&T, AOL)
• Companion plans
(MCI)
Cross-elasticity issues!
Promising markets beget competition
SPs face broad competition in many forms
– other SP’s (like you)
– multiservices SP’s
– your customers
What should you do when someone tries to
steal your lunch?
 protect it
 look to eat someone else’s
Copyright 1998 Core Competence, Inc.
SPs will offer differentiated services:
(protect your lunch)
Differentiate services on existing infrastructure to
– provide significant new revenue streams
– retain customers (satisfied customers don’t switch)
Examples:
–
–
–
–
–
IP VPNs
Dial IP VPNs
Guaranteed bandwidth
Intranet and Extranet hosting
Management and security outsourcing
Copyright 1998 Core Competence, Inc.
SP’s will Expand and Diversify:
(steal someone else’s lunch)
SP’s need new revenue opportunities,
so they will enter new markets
Strategies:
– leverage existing infrastructure to provide new services
• ISP offers Voice over IP
• Frame Relay, ATM provider offers VON
• LEC offers DSL
– expand infrastructure and (in parallel) service portfolio
• introduce ATM into backbone and edge
• offer ATM VC’s, transparent LAN services
Copyright 1998 Core Competence, Inc.
The Cost of Differentiation
A willingness-to-pay for differentiated services exists
– Level 2 CIR, VANs, VPNs
– Voice Feature Groups (Follow Me Roaming, MCI One)
SP’s must be able to account for service provided to
– customers, regulators, policy makers
– SP partners (e.g., settlements)
But… SP’s require tools to
– deliver differentiated services and
– demonstrate that a service is indeed
“differentiated”
Copyright 1998 Core Competence, Inc.
Role of Billing in SP Networks
Copyright 1998 Core Competence, Inc.
Billing Is A Differentiated Service
Billing is a service
– service based on knowledge of network utilization
– apply this knowledge to identify price-quantity
relationships that satisfy broadest range of user needs
Accounting information (usage detail) is required to
–
–
–
–
prove the service provided meets or exceeds SLA
demonstrate value (premium surcharge is justified)
compute usage-sensitive bills
innovate ...
Copyright 1998 Core Competence, Inc.
Why Usage Detail is Important
Usage Detail reveals:
Internet
Who is using the network?
How much bandwidth is being
used?
Telecommuter
What the network being
used for?
The cost associated with this
usage?
Copyright 1998 Core Competence, Inc.
Network
Mobile
User
Remote/Branch
Offices
How SP’s will apply Usage Detail
Balance traffic patterns by providing
incentives for off-peak traffic
Pin-point revenue opportunities
Identify and control network costs
Differentiate service
Charge based on consumption
rather than assumptions
Copyright 1998 Core Competence, Inc.
SP Requirements for Usage Detail
Characteristics that service providers seek in
accounting systems include:
– Very high accuracy/integrity
– Very high detail
– Readily auditable
– Persistent data store (corollary to accuracy)
Copyright 1998 Core Competence, Inc.
Components of SP Billing Systems
Depending on whom you ask, SP’s need:
–
–
–
–
–
–
–
Usage collection, mediation, (cross-)correlation
Service creation and provisioning
Authentication and authorization
Pricing and rating engines
Billing and payment processing
Customer Care
Activity Tracking
Copyright 1998 Core Competence, Inc.
Billing Models for:
Internet-based services
ISPs want same flexibility for IP as telcos have for POTS
SPs will offer tiered rate packages
Goal is to combine billing elements
–
–
–
–
Flat rate: all-you-can-eat access is necessary, not sufficient
Time: duration, time-of-day, day-of-week
Usage-sensitive: traffic/hit counts, excessive use surcharge
Destination-, Distance-, and Carrier-info: settlements
– Class of Service: access speed, user priority, by traffic type
And apply them across their service offerings:
– IP Telephony, Fax over IP, Internet Dial, Dedicated
Access, Hosting, outsourced security and
management
Copyright 1998 Core Competence, Inc.
Billing Models for:
Layer 2 Services
SPs already have “circuit” billing models, will
innovate for SVC billing:
– Flat rate
• dedicated port or PVC, unattractive option for SVCs
– Time-based
• duration of SVC, time-of-day, day-of-week
– Usage-sensitive
• metered traffic, surcharge for excess volume
– QoS-based
• prioritize by port/VC, ATM ABR/CBR/VBR/UBR, FR CIR
Copyright 1998 Core Competence, Inc.
Next Generation Billing Systems
Copyright 1998 Core Competence, Inc.
Traditional Telephony Billing Model
Data
Generation
CO equipment
(network elements)
Data
Aggregation
Mediation
Correlation
Call detail
records in
AMA format
RAO
Processing
CO equipment
(Switching SS’s,
adjunct processors)
– Network elements perform usage measurement collection
and accounting record generation
– Supervisory systems and adjunct processors perform usage
measurement aggregation, mediation, and correlation
– Call detail records sent to RAO for processing (rating,
discounting, tariffing, crediting and debiting, and invoicing)
Many SPs seek to map traditional 3-tiered telephony
billing model...
Copyright 1998 Core Competence, Inc.
Internet Billing Architecture
… onto access, routing, and switching solutions for providing
–
–
–
–
Dedicated IP VPNs
Dial IP VPNs
“Voice over …” services
Layer 2 services
– hosting and outsourced services (web, security, gaming, etc.)
Billing
Systems
Usage Data
CopyrightGeneration
1998 Core Competence, Inc.
Accounting Mediation
Typical Components of an
Internet Billing Architecture
Services:
Collection Protocols:
Layer 3:
Data,
VoIP,
Stream
Web-Enabled
Clients
Open Interfaces:
SQL
AMATPS
APIs
Billing and
Customer care
systems
Raw & Aggregated
Accounting Data
Layer 2:
Data,
VON
Cross-Layer
Correlation
Aggregation
Mediation
Layer 3:
Dial
Access
Tier 3
Hosting,
Mgmt,
Security,
Leasing
Network
Elements
Provide
Services
Copyright 1998 Core Competence, Inc.
Tier 1
Customer OSS’s
Data Collectors:
Tier 2
Likely SP Billing Strategy
Begin with traditional approach
– uni-directional flow of usage detail to Internet-RAO
for bill processing
Enable billing across services
–
–
–
–
access services
application services
outsourced services
leasing services
Evolve
– Develop interactive billing methodologies
Copyright 1998 Core Competence, Inc.
Holy Grail: Convergent Billing
Convergent billing
– integrate billing for multiple products and services
onto the same consumer invoice
– support invoicing, discounting, reporting
– track invoices and accounts receivables,
collections, etc.
Copyright 1998 Core Competence, Inc.
Inhibitors & Enablers
Copyright 1998 Core Competence, Inc.
Challenges to deploying Billing:
Accuracy, Completeness
Statistical averaging to estimate usage
– fraught with problems as basis for billing
• “who’s sampling what and when” affects averages
– considered inadequate for settlements
Provisioning info and customer data
– may not be available for all services
Completeness
– every element may not be monitored
– new (unmonitored) elements may be added
Granularity
– increasing detail further impedes reliability/scalability
Copyright 1998 Core Competence, Inc.
Challenges to deploying Billing:
Integrity and Availability
Is there sufficient protection against
modification of billing data
– in transit?
– when stored at Tier 2?
– when supplied to Tier 3?
Availability can be an issue
– Batch mode collection prevents real-time access
– Persistence of stored data can be a challenge
• managing large volumes of data
• regulatory requirements
Copyright 1998 Core Competence, Inc.
Challenges to deploying Billing:
Scalability
Data model
– SVCs and voice are short duration/high volume
– taxes tier 1 and tier 2
Call model
– forcing IP and VoIP into call model may not scale
Scale model
– must scale not just to large routers and switches, but
on the order of many, many CO’s and POP’s
Copyright 1998 Core Competence, Inc.
Provisioning As A Billing Enabler
SP’s will complement billing strategy with
directory (LDAP) services for provisioning
– intelligent networks, policy based management
– provisioning on per-user, per application basis
Service order entry and customer profile update
will become an end-user activity
– reduce customer care costs
– “instantaneous” service activation and change
Rapid provisioning must have a “near real time”
impact on billing...
Copyright 1998 Core Competence, Inc.
Old Style Provisioning Model
Order
Desk
DNS
files
Mail
Servers
DHCP
file
RADIUS
Server
Today, provisioning
is hampered by
• separate
• parallel
• ad hoc
• unidirectional
workflows
No common data repository
Copyright 1998 Core Competence, Inc.
DHCP
Server
RADIUS
Proxy
Terminal
Server
Mail
Config
DNS
Servers
Circuit
Orders
Telco
OSS
Equip.
Orders
Vendors
New Style Provisioning Model
User
Webform
Family
Webform
Web
Server
Intranet
Webform
Directory
...
Database
Directory is common thread, repository
for provisioning data that enables billing
Copyright 1998 Core Competence, Inc.
Owned
Facilities
Purchased
Facilities
DNS
Servers
DNS
Servers
DHCP/
Radius
Servers
DHCP/
Radius
Servers
Terminal
Server
Mail
Server
ATM
Switches
Directory
Termina
l
Server
Mail
Server
ATM
Switches
Parting Comments
Era of “Free” Internet is ancient history
“All you can eat” Internet Era coming to an end
Era of “Usage-based” Internet begins
Considerable investment re-tooling,
re-engineering, and new thinking
Copyright 1998 Core Competence, Inc.