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.

1. CIRCUITS TO PACKETS
ITU Telecom World Doha, 7th December 2014
MARTIN GEDDES FOUNDER & PRINCIPAL MARTIN GEDDES CONSULTING LTD
With annotations

2. What is this presentation about?

3. Packets can mean voice quality problems
1

4. Regulators have a role in managing quality
2

5. It is time to consider new commercial and technical models
3

6. 1
2
3

7. Packets can mean quality problems
1

8. |8
Phone calls: basic facts

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
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
Low data volume
Everyone knows that voice doesn’t use much ‘bandwidth’, but that isn’t really the issue.

12. |12
High quality need

13. |13
14/12/2014 | ©2014 Martin Geddes Consulting Every application, including voice, has a ‘budget’ for quality.

14. Time
One part of the ‘budget’ is the end-to-end packet delay

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
Circuits
In the world of circuits, we reserve capacity for individual calls.

17. TDM circuits…
(Time Division Multiplexing)

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. …to packet-based statistical multiplexing

20. MORE DEMANDS ON OUR ‘TIME BUDGET’
2G, 3G, 4G
OTT
WiFi

21. |21
14/12/2014 | ©2014 Martin Geddes Consulting Packet world
More Variability

22. |22
So why use packets?

23. |23
Money is the answer, what is your question?
— Richard Shockey



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. 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. 14/12/2014
26
Waiting time
This comes at a price: more waiting and variability.

27. |27
Examples of performance problems

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.  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
IPX
These are not isolated issues, but are endemic to our industry. Consider the standard for quality-managed packet voice, IPX.

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. IPX performance and cost issues
Why? Media and signalling are joined, which forces traffic the “long way”
?

33. Session Border Controllers

34. |34
De-jittering
De-jitter at every boundary
Because circuits have zero variability, we locally optimise to “low variability”.

35. |35
This creates the maximum possible total packet delay.

36. |36
Result? Quality budget is used up

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
Unmanaged performance hazards Why? No schedulability limits in CAC.
(and every other UC vendor)

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
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
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
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
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
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
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
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
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
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
DSL
Lack of service continuity
Why? ADSL – 30 sec retrain outages
VDSL – frequent short retrains

50. |50
DSL
Lack of service continuity
Why? ADSL – 30 sec retrain outages
VDSL – frequent short retrains

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
Why all these problems?

53. We’re trying to build network skyscrapers…

54. But we’re in the “digital medieval” period; the science isn’t yet ready.

55. Result? Failure under load

56. Statistical sharing = Variability

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. 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
Why? Circuit thinking! “Monoservice fallacy” The mistaken belief that capacity and schedulability are the same thing.

60. |60
Two very common basic technical errors:  More capacity solves schedulability problems.  Average measures are what matter.

61. |61
Two very common basic technical errors:  More capacity solves schedulability problems.  Average measures are what matter.

62. |62
Two very common basic technical errors:  More capacity solves schedulability problems.  Average measures are what matter.

63. |63
IMS manages capacity constraints not schedulability constraints
You might want to ask for your money back.

64. |64
This will get worse! SDN/NFV create more variability and aggregate failures.

65. |65
Current regulatory framework has no concept of schedulability

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. 1
2
3

68. Regulators have a role in managing quality
2

69. Future packet voice dystopia

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
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
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
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
Economic crisis in voice market! Costs can’t drop (due to market size and overheads) but prices can!

75. |75
The OTT quality arbitrage is finite
So OTT can’t take up the slack

76. Future packet voice utopia

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
Sustainable growth New revenue Quality floor and price floor established Wide range of assured services Lower costs Decreased requirement to buy equipment

79. THE BIG QUESTION!
How to get trustworthy services, that are affordable, and enable innovation?

80. |80
So, what to do?

81. |81
Understand packets! “Translocation as a Service” (with contention) vs Circuit fragment (without contention)
Need to understand what the packet service is!

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. 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. 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. 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. 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
Issue: Retail Numbering does not impose a quality requirement.

88. |88
Outcome-oriented policies (not tied to implementation mechanisms)
Answer…

89. |89
Issue: Wholesale Can’t compose quality along the supply chain.

90. |90
New market role: Translocation assurance provider
Answer…

91. |91
14/12/2014 | ©2014 Martin Geddes Consulting Ltd
MEASURE QUALITY
Measure & enforce
The job of the ‘assurance’ provider

92. 1
2
3

93. It is time to consider new commercial and technical models
3

94. |94
Commercial approach

95. SET A PRICE FOR QUALITY
High
Standard
Low

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. 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. MARKET STRUCTURE
MEDIA
SIGNALLING
IDENTITY
The three basic jobs that get done in delivering phone calls

99. TODAY’S REVENUE MODEL
MEDIA
SIGNALLING
IDENTITY
Minutes
No billing for unanswered calls
No user charge for numbers

100. COST STRUCTURE
MEDIA
SIGNALLING
IDENTITY
Translocation costs
Association costs
Numbering costs

101. TODAY’S (RELATIVE) COSTS
MEDIA
SIGNALLING
IDENTITY
Falling fast
Falling slowly/rising
Fixed/rising

102. POSSIBLE FUTURE MODEL?
MEDIA
SIGNALLING
IDENTITY
Bill and keep
Charge for unanswered or rejected calls
Pigouvian tax

103. POSSIBLE FUTURE MODEL?
MEDIA
SIGNALLING
IDENTITY
Bill and keep
Charge for unanswered or rejected calls
Pigouvian tax
Anti-spam

104. POSSIBLE FUTURE MODEL?
MEDIA
SIGNALLING
IDENTITY
Bill and keep
Charge for unanswered or rejected calls
Pigouvian tax

105. |105
14/12/2014 | ©2014 Martin Geddes Consulting Compensate for negative externalities
What is a Pigouvian tax?

106. THREE REGULATORY QUALITY LEVELS
Threshold
Target
Stretch

107. Basic conformance
Threshold
Target
Stretch
Lose number or license

108. Tax substandard services
Threshold
Target
Stretch
Pigouvian tax on numbering

109. Threshold
Target
Stretch
No tax
Tax substandard services

110. Drive market developments
Threshold
Target
Stretch

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. 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. 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. Offer quality assured and unassured number ranges

115. SOLVE “NET NEUTRALITY”
Fair and non-discriminatory pricing of quality is possible!
(How? Ask me!)

116. Technical approach
|116

117. Take control over the systemic performance hazards
(as operators and their suppliers aren’t doing it)

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. 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. Cost of 80 hours of voice/month?
25¢
(translocation cost only, based on UK cost metrics)

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.

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123. Thank you www.martingeddes.com mail@martingeddes.com