4.5 Interconnection Pricing for VoIP

As network operators migrate to next generation networks, voice services will become simply a software application riding over the network. Converging technologies and markets make conventional approaches to interconnection charging unsustainable.

Many technology forecasters predict that in the future voice telephony will migrate completely from circuit switched telephony to VoIP. Once this happens, Internet interconnection and pricing models may replace the current arrangements. In the interim, VoIP network operators will need to interconnect with incumbent network operators’ PSTNs. This section addresses:

• The differences in cost recovery between the Internet and conventional telephony,
• Interconnection models by Internet Service Providers (ISPs), namely peering and transit,
• Implications of VoIP for interconnection pricing,
• Pricing mechanisms for VoIP interconnection, and
• Criteria for a new interconnection pricing regime.

RELATED INFORMATION

About the Internet
About VoIP
Arbitrage Opportunities in the ICT Sector
VoIP and Regulation
VoIP Over Wireless Networks
Benchmarking Rates for Network Access