Meeting The IP Network Billing Challenge
BY LIMOR SCHWEIZER
Anyone who pays an ordinary telephone bill is familiar with usage-based billing. There is a flat rate for local service. Long-distance charges are based on the length of the call and distance. Some calls are discounted, and there are surcharges for special applications such as call waiting or voice mail.
Internet billing today is another story entirely - typically $20.00 a month in the U.S., whether the subscriber is on the Internet all day, every day, or only uses it for a few hours. The subscriber pays one flat fee, whether transmitting files, sending email, or downloading streaming video. Network Service Providers (NSPs) have been unable to do usage-based billing because until very recently there was no way to provide a Customer Care and Billing (CCB) system with information about customers' actual network usage. And the flat fee discourages innovation, since "time on line" is not sufficient or meaningful when it comes to pricing and billing value-added services such as voice and video that require a specified Quality of Service (QoS).
This situation is poised to change, as carriers add IP networking to their traditional telephone service offerings and as the number of Competitive Local Exchange Carriers (CLECs) in the U.S. reaches critical mass. These providers need a system that will make it profitable to create a variety of differentiated IP (Internet Protocol) services, enable them to capture information on customers' use of these services, and pass the information on to their CCB system to generate bills. As NSPs merge telephone offerings and IP services with cable and wireless services, the need for such a system becomes even more acute.
In the past few months, a new type of multi-source, multi-layer IP mediation system has emerged that makes it possible to capture IP network activity and generate IP Service Detail Records (SDRs) that are similar to telephony's Call Detail Records (CDRs). Such SDRs, which can be fed to the existing CCB system to generate bills, are essential to create new IP services and price and bill for them on a usage basis.
Indeed, IP mediation will become a powerful driver in the CCB market. Cowan & Co. (January 1998) predicted the CCB market will grow to $8 billion by the year 2000. Fueling this growth is the fact that IP is emerging as the primary data communication protocol and the Internet is becoming a global data exchange medium for services such as Internet telephony.
Creating Differentiated IP Services
Once NSPs can track IP usage, it becomes possible to create and bill appropriately for a variety of QoS-dependent, value-added IP services contexts such as Web access, file transfer, Internet telephony, and video.
IP mediation, for example, allows an NSP to differentiate between Web activity going directly to external networks and Web activity going through a Web proxy, and thus charge a higher rate for direct traffic. This will encourage users to use the proxy and thus help reduce overall inter-carrier traffic expenses.
Or NSPs may wish to levy a lower price for IP voice calls that employ the H.323 standard for IP telephony call setup, since H.323 is a more cost-effective way of provisioning calls than directly peering Internet telephony calls.
IP mediation also lets NSPs charge a higher price for prime-time network usage than for off-peak usage.
NSPs can use IP mediation to charge neighboring NSPs for transactions they initiate. An IP telephone call that is generated at NSP A, passes through NSP B, and terminates at NSP C, can generate a series of inter-NSP charge-backs to NSP A, where the call originated.
Information Everywhere
To bill appropriately for such applications, the IP mediation system must collect information on IP usage events from throughout the network. Only the time of the call and its end points are measured in telephone switch networks; in IP networks the situation is much more complex. Users consume many different network resources simultaneously, for longer periods of time, and usage is measured not only by time and distance but by QoS metrics such as bandwidth, network latency, and jitter.
The fact, that there are no standards for IP accounting, and metering increases the difficulty of IP mediation. In a typical IP network, a multitude of elements terminate or mediate traffic, including routers, switching hubs, firewalls, Web servers, name and directory servers, and more. The IP mediation system must contact all of these devices and extract their transaction records.
Even associating a user with an IP address is difficult. IP addresses are assigned to dial-up customers dynamically, forcing the IP mediation system to collect information in real-time. In addition, the Domain Name Service (DNS), an Internet distributed database, changes the association of IP address and host names daily. And DHCP, a protocol that allows a computer to be plugged into an IP network and get an unused IP address, also makes it hard to identify a computer or its owner based on the IP address alone.
Network devices in a typical NSP may generate millions of transaction records per hour, and the amount of data an IP mediation system needs to capture may be an order of magnitude higher than at some national telephony carriers. Different devices may record the same event, so the IP mediation system needs to recognize and eliminate duplicate records. Finally, the IP mediation system has to distinguish between raw accounting records belonging to different 'products' - say Internet telephony and high-speed Internet access - and treat them differently.
A Multisource, Multistep Process
An IP mediation system accesses all of this real-time information via software modules that run on hosts located near the network elements. The system normalizes this information, correlates records from different devices, and creates a Service Detail Record (SDR) that is analogous to a Call Detail Record (CDR) (Figure 1). During enhancement, SDRs may be filtered and aggregated based on a centralized policy. For example, if a router handles internal NSP traffic as well as customer traffic, the IP mediation system can filter out records for the unbillable NSP traffic.
Data enhancement and aggregation is important, since using long-distance lines to send raw data about billable events from network devices to a central database is costly and consumes expensive network resources. The most efficient IP mediation solutions store granular information in distributed databases and send aggregated records to a CCB (Figure 2).
An IP mediation system can also identify duplicate records in real-time and merge them into a single SDR. Merging is useful when more than one information source - for example, a Web proxy/cache and a router - provides information on the same event and prevents double billing.
Ideally, an IP mediation system has a seamless two-way interface to the CCB, not only sending information up to the CCB but also sending information downstream to devices. This enables the CCB to provision the IP network for service activation and allows pre-payment contracts and differentiated service levels for QoS, security, and accountability.
IP Mediation in the Converged Environment
An IP mediation system is ideally suited for billing converged network services such as video on demand or Internet telephony. For the first time, NSPs can collect relevant information from all network elements - wherever they are located - aggregate that information into SDRs, forward it to their existing CCB system, and bill the customer appropriately for each transaction.
This capability will have a powerful effect on the market. Without IP mediation, NSPs have little incentive for creating new services or implementing QoS guarantees. And there is little incentive for customers to pay a premium for such services if they do not receive a detailed, accurate bill. IP mediation thus opens the way for the creation of powerful new applications that bring new revenue opportunities to NSPs.
Limor Schweitzer is a co-founder of XACCT Technologies and serves as the chief technical officer of the company. Prior to founding XACCT, Limor co-founded Xpert UNIX Systems (a provider of global networking solutions, specializing in network billing and accounting, network security, software development and systems integration), where he was the vice president of research and development. Schweitzer can be reached via email at limor@xacct.com.
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Figure 1. A network event triggers a record flow in a router. The record, which contains low-level, IP-related information such as IP addresses, port numbers, and number of packets, is captured by the IP mediation system. The system searches the QoS policy server to find if the transaction had a reserved QoS, then associates an Internet geography - based on source and destination IP addresses - to the record by consulting the network management database and peering network. A user name may be associated to the transaction by correlating the IP address with RADIUS accounting logs. The system then looks up the user name in the LDAP server to identify the service contract type that may affect the type of correlation performed on the record flow. Finally, an SDR is sent to the CCB for accounting and billing.
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Figure 2. This NSP network has POPs in New York, Boston, and Atlanta. The IP mediation system works in all three subnets, collecting, filtering, and aggregating billable usage records. Detailed accounting records are stored locally; only aggregated SDRs are transmitted to New York, where the billing database and CCB are located.