VoIP As Comcast Sees it. Richard R. Rick Wolfe Director, Regulatory Affairs Telephony Midwest Division. February 19, 2004

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1 VoIP As Comcast Sees it Richard R. Rick Wolfe Director, Regulatory Affairs Telephony Midwest Division February 19, 2004 Voice Overview Types of Traditional Voice Traditional Circuit Switched Telephony (Local Bell Co.) Local copper loops Class 5 local switch PSTN interconnection Network switch hierarchy 99% of Homes are on this type of network Traditional Cable HFC Coax local loops [HDT/NIU termination] Use 6 MHz channel to deliver voice ( steal a channel) Class 5 switching maps to ILEC PSTN Interconnect 1% of Homes are on this type of network 2

2 Voice Overview Other Types of Voice Computer to Computer Internet Voice Calls (example - Pulver) No switching No use of PSTN Internet Phone - LD/International Arbitrage (example Vonage, 8X8) Rides 100% on another carrier s network Reaches the PSTN through 3d party carriers Voice treated as data over the public Internet No QoS [Quality of Service] and no ability to set QoS Compliance with NANP, E-911, CALEA questionable VoIP (PacketCable) in the Loop MTA at the home; CMTS interface to a class 5 switch Comcast has a limited deployment in Detroit market 3 Comcast s Preferred Type of Voice Packet Cable Voice What it is! Spec designed by Cable labs that uses data packets to transmit voice for cable based VoIP Facilities based architecture that supports primary line telephony Quality of Service (QoS) to ensure priority for voice Supports (and requires) new components and new capabilities (emta, CMS, GW etc) It offers new capabilities while maintaining interoperability (e.g. interconnection) with 100% of other phones in the world What it isn t! It does not use the Internet It does not use the ILEC for the local loop It does not use conventional circuit switches It does not require the PSTN to enable a voice conversation It does not require a switch in each local market It is not proprietary 4

3 How does it differ from Internet Phone? It has priority Quality-of-Service It is designed to be more secure It will support E-911, Operator, Directory & CALEA It will allow use of conventional telephones It will support use of NANP telephone numbers It will support most features offered by ILEC It is designed to Telcordia performance metrics It is designed to be reliable and available 5 What does it take to do Comcast s VoIP? Network Interconnect Back Office Operations Distribution Plant upgrade Ongoing Plant Rf maintenance and procedures RAN Support for Voice VoIP Elements (CMS, GW, CMTS 1.1) PSTN Connectivity 3rd party services (e911, LNP, DL, CNAM) Numbering administration CALEA (wire tapping) Peering (Future) Service Delivery including ordering, provisioning activities Order / Billing / Usage / Web / Provisioning tools and systems Service Assurance systems and tools Service Assurance Service Delivery Network Provisioning and maintenance

4 voice path Traditional Telco v. IP Phone Architecture Cl. 5 Cl. 5 Cl. 5 Tandem Cl 4 Switch Tandem Cl 4 Switch Cl. 5 Cl. 5 SS7 Cl. 5 Originating Caller IXC Terminating Party Traditional Telco PacketCable VoIP MTA Edge Head-End GigE CMTS CMTS Docsis Docsis L2/L3 Router Primary Market Headend L2/L3 Router MSO VoIP SoftSwitch Another MSO or VoIP Provider PSTN Meet-Point Bell Tandem Switches Cable HFC Docsis 1.1 Required SS7 PSTN Long Distance Providers 7 Review Service Uses IP? Uses Internet? Circuit Telephony NO NO HFC Cable Telephony NO NO IP In The Loop YES NO Computer to Computer Phone Internet Phone YES YES YES YES PacketCable VoIP YES NO 8

5 Why is Comcast Interested in VoIP? Voice can be attractive for a facilities-based, consumer-focused communications operator Incremental revenue Packaging ( bundle ) is beneficial to customers and to Comcast Positive impact on churn Incremental and efficient use of plant and infrastructure Platform for future services web ready integration Equipment mgf. s are all emphasizing VoIP development Lower network cost than circuit based telephony If, Costs Are Minimized Minimize barriers to entry Minimize cost of regulation Minimize cost of operations 9 Comcast s PacketCable VoIP Product(s) Residential primary line product Local / long distance / features bundle Interface with CPE and existing wiring Meets PacketCable QofS, NANP specs and reqs Battery powered back-up Satisfies Public Service obligations IP=Internet Protocol 10

6 NCTA VoIP White Paper February 2004 Balancing Responsibilities and Rights: A Regulatory Model for Facilities-Based VoIP Competition 11 NCTA Paper Comcast is proud to support NCTA and cooperated in the production of this White Paper. As a White Paper, it cannot cover every regulatory nuance in every jurisdiction and must remain general on some topics. However, the White Paper does provide useful ideas and is an excellent starting place for discussion and positive change. 12

7 Overview Background Terms What is VoIP? Regulation of VoIP IP Phone Deployment VoIP Provider Responsibilities VoIP Provider Rights Regulatory Recommendation Conclusion 13 Background - Terms IP stands for Internet Protocol it is the technique by which information [data, pictures, music, voice, etc.] is digitized into a format suitable for transport on an IP-based network. VoIP stands for Voice over Internet Protocol it is a description of the process for digitizing sound / a voice message using the IP technique or format. Note that the description of the term VoIP does not include a requirement that the digitized voice travel over the public Internet. PacketCable is an industry developed specification that serves as the rules of the road for cable systems using a digital delivery system instead of an analog transmission system. DOCSIS stands for Data Over Cable System Interface Specification a digital cable specification subsystem, one part of the overall PacketCable plan, that deals with the management of high speed data. 14

8 What is VoIP? VoIP in and of itself is not a service it is a term used to describe the application of IP based digital technology to transmit voice over a digital network. Today, VoIP simulates ordinary residential telephony, but in the future, VoIP will be used in combination with advanced messaging and video techniques to create valuable new services, of which voice communications will only be a part. VoIP is one of many terms that may be too narrowly communicated in the press or in literature when discussing these new services in fact, lack of standardization of terms is part of the debate itself. 15 Regulation of VoIP Much of telephony regulation was premised upon dominant, monopoly providers in the marketplace. With the introduction of a robust full-featured, facilities-based competitor, the need for regulation in many areas is reduced or eliminated because the market will discipline new entrants. This market discipline renders inappropriate legacy utility requirements including (as examples): Complicated or burdensome billing, credit, and collection rules Unnecessary service and installation metrics Equal access when products are bundled Tariffs (which may be voluntary) 16

9 Regulation of VoIP A baseline test is proposed for IP service; as determined by the service itself if it has all of the four following characteristics, it qualifies for some form of regulation: Uses telephone numbers or numbering resources, Enables calls to or from subscribers to non-voip telephone services, Can be used to replace ordinary telephone service, and Uses IP technology in the communications path for a call. Note that use of the public Internet does not impact regulatory treatment under the baseline test. 17 Regulation of VoIP Services where voice communications are only incidental to the service (ex., interactive gaming with voice enhancement) and otherwise do not meet the baseline test, should not be regulated. Services that do not include IP technology in the network are not addressed in the White Paper. While it may be warranted to subject services that do not meet the baseline test to regulation as relates to law enforcement (CALEA, for example), this requirement does not mean that they should also be subject to traditional telephony regulation. 18

10 Regulation of VoIP Policymakers should not focus on preexisting labels (ex. Title I or II) when seeking direction for the level and type of regulation for VoIP services. Focus instead on the necessary rights and responsibilities appropriate to new services proposed by competitive entrants. Regulations designed for legacy, monopoly-provided phone service clearly should not apply. 19 Responsibilities Providers of services meeting the four-prong baseline test should assume, as examples, the following responsibilities with respect to those services: CALEA law enforcement 911/E911 [funding obligations and liability limitations apply] Sec. 255 / disabled consumers and state TRS USF [VoIP services that use the NANP should contribute. However, comprehensive reform of USF policies must be undertaken a numbers based approach is suggested for funding allocation] Intercarrier Compensation [also requires reform] Consumer protection [ex. Do Not Call] 20

11 Rights Providers of services meeting the four-prong baseline test must enjoy, as examples, the following affirmative rights with respect to those services: Efficient interconnection and traffic peering (IP and PSTN) Securing new telephone numbers, porting, and directory listings All underlying rights necessary to meet 911/E911 responsibilities Fair compensation for traffic exchange Non-discriminatory access to USF support Non-discriminatory access to poles, rights of way, and other access at appropriate rates 21 Regulatory Landscape Today, the regulatory landscape for VoIP services is uncertain: Federal Government / FCC have, to date, suggested a hands off approach to VoIP regulation Some forms of VoIP services exist today with little or no regulation VoIP services face the prospect of new, costly, inconsistent or even conflicting regulation by state and local governments Congress, the FCC, state government, state regulators, and local governments need to adopt a consistent and coordinated approach that will encourage facilities-based VoIP services. 22

12 Regulatory Recommendation History has shown that regulatory restraint can stimulate innovation and competition. Conversely, excessive regulation will impede full, robust, and timely VoIP deployment. Federal law and the FCC s decisions largely support regulatory restraint. State consistency with federal precedent is vital, as is coordination. 23 Conclusion VoIP is an attractive technology to cable operators because it allows them to offer traditional voice telephony services (and, in the future, advanced features) less expensively than using traditional analog (older technology) circuit equipment. However, VoIP will not reach its full potential to deliver robust facilities-based residential competitive services without regulatory certainty and the application of the minimal amount of regulations necessary to promote the services. 24

13 - Thank You - 25