“This is both to protect the huge investment companies like Global Crossing have made in building interconnects into existing branch networks over time but also to ensure continuity of high quality service to our customers.
The impact will differ in each case and is distance and element-related. In particular, it depends on the distance the call is transported over the BT network and whether the connection is at the local exchange or at the tandem exchange level.
Negotiations to date have certainly been protracted, but it is fair to say that both BT and the industry as a whole have conducted discussions in a spirit of co-operation. As a result, our view at Global Crossing is that the problems which remain, though tough, should not prove insurmountable.
With regard to the existing charging regime, there has been good progress and BT has shown a willingness to adapt its initial plans in response to input from working groups and more broadly across the industry.
As a result, from a contractual standpoint we are progressing well, though the volume of work which has yet to be delivered will increase as we get closer to the time when migration to the new IP-based networks takes place.
Looking ahead, a number of commercial challenges remain. Whilst the transition arrangements sit with BT 21CN, the ultimate charging arrangements in the new IP world – how network operators will charge each other for carrying and terminating voice, data and video calls in an IP-to-IP environment - sit with NGN UK. Another issue is how providers will be compensated for their significant legacy investment in fibre connections into redundant TDM exchanges.
Those companies with the largest and most effective infrastructure investment are currently achieving the lowest termination rates. The goal therefore is to maintain the status quo and ensure that no-one secures an unfair competitive advantage as a result of the transition. This will be difficult to achieve as each provider has a different footprint within the IP world.
By contrast to the advances made on the contractual side, technically the project is behind schedule. However, in what is a huge undertaking, this is perhaps not surprising. It is absolutely essential to ensure full confidence in the underlying technology before migrating customers to the new converged network.
From a business development perspective, each provider will need to ensure it has the right products and features in place for the new converged network.
At Global Crossing, for example, we have the advantage of already having an IP-based network in place, with supporting solutions and services. As such, the main benefit of 21CN is that it will enable us to extend our reach to smaller branch offices within our large and medium-sized customers.
Global Crossing is co-chair of the Interconnect and Portfolio Working Group.