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April 2014

The Interexchange Provider: Guardian of the Telecom Ecosystem’s Genetic Code

The Interexchange Provider: Guardian of the Telecom Ecosystem’s Genetic Code

Welcome to Telexchange Journal.  The mission of this new on-line magazine is to explore a corner of telecom that many consider a side show, but nonetheless is absolutely vital to the industry’s future.

Telexchange covers the strategic issues, systems, and services that enable members of the digital ecosystem to make money.  It’s about how service providers trade and share things: traffic, facilities, services, content, spectrum, messages, identity/location information, and other data.

Now there’s some irony here.  While every service provider is in business for itself, the telecom business — at its root -- is really a sharing business since very few services are delivered by one operator end-to-end.  In fact, the word telecommunication, derives from the Latin word communicare, meaning “to share”.

Our purpose, then, is to bring you the opinions of telexchange experts far and wide.  And we would highly appreciate it if you, dear reader, would help put us in contact with these global experts.

Now over the past two years, our sister publication, Black Swan Telecom Journal, has published several stories relevant to the telexchange theme.  We’ve gone ahead and copied those stories to this site so you can read them.

But for our launch, I wanted to interview someone special -- an expert on the many facets of telexchange activity.  Hard as it was to find someone with those credentials, Richard Jacowleff, CEO of iconectiv, fits the bill very well.

You may not be familiar with the iconectiv name quite yet.  That’s because the company is a new subsidiary from Ericsson’s 2012 acquisition of Telcordia.  But Richard and his team gave me a wonderful briefing at their Piscataway, NJ offices, part of which I worked into this interview.

Among the subjects Richard discusses here are: number portability, the changing role of regulators in telexchange, and the pivotal position that interexchange providers play in the market.

Dan Baker: To begin, Richard, it would be great to hear how iconectiv fits into the larger Ericsson empire.

Richard Jacowleff: Dan, first of all, congratulations on the launch of Telexchange Journal.  We’re eager to see it succeed because there needs to be a forum to discuss the big implications of service provider sharing and the regulatory overlap that enables the digital ecosystem to grow and prosper.

When Ericsson acquired Telcordia in 2012, they first took the OSS/BSS product lines and integrated that into their Support Solutions business unit.  Another piece was the Applied Research and consulting arm of Telcordia that does top security work for the U.S. government and that was spun off separately.

As far as Telcordia’s interconnection business, we rebranded as iconectiv, and operate independently as a subsidiary of Ericsson with our focus around interconnect services: we run major infrastructure in 19 countries doing things like number portability and messaging.

Now the brand name, iconectiv, fits what we do, though you’ll sometimes see us mentioned in the press as Telcordia, which continues to be our legal name.

When you describe your business on your website, you use the term “neutral third party”.  Could you clarify that term a bit?

Sure.  The telecom ecosystem is an international community of walled gardens that need to cooperate with each other to make money.  So a trusted interexchange provider is someone who sits in the middle of those walled gardens and connects them with vital information and connectivity.

The need for interexchange providers has grown over the years.  In the TDM world it was too expensive to do number portability.  But then along came AIN and the ability to manage on-line databases and that’s what enabled 800- or toll free numbers, which eventually grew into the full number portability capability we have today.

Of course, today the ecosystem has expanded from a traditional carrier-only one: to on-line players, content, and even small-garage-shop type players.  The explosion in Over The Top players is enabled in this way because while some companies have the content, they might lack the full breadth of things they need to get plugged into a telco network and reach a handset.

So there’s plenty of opportunity for interexchange providers like iconectiv to be in the middle and act as the “glue” that holds the ecosystem together.  The carriers can‘t do it themselves.

For instance, operators want to roll out their new products and services in secrecy, but you still need to inform people in the loop ahead of time so you are ready.  After all, Carrier A can‘t notify Carrier B that it’s launching in the Chicago market on the 21st.

Where’s it all headed?  And how will the move to all-IP change things?

The move to all-IP will only accelerate the need for greater sharing and information exchange.  After all, there are more players and more things to connect.

The circuit-based world is fixed, proprietary, and expensive because it was purpose-built with SS7 networks.  But the internet is at the opposite extreme, a kind of throwback to the 1970s pop culture with its hippies, free love, and breaking all the rules.

Now in the new world, it is not going to be “anything goes” because you have to have a business model.  You’re going to get all the flexibility of the IP model, but wrapped in a structure so the business retains some sanity and control.  Otherwise you end up giving everything away, which is the big fear.

It’s interesting because whether it’s voice or some other service, the high level process is largely the same -- you dip into a database and ask: who wants to reach this handset?  What type of handset is it?  Where is it located?  What is its policy?  And then you deliver the service to it.

And by the way, the garage shop guy I talked about?  He often wants the service provider to deliver the service, bill it, settle it, bank it, then send him back a commission.

The Number Portability Administration Center (NPAC) contract is up for bid in 2015, and you compete with Neustar for that.  But even today, I understand, you are heavily involved.

Today, Neustar runs the database called the NPAC and we process 95% of the underlying communications between the wireless carriers.  Essentially, we supply the provisioning platforms -- the business logic that enables all of the carriers in Canada and U.S. to talk to each other.

Although I can‘t say much about our involvement in the upcoming bid, due to strict NDA rules, I can say that finally having a competitive process for the NPAC ultimately benefits consumers in the end.

The award for the new NPAC administrator is scheduled to be announced around May 6th, we are hopeful that we can follow up with more details soon after.  Needless to say, as a U.S. company, winning the NPAC would be a very exciting opportunity for us.

All of which brings up the subject of regulation, another crucial cog in the telexchange wheel.

Dan, the role of the regulator has risen in recent years.  In fact, until the regulatory regime decides how things are to be rolled out, it’s rather hard to make technology decisions.

The regulator’s key job is to protect the natural resource.  Spectrum is a natural resource.  A number is another natural resource.  And the idea is to maximize those resources and make sure no groups are left out.  Regulators in all countries are trying to accomplish the same thing; they just go about in different ways.  And in the end, the regulator has the same walled garden thinking as the operators: I need to focus on my nation.

Now in some countries the regulator is passive.  But a telephone number, a form of identity, is becoming a global issue now.  You can‘t just worry about what is happening inside your country, you have to worry about what everybody else is doing.

Regulators are increasingly worried about protecting their data and security.

In the old days, before anybody put any value on the number portability data set, regulators maintained fairly loose control.  Some companies took the dataset and put up global hosting centers in places like London or Paris.  Carriers would rely on these hosting centers to deliver text messages around the world because the centers had sufficient identity data.

But India said, “Wait a second.” They said, our data doesn‘t leave the country because it needs to be monetized and protected.  Mexico did the same.  So even the regulator mindset is starting to shift and they are recognizing that this data can be controlled and is of value to them for multiple reasons.

In some markets, we distribute or manage that data.  In other markets like India, we actually get into the content and transport business.  We deliver SMS messages to all the operators in India because it is not permitted to distribute identity data outside of the country.

Richard, this is certainly one of the most interesting industry briefings I’ve ever received.  Thank you for these insights.  You certainly make the case for paying attention to the role of interexchange providers.

Dan, it’s been my pleasure.  Lots of things are being exchanged in the digital ecosystem: messaging, commerce, money transfer and traffic.  And there are dozens of ways to package all that, but if you try to seamlessly connect everything using linear connections, it doesn‘t scale.

It has to be connected through some interconnect provider to work seamlessly.  A bank is not going to establish 500 direct connects with operators: that’s not what they do.  They need to work with trusted providers to extend their reach.  Likewise, a bank is not going to serve iPhone users only.  They need to serve all mobile phone users, but they are not in the business of understanding what capabilities a phone has or doesn‘t have.

So yes, all vectors point back to having trusted interexchange providers who supply that all important glue.

Copyright 2014 Telexchange Journal

 

About the Experts

Richard Jacowleff

Richard Jacowleff

Richard Jacowleff is President and Chief Executive Officer of iconectiv and serves as Chairman of MNP Interconnection Telecom India Pvt.  Ltd.

Richard began his career with Bell Laboratories in 1981.  Since then he has held a series of technical and executive positions at Bellcore and Telcordia, most recently as President of the Interconnection Solutions Business.  In these leadership roles, he was responsible for product realization, engineering, and business results in the 125 global markets in which Interconnection Solutions operates.

He led Telcordia’s expansion in the emerging economies of the world and into a market leader of mnp clearinghouse services.   Contact Richard via

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