October 1, 2006

A Primer on Business Telephony

Disruptive Technology Creates Opportunity

By Pierre Fournier, Nortel

The U.S. business telephony market is huge. Estimated by Kagan Research at some $120 billion, it is nonetheless undergoing a fundamental transformation as the deployment of voice over Internet protocol (VoIP) and session initiation protocol (SIP) precipitates a convergence of the voice and data infrastructures.

This shift presents cable operators, who have captured only a fraction of this market, with two opportunities:

• Develop new interconnect solutions geared to VoIP that leverage the built-in quality of service (QoS) of today’s DOCSIS infrastructure
• Leverage existing legacy voice line and trunk services to capture additional enterprise telephony customers

The introduction of CableLabs' business services over DOCSIS (BSoD) specifications, combined with deep fiber networks, will continue to position cable operators to compete strongly in this market space. The key to successful entry lies in helping enterprises successfully manage the transition from traditional to IP-based telephony. For the cable operators, it means that they must effectively compete with the incumbent legacy voice providers to gain market share and retain this new customer base as they move into VoIP and other advanced services.

This current trio of voice/data/video represents to the cost-conscious enterprise a powerful single-supplier offer that may prove irresistible. For this ubiquitous service offering to be successful, it must include comprehensive legacy voice services coupled with IP services.

Enterprise needs

Enterprises of all sizes utilize telephony switching equipment to maximize the use of their costly publicly switched telephone network (PSTN) resources. Commonly called private branch exchange (PBX) or key systems, these devices are traditionally customer premises equipment (CPE) that multiplex or distribute incoming PSTN lines to the subscribers.

For large enterprises, a PBX provides PSTN interconnection for the individual extensions it hosts; at a minimum, each extension has a unique dialable multi-digit extension number and an intercom button. To connect to a PSTN-based directory number (DN) from a PBX, the user must first select the intercom (dedicated key on phone) and dial a predefined code to access a PSTN routed facility. Conversely, incoming calls can be either routed to a human or automated attendant for interception and forwarding to the correct extension, or where direct inward dial (DID) service is available, calls are routed by the PBX to the correct extension.

A key system, favored by enterprises of five to 20 employees, refers to a telephone switch where each extension, or telephone set, has one or more associated outside phone numbers and lines. The difference between it and a PBX is that users can press a key and hear PSTN dial tone immediately, without dialing an access code. Effectively, the ratio of incoming lines to extensions is larger than in a PBX.

Today’s telephony CPE comprises multi-function devices providing a suite of value-added applications to the enterprise. These can include:

• Traditional telephony: PSTN access to a fixed number of internal extensions
• VoIP: IP set termination, IP trunking, and gatekeeper/proxy connections
• Data services: routing, firewall, domain name system (DNS), security, etc.
• Advanced telephony features: call center, auto-attendant, interactive voice response (IVR), computer telephony integration (CTI), voicemail, etc.

Legacy, and beyond

In order to provide legacy telephony services, the PBX and key systems require dedicated connections to the PSTN—individual lines or multiplexed facilities called trunks. These PSTN resources are a significant source of monthly operational expense (OpEx), and enterprises of all sizes engineer the smallest number of PSTN resources for their calling patterns that will still avoid blocking conditions (where a user can not get access to an outside line).

In legacy systems, the exact ratio of internal extensions to PSTN network resources is engineered through the use of an Erlang call model and the telephony traffic patterns. There are multiple Erlang models designed to emulate different call treatment behaviors as seen in the current feature-rich environment of PBX: acceptable call blocking percentage, DID, calls center, call hold times, etc.

An added dimension to the engineering of PBX and key systems is the introduction of VoIP. Voice network engineering can now span PSTN and Internet resources; enterprises are learning the new language of codecs, sample sizes and SIP. The current market momentum that this convergence to a single infrastructure has precipitated is prompting enterprises to review their requirements and business models. The opportunity for cable operators is to leverage the built-in QoS of their fiber-deep DOCSIS plant to capture the enterprise market through a single-supplier legacy voice, VoIP, and data offering.

IP and VoIP technologies are forcing today’s PBX and key systems to evolve and adapt. These forces of network and services convergence are not only facilitating the deployment of VoIP onto the data infrastructure, but in the case of DOCSIS, they are also allowing the delivery of legacy voice over that same network. In the near term, the enterprise business model of CPE-provided legacy voice appears to remain a constant.

A survey of the enterprise telephony market by Pollara Research attempted to size the deployed voice CPE in terms of the three legacy voice service models:

• PBX/key system: CPE whose PSTN interconnection is provided via analog or digital trunks
• Single business line: business equivalent of residential plain old telephone service (POTS)
• Central office exchange service (CENTREX): a central office telephone line providing advanced business services that emulate a PBX

Respondents were specifically asked, “What kind of telephone systems do you have in your company currently?”  The results showed a clear trend: Enterprises in the four-to-1,000 employee range are heavily invested in key systems and PBXs. To further grow their share of this market, cable operators must drive their existing legacy voice service offerings (line and DS-1 trunk) further into this installed base. (See Table 1.)

Table 1: MSO Legacy Voice Offering

The next step is to understand how cable operators reach through their DOCSIS infrastructure to provide these services ubiquitously.

Deployment topologies

The great opportunity for cable operators lies in extending the existing service set to include voice services into the enterprise interconnect market. Let’s review the topologies of two legacy voice services, telephone line and trunking facilities, in the light of the opportunity to monetize this market further.

Line service. Key systems are inextricably linked to PSTN lines; in fact, they are usually sized and referred to by the number of number of PSTN incoming lines vs. the number of extensions it can support. They are often referred to as:

• “3x8”: a maximum of three PSTN incoming lines with a maximum of eight extensions
• “4x16”: four PSTN lines to 16 extensions

PBXs also utilize lines for PSTN access, generally in the fewer than 100 extension deployments.

Line-based infrastructures are also typically complemented by a data network, and depending upon its provider, this overlay data network may or may not be QoS capable—a prerequisite for any future VoIP. A simplified view highlights that the enterprise must manage two different network interfaces and potentially two different service provider relationships. (See Figure 1.)

Figure 1: PSTN Line Reference Network

For cable operators, the value-add to the enterprise lies in eliminating one of the overlay networks through consolidation onto a converged infrastructure. Within a DOCSIS network, and in conjunction with a call server, there are two configurations depending upon the type of CPE providing the line appearance:

• A nonPacketCable multimedia terminal adapter (MTA) is connected to the cable modem and provides one or multiple telephony line appearances to the key system or PBX. (See Figure 2.)
• A PacketCable-compliant cable modem with embedded MTA (EMTA) provides the telephony interface to the PBX or key system. This combined appliance reduces the number of CPE devices and the overall provisioning effort. (See Figure 3.)

Figure 2: DOCSIS MTA Line Deployment

Figure 3: DOCSIS EMTA Line Deployment

With either configuration, the enterprise benefits from OpEx savings of having to manage a single network interface and a single provider relationship.

Trunk service. The decision whether to use facility-based PSTN connections (trunks) is usually based upon capacity or service requirements. The trigger point is not strictly associated with a specific number of incoming lines, but is also a function of the initial costs and ongoing monthly charges. In practice, the larger PBX deployments utilize trunk interconnect, while key systems are generally line-fed.

With PBXs available in both analog and digital varieties, the enterprise is guided to make a selection in keeping with the telephony PBX mode of operation. For example, the implementation of DID services, where each extension is accessible via listed directory number (LDN), may be accomplished over both types of trunks. However, integrated services digital network (ISDN) primary rate interface (PRI) remains a popular choice because of its suite of advanced network services.

The reference topology is virtually identical to a line-based interconnect. (See Figure 4.) In fact, other than the adaptations required to support the DS-1 medium, the enterprise will see little operational difference between line and trunk connections.

Figure 4: PSTN Trunk Reference Network

For trunk connected enterprises, the challenge remains to manage separate voice and data network interfaces and potentially multiple providers. Again, the opportunity for cable operators lies in eliminating one of the overlay networks and subsequently providing a lower cost service to the enterprise.

Today, cable operators can provide DS-1 facilities to enterprises by utilizing circuit emulation service (CES) devices: a type of media gateway that packetizes the NxDS-0 for transport over IP. In this topology, the CES device that resides in the enterprise premises is mated to a unit in the cable operator’s network, where the DS-1 is re-constituted. (See Figure 5.)

Figure 5: DOCSIS CES Trunk Deployment

The DOCSIS infrastructure and its various components are provisioned to provide the appropriate QoS between the two CES devices to comply with the latency and jitter requirements of time division multiplexing (TDM) voice service. The final connection is to the cable operator’s call server, which services and treats this DS-1 facility with basic or advanced services (such as PRI) and provides interconnection to the PSTN.

In the future, when the full vision of the BSoD architecture has been implemented, further simplifications to the topology will be possible. The incorporation of TDM emulation adapters (TEAs) within the CMTS and cable modems (see TE-CMTS and TE-CM respectively in Figure 6) will significantly reduce the provisioning and setup of trunk services.

Figure 6: DOCSIS BSoD Trunk Deployment

Conclusion

Serving the traditional telecommunication needs of today’s enterprise, and capturing a larger share of this $120 billion market, is well within the grasp of cable operators. With technical foresight and care of provisioning, enterprise customers will soon benefit from the business advantages of “QoS to the door” of today’s DOCSIS network.

Pierre Fournier is a leader, Carrier Voice & Hosted Solutions, Enterprise CTO Office, for Nortel. Reach him at pierre1@nortel.com.