InterComms :: International Communications Project
  Intercomms Issue 18
Issue 18 Articles

Number Misuse, Telecommunications
Regulations and WCIT

By Geoff Huston, APNIC Chief Scientist

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Geoff Huston, APNIC Chief Scientist
Geoff Huston, APNIC Chief Scientist

As Chief Scientist at APNIC, Geoff Huston heads APNIC Labs, conducting leading research on Internet infrastructure, standards and operations. During the 1990s, Huston was instrumental in the establishment of the Internet in Australia, first through the academic network, AARNet, and then through Telstra’s national Internet services.

Moves to include the Internet into a reviewed set of international telecommunications regulations by placing it in the same category as telephony are somewhat problematic. The Internet and the global telephone network have very different cost, service, and engineering structures. So, what constitutes a threat, fraud, or misuse in one, may be a fundamental characteristic, or an advantage, of the other.

This December, Dubai will play host to the world’s nations for a World Conference on International Telecommunications (WCIT) to review the International Telecommunications Regulations (ITRs), a treaty defining the general principles for international telecommunications. Considering all that has happened since the last update, a quarter of a century ago, some argue the ITRs should change to better reflect today’s environment.

So far there is little common ground. Some countries seek measures to rectify specific operational issues in the telephony system, while others argue the ITRs should embrace the Internet and want to include references to it anywhere specific carriage and service delivery technologies are referenced. It is where these unrelated goals intersect that things get really interesting.

Telephony: Sender pays

To understand the current ITRs, it helps to understand the telephony world that gave rise to them, and in particular, how money circulates in that world.

Since the current ITRs were agreed in 1988, global communications have seen a seismic shift away from a model that remained largely unchanged since London’s penny post back in 1680’s. Even with new technologies and the globalization of postal, telegraph, and telephony services, the “sender pays” principal remained largely ubiquitous.

When the post went international, the model was extended so that the originating postal service and the delivering service could share the sender’s payment to compensate them for their respective roles. International telephony largely mimicked this solution, so that the caller still pays with the revenue still shared between the caller’s provider and the “terminating carrier” in a system of “inter-carrier call accounting financial settlements”. The charges apply in both directions, but the net direction of payment depends on the balance of calls and the termination costs charged by each.

Some carriers set termination settlement rates well above cost. So, for example, in the early 1990s it was up to 10 times more expensive to call a US number from France, than to make the same call in the other direction. This allowed some carriers to make healthy profits terminating calls to their country code and provided the governments that operated them with a significant offshore revenue stream.

Fraud and misuse

When the introduction of “Premium” telephone services, for weather forecasts, news headlines (and some more unseemly services) provided a new revenue stream, the money was split between the carrier and the service provider. However, these services were illegal in many countries, so an innovative workaround was devised to relay these calls to a country where they were permitted. Any additional profit from international call accounting settlement provided an extra incentive for both carrier and service provider.

Another profit opportunity for the inventive involved routing calls not solely on the dialled country code, but on number blocks within the country code to obtain better deals on different transit routes. From their point of view, the bypassed carriers were defrauded of legitimate settlement revenues through the “misuse” of the number block drawn from their country code.

This type of E.164 country code “number misuse” is the context for ITR proposals that require governments to enforce protections against misuse and fraud. The motivation is to ameliorate an inevitable revenue leakage of international call accounting settlement payments.

Other practices, such as Voice over IP (VoIP) trunking, further contribute to this revenue decline. By trunking international calls using VoIP and then terminating their calls locally, originating carriers effectively bypass these conventional call accounting measures.

Couple this with the growing use of end-to-end VoIP solutions such as Skype and the downward pressure on call costs and the subsequent revenues, it comes as no surprise that some advocate an international regulatory response.

Numbering confusion

Implementing a solution is not so straightforward when other countries are pushing to include the Internet in the ITRs. Provisions designed to combat E.164 “number misuse” could easily create regulations that affect IP packets in an unintended way. Stipulating for instance that IP packets must be routed to their specified destination address may seem reasonable at first glance, but this type of “misuse” is in fact a norm that significantly improves the functioning and efficiency of IP networks.

Web proxy servers do just this, by intercepting web requests and replying to them from cached data, rather than delivering them to their destinations. As long as the proxy is faithful, the end user, the ISP, and even the content provider are all advantaged. This form of “address misuse” improves response times for the sender while reducing data volumes across transit infrastructure, but is it an instance of fraud?

To answer this question we need to compare Internet accounting and settlement practices with those in the telephony world. On the Internet, the sender does not “pay all the way”. Each IP packet could be thought of as being partially funded by both the sender and the receiver as part of their Internet service. Failing to deliver the packet to its specified address, at least in the case of a web proxy, is a deliberate effort to reduce overall cost in the system. It is difficult to conclude that this constitutes fraud since everybody in the equation benefits from the practice.

Another form of “number misuse” is the widespread use of firewalls to intercept and discard packets that match pre-determined rules. Commonly used as a security mechanism, there are other uses: many ISPs use firewalls to block access to their services from users who are not customers; while many countries use packet interception to enforce regulations that block access to certain Internet content. Are they all guilty of number misuse? Is there support for regulations that obligate governments to completely stop this practice? It seems unlikely.

Our worthy ideals

Packets are different from circuits, and the mechanisms in place to finance and manage them are appropriately different. So when the existing ITRs refer to inter-carrier call accounting financial settlements, there is no clear translation to the Internet. When this is extended to concepts of “number misuse” and “call termination bypass”, any similarity between the two is completely lost.

The ideals behind the ITRs are worthy ones that should not be discarded lightly, if at all. However, using them to explicitly address specific issues, or carelessly expanding the telephony-centric ITR umbrella to encompass the Internet is unlikely to yield the desired outcome for any stakeholders.

Perhaps a better way to bring yesterday’s ITRs into the 21st century is to frame them as national obligations that speak to the overall objectives and aspirations all nations share for these invaluable, unique communications resources.

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