In the 1990s, the rapid build-out of IP infrastructures and the expansive growth of the Internet brought volumes of traffic onto service provider networks. However, pricing pressures and competition have driven down the average cost of Internet and data services, relegating much of this volume to low-margin Internet connectivity.

Today, service provider growth, profitability and sustainability hinge on cost containment and the ability to offer new, differentiated services. Yet, providers are often left with no choice but to deliver best-effort services, as most network equipment can't provide a sensible model for delivering and accounting for premium services. This has led carriers to look for ways to unlock the full potential of their networks, moving beyond low-margin services to profitable, sophisticated IP-based services.

Many service providers are turning to MPLS-enabled multi-service routers. The reasons are clear. New multi-service devices like the ST-series Service Edge Routers provide the connection-oriented forwarding necessary to bring private data transport services to the IP network while providing the Quality of Service (QoS) and bandwidth management functionality of traditional ATM and Frame Relay switches. The ST-series enables the delivery of premium Internet services by establishing connections through the network with guaranteed bandwidth, classifying and mapping customer traffic onto those connections and incrementing corresponding billing counters.

With the ST-series, service providers can now include a suite of profitable premium Internet services such as destination-sensitive billing, differentiated Internet access, transit and peering in their service portfolios.

Destination-sensitive Billing

Typically, Internet traffic is billed according to flat-rate pricing structures. This is characteristically not a profitable billing model for service providers because it is more expensive to transport traffic over long distances. New services such as destination-sensitive billing enable service providers to charge customers based on the ultimate destination of their traffic. (Think landline telephone service.) Destination-sensitive billing helps protect carriers from pricing pressures by enabling them to reduce pricing on routes where the cost of delivery is lower while maintaining higher prices on more costly long distance routes. Service providers can take this rate structure one step further, bundling it with free premium service levels for traffic that stays within their network, providing a compelling reason for customers to use the same service provider for all of their sites.

The ST-series enables this type of profitable billing scheme via sophisticated routing policy and the most comprehensive per-customer and per-service counters in the industry. In contrast to less accurate sampling methods, always-accurate ST200 service accounting provides detailed statistics at each stage of processing, collecting and storing information about every single packet and byte of traffic for custom billing models.

Differentiated Internet Access

Service provider customers often have varied requirements for Internet access quality. Via the ST-series robust QoS and bandwidth management capabilities, service providers can meet these requirements with differentiated Internet access, or "business class Internet access," wherein they deliver differentiated service levels for traffic and charge customers at distinct billing rates. In addition to meeting customer demand, this service offers carriers a way to improve upon their current low-margin Internet access service.

Transit

Wholesale, or "transit" services are essentially bandwidth sold to service providers and then resold to end-users. These services are very bandwidth intensive and, as such, service providers are often forced to provision backbone bandwidth with minimal oversubscription to meet demand. This creates a dilemma for the service provider that sells both wholesale and retail services: they either oversubscribe their network and fail to meet the intense bandwidth utilization of wholesale requirements, or they overprovision their network and fail to generate profit on retail services. The solution is to utilize sophisticated traffic management to allow different subscription rates for retail and wholesale customers.

The ST-series includes sophisticated traffic classification and rate limiting features that, for the first time, enable service providers to differentiate wholesale and retail services. Incoming traffic from customers can be classified as wholesale or retail based on the interface on which it arrives. Then, the retail portion of the traffic may be sent through a separate rate queue that limits the amount of retail traffic allowed to enter the backbone. This allows retail traffic to be assigned a different oversubscription rate than wholesale traffic, enabling more profitable service delivery. Even further sophistication can be applied to this service model utilizing our BGP policy-driven classifiers and counters, which enable the creation of advanced classification techniques.

Peering

Service providers frequently enter into peering arrangements in which they agree to carry each other's traffic (provided it is at a similar volume) at no cost. Peering typically occurs via public peering facilities, which require service providers to purchase circuits at these locations. Using the ST200, service providers can establish direct peering relationships by constructing private peering connections with other carriers with whom they have negotiated reciprocal traffic agreements. This avoids the expense of continuous access charges associated with using public Internet access providers where it is not required, reducing costs for both carriers.

Conclusion

New premium Internet services afford service providers a way to move beyond low-margin Internet connectivity to profitable, sophisticated IP-based services. The ST-series Service Edge Router enables the delivery of these premium services via comprehensive accounting and classification features that allow carriers to differentiate traffic and bill customers according to usage or destination.