60 Seconds with Jim Dalton
CEO of TransNexus Inc

Voice over IP is a key part of unified communications for many service providers and businesses today. But beyond just desktop-based considerations, the impacts of VoIP span local and wide area networks. Jim Dalton, CEO of TransNexus Inc., who gave a well-received session at AstriCon this fall, recently spoke with Paula Bernier about local-number portability and why VoIP providers need to know about it.

Who is TransNexus?

JD: TransNexus is a software company focused on providing solutions to next-generation networks for least-cost routing, number portability, traffic reports, profit analysis and wholesale billing.

What is LNP, and what do VoIP providersneed to know about it?

JD: LNP, or local number portability, refers to the concept that a telephone customer can keep his or her telephone number when he or she switches service providers. When a customer takes the number to a new service provider, that telephone number is associated with the local routing number, or LRN, of the new service provider. Routing based on the dialed telephone number is wrong when a number has been ported to new service provider. This routing error is an expensive error for VoIP providers, who would save significant costs if they routed the call correctly using the LRN.

What are the rules around ensuring local number portability?

JD: The 1996 Telecom Act mandated competition and telephone number portability for end users. The FCC mandates that the next to last network (N-1) before the final local exchange carrier serving the called party must perform an LNP database dip.

What happens to service providers if they don't route-correct for local number portability?

JD: If a local exchange carrier receives a call for a dialed telephone number that is assigned to them in the LERG, but has been ported away to another service provider, the LEC can charge the originating network a very high charge for the misrouted call. This scenario is not limited to calls from IXCs to LECs, it applies to calls from any network (IXC, wireless or VoIP) misrouted to the wrong LEC.

You mentioned the LERG. What is it?

JD: The LERG, or local exchange routing guide, is the routing table for the North American telephone network. It includes the list of all telephone dial codes and their associated LRNs. The dial code for a telephone number is the first six of seven digits of the 10-digit telephone number. The LERG also includes the list of local access transport areas, or LATAs, and operating company numbers, or OCNs, which are commonly used to define interconnect rates between carriers.

How many calls are ported in the U.S.?

JD: For some of our customers, 40 percent of all calls are to ported telephone numbers.

Can you quantify the cost of route correcting?

JD: Based on the experience of our customers, who are VoIP providers, we see that number portability correction can lower their termination costs by 4 percentto 15 percent. This is a net savings, after number portability query expenses, which contributes directly to net income.

Can you quantify the cost of not route correcting and detail where those costs come from?

JD: There are several costs from misrouted calls for VoIP providers. First, most VoIP service providers are interconnected with multiple long-distance providers who complete the VoIP service provider's traffic to the public switched telephone network. The VoIP service provider typically uses least-cost routing to determine the lowest cost long-distance provider for each call. It is common for wholesale rates from long-distance providers to be quoted in terms of LATA and OCN, not by telephone number. So if the VoIP provider performs least-cost routing based called telephone number, the call to a ported telephone number will not be routed to the lowest cost long-distance provider. For the call to be routed accurately, the call must be routed based on the LRN, which will direct the call to the long-distance carrier with the lowest rates for the LATA and OCN of the called party. Routing the call based on the telephone number will route the call to the wrong OCN and will be more expensive.

Second, many VoIP providers check the bill they receive from the long-distance providers by calculating what they think the bill should be. If a long-distance provider quotes rates based on LATA and OCN, then all calls will be rated using the LRN, not the dialed telephone number. If a VoIP provider does not have the LRN it cannot audit its bill from the long-distance provider.

Third, VoIP providers can negotiate lower wholesale long-distance fees if they perform number portability correction.