Intelligent Solutions

Turkeys encouraging Christmas (IPEX resellers beware)

Simon Woodhead

Simon Woodhead

29th August 2018

We’ve long banged the drum, often seemingly alone, about how BT’s IP Exchange (IPEX) service is a managed service, and not equivalent to the regulated Standard Interconnect Agreement or “SIA”. This is significant in a number of ways, not least BT’s right to vary commercial terms between their customers.

Another factor is the right to terminate. IPEX can apparently be terminated with 30 days notice, whilst the SIA requires two years. There is a situation currently where a Communications Provider (CP), with number ranges hosted on IPEX, has been given 30 days notice of termination. The consequence for them is pretty catastrophic but, moreover, so is the consequence for their customers. Of course, this isn’t just their current customers, but also their former customers that have ported away.

Now, porting hosted numbers away from IPEX is quite an achievement and a distortion our porting team battle with every day, but this serves to illustrate how broken the system is. Not only can BT unilaterally terminate service without external oversight but, by virtue of the very broken porting process, former customers of the affected CP are collateral damage.

To cite the affected CP directly (emphasis is ours):

We originally interconnected with BT when they first launched their IP Exchange product in 2007. All went well until recently; we spent the best part of £5,000,000 with them in that time, and we were (mostly) happy customers.

Then we had a dispute over whether some traffic is artificially inflated and, as a result, BT decided to terminate our IP Exchange contract – basically, they’re not paying our bill and cutting us off. The standard IP Exchange contract allows them to do this on 30 days’ notice for any reason. We received a termination notice on March 2nd, which BT extended a couple of times and then withdrew. We had discussions with Ofcom during this time, and referred a dispute to them asking them to make a determination that the clause allowing BT to terminate “at will” was undesirable; Ofcom declined to investigate. BT subsequently re-issued the termination notice.

The old-fashioned TDM interconnect under the Standard Interconnect Agreement does not allow BT to terminate “at will” – well, they can, but they have to give 24 months’ notice and renegotiate a new agreement. It also provides signatories with a seat at the SIA working group, which makes various determinations as to how interconnects are managed. As a case in point, it’s responsible for working on the AIT provisions; these are then imposed on IP Exchange customers without their having an opportunity to have their voices heard.

We don’t agree with the “old fashioned” reference, although it is one we hear daily from other IPEX resellers in the context of them refusing to port numbers – the suggestion that we need to get with the program to enable it, contrary to what the IPEX handbook actually tells them – but the rest is pretty damning and should be concerning for anyone building a legitimate business on IPEX. SS7 is the only transport provided for under the SIA, ergo, TDM is the current medium for interconnecting under the SIA. IP is the current medium for reselling the IPEX managed service.

Of course, one can re-home numbers to another network. The ease of doing so is one reason we encourage our customers to get their own number ranges, lest they ever fall out of love with us. However, that process takes BT 30 days; that is 30 days from routing plans being submitted to them, excluding all the preparatory work on both sides (even if one side is IPEX). Thus, a reseller that is served 30 days notice of termination, on paper at least, is going to be out of service and – more importantly – their customers, and even former customers who have ported away from them, will lose service. On this occasion it appears BT did allow a few extensions.

I can only hope that those very large networks who are now members of the secret club, and are busy dismantling their own TDM infrastructure built under the protections of the SIA, have negotiated a greater notice period than 30 days. Check mate BT whenever they choose if not. We won’t take that risk with our customers.

As we’ve said many many times, we’re not a BT reseller – we do not use IPEX in any way – we have a Standard Interconnect Agreement, in common with other actual networks. We’ll also happily host numbers for other CPs. As an SS7 interface to the PSTN, we sit alongside IPEX, not underneath it as many wish to portray. We host many numbers for 20 or so other Communications Providers, of all sizes.

We’ve also had occasion to terminate customer contracts. Hosting numbers for a rascal is not a fun responsibility to have and we’ve had to take action in the past to protect consumers, sometimes battling Ofcom in the process. However, our agreement for hosting numbers requires us to give customers six months notice. Six months is a realistic time scale to migrate ranges to another operator and we feel it is fair. We do not think 30 days is!

Of course, some of you may be thinking that getting your own SIA is a sensible thing to do. The path is fraught with difficulties, not least a sales process that appears now to be lubricated in the direction of IPEX, but huge technical and regulatory challenges. All that to get to a position where your economics go backwards until you build it out much, much further. Do not forget that in 2014 when Ofcom took 86% of our income away because of “Significant Market Power”, it simultaneously allowed BT to dramatically increase its transit pricing – getting an SIA now is a hard path given multiple market distortions over many years. You could instead work with a competent network that’ll host your ranges for you and treat you fairly. But beware there: there are some so called “carriers” with zero infrastructure; simply resellers of a reseller of IPEX, and their balance sheet is at best precarious.

Finally, there may be some of you concluding that this IPEX thing must be the future. Our position there is that IP is the future, BT IPEX is not, although we welcome it as a competitive alternative in a fair market. At some point the regulator will wake up to the fact that the SIA could and should be transport agnostic, at which point the secret club will eventually be opened to undesirables like us, i.e. enable interconnection over IP with the protections of the SIA. What will happen to IPEX then remains unknown – will IPEX resellers be gifted SIA status or remain resellers of the managed product? Well, BT are also many moves ahead of Ofcom there and IPEX already operates with multiple different ‘types’ of resellers – those in the secret club don’t have access to the IPEX-only porting department for example, resellers do, so a clear separation seems obvious. So you could play along with re-monopolisation and derive no ultimate benefit, risking your business in the interim, or you can work with competitive networks to raise awareness of what appears to be happening and benefit when it is ultimately overcome. I don’t mean exclusively Simwood, there are a handful of others that play fair and are independent, but do so more quietly and behind closed doors – we don’t want a monopoly, simply fair play in an honest and transparent market place.

Meanwhile, for our part we have escalated our ongoing disputes over what we allege to be BT’s attempt at re-monopolisation to the Competition and Markets Authority. Of course, this should normally be referred to Ofcom but we are making the case that they are aware and have had many many opportunities to act were they inclined to do so. Of course, the more voices saying the same thing, the more likely they are to get involved.

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