Monday, January 30, 2012

[Guest post]: Policy and Charging: The Value of Independence

By Doug Suriano*, Chief Technology Officer, Tekelec

The integration of the policy server (the 3GPP-defined policy and charging rules function, or PCRF) with charging and billing systems is emerging as one of the key considerations in the 3GPP Policy and Charging Control (PCC) architecture. This architecture specifies several interfaces – Gx, Gy or Gz –to online (OCS) and offline charging systems (OFCS) through the policy and charging enforcement function (PCEF). However, the 3GPP doesn’t define how to implement this integration. As a consequence, vendors and service providers have pursued a variety of approaches.

More recently, the 3GPP introduced a new interface, Sy, to create a direct link between the PCRF and charging systems. The Sy interface eliminates the need to do usage tracking over both the Gx and Gy interfaces simultaneously, improving messaging efficiency and eliminating the possibility of accounting synchronization problems between the policy server and OCS. More importantly, it will eliminate the need for complex and costly pre-integration between the policy server and the OCS.

Integration between policy and charging systems is required to charge for services based on subscriber entitlements. Both multi- and single-vendor implementations can support this integration. However, a single-vendor platform that pre-integrates policy and charging functions can ultimately limit a service provider’s choices, flexibility, scalability, signaling efficiency and time-to-market for new services.

The Service Provider Point of View

In a June 2011 Heavy Reading survey, almost 75 percent of service providers said that the single biggest barrier in deploying a policy architecture is integrating policy and charging. When Heavy Reading probed deeper into the issue with Tier 1 operators in a November 2011 survey, they concluded that:

Source: Heavy Reading survey of Tier 1 network operator attitudes to policy and charging, November 2011

  • Operators have run into major challenges implementing OCSs due to complexity and high costs associated with customization, professional services, and integration with gateways and policy servers (graph below). An operator provided insight into the size of the problem when he described a plan to move to a billing system capable of handling real-time, online transactions, and run pre-paid and post-paid on the same system. “This is a very complicated project,” he said, “and my guess is that it could take five years to fully implement.”
  • Almost 70 percent of Tier 1 service providers will use the policy server rather than the charging system to perform some charging and rating functions such as quota management (data allowance), rating, and balance management as a way of avoiding certain integration problems and offloading the charging system to reduce cost and complexity.
  • 3GPP standard interfaces are the most popular option for integration of policy and charging.
  • In the medium term, operators believe a significant proportion of policy rules will need to refer to charging systems for charging data such as spending limits. Said one service provider: “The important thing for us is that they [vendors] can demonstrate that they can meet policy use cases we have defined that need to refer to charging systems, and that they have done this before with other operators. We would need that re-assurance.”
  • Operators are planning deeper integration of policy with existing online and offline charging systems but they are not sure how to do it.
  • Less than 10 percent of operators intend to deploy pre-integrated policy and charging solutions in the medium term to resolve integration issues (graph below). One operator said, “We don’t think we need a vendor with both policy and charging expertise. We already have charging systems, so the policy vendor will be chosen independently. But we do need a vendor that has experience of integrating its policy product with third party charging systems—that’s the key thing. It’s important to us to know that the vendor can grow the system and achieve the integration we need in the longer run.”

Limitations of Pre-Integrated Policy and Charging 

Traditional charging and billing vendors propose solutions that pre-integrate policy and charging as an approach to monetizing mobile data. This single-vendor, pre-integrated approach has several drawbacks:
  • Costly and complex professional services and systems integration. Integrated policy and charging offerings often require higher professional services and systems integration costs to create policy rules and scale with network growth. In contrast, a network-based approach combined with an intuitive rules engine and carrier-grade software and middleware can provide a lower cost of ownership. Current Analysis recommends that “Operators should consider dismissing equipment makers that require operators to invest heavily in professional services in order to introduce new services or to modify existing service plans and service offerings.”
  • Proprietary interfaces. Integrated policy and charging systems can require extensive customization and professional services to interoperate with other control plane elements. Each new interface or use case often requires a separate statement of work and lengthy professional services engagements, resulting in a higher total cost of ownership and slower time-to-market for new services.
  • Poor scalability and reliability. As the network expands with multiple policy servers and charging systems, they need Diameter routing to direct messages to the appropriate system. A pre-integrated approach based on proprietary interfaces is not standards-compliant, making it difficult for the policy and charging infrastructure to scale. Furthermore, policy servers from charging vendors often lack key carrier-grade functionality required to ensure scalability and reliability when the network is congested.
  • Increased complexity and cost. Online charging systems are already taxed by a large number of complex integration with gateways, servers, and nodes as shown in the figure below. And as demonstrated in the Heavy Reading survey above, these projects are expensive, time-consuming, and complex. 
Source: 3GPP

An Alternate Approach

Dozens of tier one operators have elected to deploy a best-in-class policy server sold independently from charging equipment. The first requirement for this to succeed, of course, is interoperability with multiple vendors’ online, offline and legacy charging systems, in addition to a broad array of policy enforcement points.

High performance and scalability are pre-requisites as well, to meet the growing data and signaling traffic resulting from new service models and from the increased usage of data-enabled devices and applications. A policy server should have standardized Diameter interfaces and incorporate advanced carrier-grade functionality such as high processing power, capacity, overload controls, monitoring, and protection mechanisms. 

An independent policy server also needs advanced quota management capabilities. These allow service providers to do advanced usage tracking in the policy server for a wide variety of use cases. Examples include offloading complex charging systems and performing quota management of pre-rated data services (any prepaid or postpaid data service where the usage limits are pre-defined), postpaid customers, and fair usage in the policy server without an OCS. A policy server can accomplish this with pre-configured use cases and a user-friendly rules engine that allows policies to be deployed quickly and at a lower cost than through charging system customization.

In addition, an independent policy server must offer revenue-generating use cases for mobile data services. These offers include day passes, anniversary bonuses, happy hours and bandwidth boosts. Creating these programs requires policy and subscriber data management to meter multiple usage limits per customer and to zero-rate services based on application, time, and volume for different customer segments. Many of these services can bypass the charging system by using the rating engine and policy creation tools in the policy server. In this scenario, the monetary rating associated with a unit of data or time is pre-assigned, without the need for an OCS. 

Shared data plans are also becoming an important use case as the number of devices per customer grows and families, businesses, and machine-to-machine customers ask for simplified, pooled data plans. These plans require subscriber and device data management to assign multiple device identities to each customer profile. They also require policy analytics to track and analyze customer and group usage. 


Global service providers are adopting an approach that leverages a best-of-breed policy server with integrated subscriber data management and analytics for easy policy rule creation, quota and traffic management, and letting existing charging systems do what they do best – charge for services. They are also looking to the new Sy standard interface between policy and charging systems to ensure broad multi-vendor interoperability, eliminate costly integration and avoid lock-in. Finally, they are deploying a next generation Diameter signaling architecture to independently scale policy and charging systems to meet the demands of mobile data growth on their networks.


*Doug Suriano, CTO and Vice President of Engineering at Tekelec, has more than 20 years of telecommunications and technology experience. He is responsible for product innovation, leadership in standards bodies and industry forums, and advocacy for innovative mobile data solutions.

Doug earned his Master of Science in Information Technology at the U.S. Naval Postgraduate School and a Bachelor of Science at the U.S. Naval Academy.

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