Blockchain unwrapped as carriers and vendors gear up for demo at MEF18

Blockchain will be put through its paces during an inter-carrier proof of concept by several vendors and carriers at MEF18 in October.

Service providers CBCcom, PCCW Global, Sparkle and Tata Communications will team up with Clear Blockchain Technologies and Cataworx to show how telcos can use blockchain to enable services such as bandwidth on demand, IoT, voice, and  virtual reality.

The bandwidth on demand proof-of-concept (PoC) is significant for two reasons. From a technology perspective, inter-carrier services will expand service providers' footprints to areas that previously haven't been able to serve. The use of blockchain will not only enable new revenue streams once it's implemented in full; it will also give the service providers the ability to turn up new services quickly and more efficiently.

Blockchain is emerging out of the realm of possibilities and into the real world. A recent survey by Deloitte of executives running telecommunications, media and entertainment businesses found that 84% of the respondents believed that blockchain would broadly scale and reach mainstream adoption.

Gal Hochberg, the CEO and co-founder of Clear Blockchain Technologies, said in an interview with FierceTelecom that the telecommunications industry needed blockchain for several reasons.

"There are a lot of things happening in telecommunications today and the industry is changing and evolving," he said. "There's this underlying challenge in telecom where the product being produced is an exponential product so we want more bandwidth, more speed every day. So the complexity becomes more and more exponential, but the value captured is not. Telcos need to become not a little bit more efficient, but 10 times more efficient to be able to create the products and to create the solutions that are required today.

"Now the question you might ask is why use blockchain? You could do this through the central server. We could have every single carrier give up their contracts and terms and every single order that they've got and send them to one central place in order to collect and divvy up the money. And while that could work in theory, that requires a lot of trust on the carrier side to give up control of all of that to some external party."

Using a central server poses a cyber risk, is less efficient from an operational perspective and from an innovation perspective since other entities would be deciding how to handle service providers' billing.

The MEF18 PoC will focus on Ethernet services on demand. Cataworx will demonstrate MEF's Lifecycle Service Orchestration (LSO) Sonata inter-carrier quoting capabilities and LSO Cantata intent interfaces in order for customers to discover and order the services that cross service providers' footprints.

Clear will tap into LSO Sonata's blockchain-based billing and settlement capabilities, which allow service providers to bill for guaranteed network capacity on-demand that in turn could unlock new revenue streams on existing network infrastructure.

In the PoC, customers declare their intent via the bot-based Cataworx Community Portal. The off-net quotes are then exchanged across the Sonata Interface Reference Point as product offerings that can then be "discovered" by carriers.

The PoC uses Cantata and Sonata's inter-carrier interfaces for automation of bandwidth-on-demand product discovery, service eligibility verification, quote, order and blockchain settlement of the services. The orders are then encoded in contracts and services are automatically settled. The contracts also include provisions for SLAs and the use of private and shared blockchain interactions.

All of which will be provisioned across CBCcom, PCCW Global, Sparkle and Tata Communications' inter-connected networks. Hochberg said the POC doesn't include orchestration, but was instead designed to show the settlement and the clearing aspects of blockchain for inter-carrier services.

"In the PoC, what we're doing is we're building a new product that doesn't exist today," Hochberg said. "We aim to roll this out to live networks as well. The timing all depends on when the service providers are ready to do it.

Clear was involved in a blockchain trial that was announced earlier this year with PCCW and Colt Technology services. BT, HGC Global Communications, Telefónica and Telstra subsequently joined that trial, which focused on how the inter-carrier settlement of wholesale international services could be automated through the use of blockchain.

A clear picture of blockchain

Singapore-based Clear Blockchain Technologies was founded last year with the intention of bringing blockchain technologies into the telecom sector. While current focus is on inter-carrier solutions for telcos, Hochberg said his company could also enter the enterprise sector in the future.

Hochberg said startup Clear was funded by venture capital, but declined to say who the investors are. Clear currently has about 15 employees, but Hochberg said the company was constantly growing.

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Since service providers have yet to deploy inter-carrier services at scale, Clear doesn't have its blockchain technologies commercially deployed. Colt and Verizon, as well as Epsilon and DCConnect,  have both announced they would commercially launch two-way inter-carrier services this year. Orange Business Services and AT&T have also been active in proof-of-concept trials for inter-carrier services using MEF's LSO APIs.

One of the roadblocks for deploying inter-carrier services has been the official approval of the LSO Sonata APIs by MEF. FierceTelecom reported last month that MEF expects to have them approved around the time of MEF18, which is slated for Oct. 29-31 in Los Angeles.

Even with the approval of the LSO Sonata APIs, Clear is playing the long game since inter-carrier, orchestrated services can only occur across software-defined networks. Colt's Mirko Voltolini, head of network on demand, previously said to FierceTelecom that he could "count on the fingers on a pair of hands how many carriers that we can do this with."

"The reason we're doing proof of concepts is that this is a new concept and carriers need to get comfortable with it and they also have to see the value," Hochberg said. "What we're saying is, 'let's work together so you can see this makes sense,' and then we'll transition into a production model."