As network operators increasingly move to all-IP networks, voice over IP (VOIP) peering is emerging as a way for them to connect calls without using the public switched telephone network (PSTN), according to a new report from Light Reading's VOIP Services Insider.

    VOIP peering was designed to eliminate VOIP "islands" by creating a place where service providers can interconnect their VOIP networks without ever traversing the PSTN.

    The adoption of peering will result in reduced costs from lower interconnection fees and improved quality of service (QOS) for VOIP calls due to the elimination of translations that happen when IP calls pass through the PSTN, notes Denise Culver, research analyst with Light Reading's VOIP Services Insider, and author of the report.

    "Doing so further optimizes the quality of IP voice calls by eliminating unnecessary voice-to-IP translations and enables carriers to eliminate additional termination charges," she says.

    While VOIP peering will continue to interest carriers primarily as a way to lower costs or improve call quality, there are several other benefits to the technology. Culver writes, "Carriers of all types will continue to seek ways to avoid the costly PSTN while also interconnecting with new service providers and developing services beyond VOIP, including video, gaming, and multimedia collaboration."

    While VOIP peering will be of interest to telcos like BT Group plc (NYSE: BT - message board; London: BTA), Deutsche Telekom AG (NYSE: DT - message board), and KPN Telecom NV (NYSE: KPN - message board) -- all of which have announced plans to move to all-IP networks -- other groups are exploring the technology as well. Cable companies and enterprises are also taking a serious look at VOIP peering as a way to facilitate communications and lower costs.

    Culver writes that cable industry research arm Cable Television Laboratories Inc. (CableLabs) has been exploring options for a national peering fabric since November 2005 and "is rumored to be working on a registry for its peering community."