Interconnection and regulations were quickly imposed and are crucial as customers do not need to have subscriptions to different networks to be able to communicate with one or the other due to ongoing litigation. As a result of these disputes in some countries, network operators have decided to hamper interconnection by decreasing quality and increasing tariffs. As a result, residents of these countries saw it as a necessity to have different SIM cards for each carrier just to be able to call the others. This not only increases costs for customers, but also eliminates the possibility of making free calls. “According to ITU surveys, connectivity issues are considered by many countries to be the most important issue in developing a competitive market for telecommunications services… (Intven et al. 2000) Today, it is necessary to have an interconnection agreement, which essentially means a company contract between two telecommunications organizations to connect their networks and exchange data traffic. These agreements are widely used both in the public switching network (PSTN) and on the Internet. The public network is a billing charge based on the origin, destination, time and duration of the connection, unless it is removed by the network operators. However, Internet calls are generally more difficult to define and regulate with free peering. Connecting via the Internet is often referred to as “peering” or “peer-to-peer,” which means that users of different Internet networks or VoIP providers can communicate with each other.
The different VoIP providers enter into a mutual agreement to enable this feature. An interconnection contract within the Internet is usually referred to as a peering agreement. Connection agreements are typically complex contractual arrangements that include payment systems and schedules, routing policy coordination, acceptable usage policies, traffic balancing requirements, technical standards, coordination of network operations, dispute resolution, etc. Legal and regulatory requirements are often an issue. For example, network operators may be legally compelled to connect with their competitors. In the United States, the Telecommunications Act of 1996 prescribes interconnection methods and compensation models for interconnection. .
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