Sessions focusing on distributed ledger technology like blockchain are drawing full and engaged audiences here at Action Week, as communications service providers (CSPs) consider whether a shared blockchain-like framework is needed for the telecom industry – and if so how to build it.
Why is blockchain important for telecom?
As the internet of everything (IoE) grows, CSPs increasingly are looking at disruptive billing and settlement technologies as a way of monetizing services and verifying service level agreements (SLAs). The graphics below from a ‘blockchain sandbox’ workshop presented by John Wilmes, Director of IoE Projects, TM Forum, explain how blockchain and other distributed ledger technologies work, and how the telecom industry envisions using them to manage fraud, deliver identity as a service, enable 5G services and enable peer-to-peer connectivity for IoT devices.
Bitcoin and Ethereum are perhaps the most well-known examples of blockchain. They are both permissionless blockchains that are publicly accessible. Parties can exchange real money on these blockchains, but transaction times and costs are high, which means they likely are not a viable solution for digital ecosystems, where transactions must occur in real time with SLA guarantees.
Instead CSPs are considering private blockchains to implement SLAs as ‘smart contracts’, which are bits of code that turn difficult-to-understand, deliberately ambiguous legal agreements into simple-to-understand, unambiguous, computational contracts.
“A private blockchain is faster and cheaper but has no direct connection to ‘real’ token currency that can be exchanged on the open market for fiat currency like dollars or euros,” Wilmes explained. “So, the actual SLA settlement would have to map ‘play money’ transactions to ‘real money’ outside the blockchain, thus losing some of the advantages of smart contracts that deal directly and securely in a cashable currency.”
How to address the challenges?
In his Action Week presentation on micropayments, Emmanuel Amamoo-Otchere, VP, Industry Development & Standards, Huawei Technologies, looked at the challenges CSPs are facing as they contemplate the use of blockchain technology.
“Mobile money or payment platforms are implemented for human-centered peer-to-peer transactions,” he said. “This can’t suffice for the internet of everything scale, but there is lack of a united industry nomenclature and framework for IoE digital business and micropayments.”
Some kind of shared distributed ledger framework likely is needed for the telecom industry, but there’s no consensus about how it would be developed.
“What would be the requirements for a micropayment business model?” Amamoo-Otchere asked. “How do we build a business blueprint, a micropayment service framework? How does that impact on the current CSP business?”
Other questions center around where the blueprint development work would be done? Which standards-development organizations (SDOs) need to be involved? How would they collaborate?
TM Forum Catalyst looks at using blockchain for SLAs
TM Forum is exploring these questions as part of our work on digital trust and in our Catalyst proof-of-concept projects – Amamoo-Otchere and his company Huawei, for example, are participating in an important new project called Blockchain unleashed. The project is currently championed by four CSPs – Globe Telecom, KDDI, Ultrafast Fibre and Singtel. Along with Huawei, participants include Deloitte, Infosys and Openet. Other CSPs and suppliers have also expressed interest in joining the Catalyst this week.
The idea is to show how CSPs can use distributed-ledger technology to ensure that SLAs are complete, consistent and correct, and that their execution and settlement can be automated. In this case, the team is planning to use hashgraph, which is a third-generation distributed ledger technology. If you’re interested in participating in this Catalyst or another focusing on blockchain, please contact John Wilmes, via [email protected].