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Welcome to IPTV Magazine!

Our mission is to identify and explain the technologies and applications that allow television services to be provided through Internet Protocol (IP) data networks.  Readers learn the options and the system to implement IPTV along with new features and applications and business opportunities that are available in the IPTV industry today.







Billing Systems


Billing systems are composed of interfaces (Network, Marketing, Customer Care, Finance, etc.), computers, software programs and databases of information. Computers are the hardware (computer servers) and operating systems are used to run the programs and process. Network interfaces are the hardware devices that gather accounting information (usage) from multiple networks, convert it into detailed billing records, and pass it on to the billing system. Billing systems databases hold customer information; usage call detail records, rate tables, and billing records that are ready to be invoiced. 

The key functional parts of a billing system include creating usage records, event processing, bill calculation, customer care, payment processing, bill rendering and management reporting. In addition to the basic billing system functions, billing systems share information with many other business functions such as sales, marketing, customer care, finance and operations.

Billing charges are determined by events that occur in a communication system. Billing events can originate from many sources: a media gateway, a media server, a content aggregator or a visited partner's network and they must be converted into a standard format. 

This article is Part 2 of a 4 Part Series

IPTV Billing Series Article List 


Introduction to IPTV Billing  Oct-05
Billing Systems Nov.05
Billing Standards Dec.05
Measuring Service Usage Jan.06

A typical billing process involves collecting usage information from network equipment (such as media servers, access devices and set top boxes), translating and formatting the usage information into records that a billing system can understand, transferring these records to the billing system, assigning charge fees to each event, creating invoices, receiving and recording payments from the customers.

Figure 1 shows an overview of a billing and customer care system that can be used for IPTV communication services. This diagram shows the key billing steps. First, the network records events that contain usage information. This example shows that billing information usually includes a user identification code, service request date and time, destination address, source address, media type, usage duration or amount of service that is provided. Next, these events are combined and reformatted into a single usage detail record (UDR). Because these 

Figure 1, Billing and Customer Care System 

events only contain network usage information, the identity of the user must be matched (guided) to the event detail record and the charging rate for the service must be determined. After the total charge for the service is calculated using the service rate for that particular user, the billing record is updated and is sent to a bill pool (list of ready-to-bill usage records). Periodically, a bill is produced for the customer and as payments are received, they are recorded (posted) to the customer's account. The charge is then "journalized"; i.e. it is assigned a financial account.

Event Sources and Tracking

Events with regard to a billing system are measures of network or media usage. Events can be stored in a storage device (data collector) for transfer at predetermined time intervals, when a specific value has been reached (event trigger) or when the billing system requests the information (called polling).

Some common IPTV event sources include: access requests to media gateways, multicast routers, application servers or the use of the media content itself. Media gateways are devices that convert media from one format (such as satellite digital video) to another format (such as IP video). Media gateways can identify the time a service is requested and ended. Multicast routers are intelligent switches that can copy and forward packets to multiple destinations based on requests to join multicast groups. Multicast routers can track the time a user has 

requested to join a group (such as to watch a television program) and the amount of data that is routed between two ports over a period of time. Application servers are computers that process information at the request of a customer (called a client). Application servers can track the beginning (launching) and termination of an application. An example of an application may be the user's selection of an item or a link on an interactive advertising message. The usage of media files themselves may trigger the sending of event information. For example, if a registered stored video file is played, this may trigger an event message that is sent to a predetermined server so that the usage of the media file can be recorded.

It is also possible for IPTV systems to have multiple accounts that operated on the same access device. While the access device (such as a set top box) may have a unique physical address (MAC address), each user must be identified by other unique information such as a removable identification card (e.g. SIM card) or login identification and password codes.

Figure 2 shows how it is possible for multiple accounts to be serviced by the same access device (such as an IPTV set top box in this example). This example shows that a television is shared by three roommates who each have their own IPTV account. Each user uses an access code each time they want to obtain access to premium content. The billing system is able to differentiate between users based on the login access code (account ID) rather than the unique network address of the physical device.

Figure 2., Unmanaged IPTV System

Figure 3, Usage Detail Record (UDR) Processing Operation 

Mediation Devices

A mediation device is software or equipment that filters information and insulates the enterprise applications from the network elements. As such, the mediation device receives, processes, and reformats usage information in a communications network to a suitable format for processing by one or more billing and customer care systems. This processed information is either continuously or periodically sent to the billing system. Mediation devices are commonly used for billing and customer care systems as these devices can take non-standard proprietary information from switches and other network equipment and reformat them into messages billing systems can understand. 

Switches usually record usage information (e.g. service connection time) in a format that is often proprietary to the manufacturer of the network device. Each record may be variable length and several events (e.g. media types) may be recorded in the same system for a single service. 

There are other network parts or devices that may be involved with providing a service or providing value added services (VAS). These devices also produce event detail records yet in different formats.

Usage Detail Records (UDRs)

Billing information regarding specific usage events resides in usage detail records (UDRs). UDRs hold a user identification code (who), origination address of the device (this may indicate the user), time of 

day the usage was provided (when), the usage type and its details (what), the duration or quantity of the service (how much), the connection location(s) of the service (where), and the cause of event recording (why). UDRs hold billing record information about traditional services (such as television viewing) along with non-traditional services such as information services that are provided by other companies.

Figure 3 shows the general process that is used to identify and rate (bill) a service. This diagram shows that a usage detail record evolves as it passes through the rating process. In the first step, all the events for a specific service are combined and adapted to a common format. The usage detail record is then guided to a specific account. Using the account identification code, a rate plan is discovered the unit (usage) and/or fixed amounts (per event) charging rates are gathered and calculated. The new information (rate plan, usage charge amount) is added to the usage detail record and it is moved to the bill pool, as it is ready to be billed.


Incollects are billing records that are received by service provider A from service provider B for services provided by B to A's customers. An example of an incollect is a billing record for the viewing of a movie that was provided via another network.

Data Communication

Data communication is the transmission and reception of binary data and other discrete level signals that can be represented by a carrier signal that can represent the discrete level (usually on-off levels) for signal transmission. Data communication providers have networks and transmission lines that can cover relatively large geographic areas.

Data communication services include basic access transmission fees and information processing (storage and hosting). Transmission services may include transmission rates, guaranteed quality of service levels and data transmission quantity levels. Basic access fees may include a physical connection (such as a DSL line) and an Internet access fee. Some data transmission services may come with a guaranteed quality of service level that may include minimum data transmission rates and packet loss rates.

Data processing fees may include data storage, account hosting and other network configuration charges. Data storage fees may be in the form of Megabytes (MB) or Gigabytes (GB) stored. Hosting fees may include domain management (address mapping), maximum 

Figure 4 shows typical data communication services providers typically bill for data transmission and data processing services. This diagram shows that a data subscriber is billed for basic data access service and additional levels of transmission service that may be provided including higher speed access, guaranteed quality of service (QoS) and amount of data transferred. This example shows that the data communication system routers and servers create event records that re combined to produce billing records. 


Telephony is the use of electrical, optical, and/or radio signals to transmit sound to remote locations. Generally, the term telephony means interactive communications over a distance. Traditionally, telephony has related to the telecommunications infrastructure designed and built by private or government-operated telephone companies.

Telephone systems maintain connections between predetermined points in a communication network (telephone lines). Telephone systems interconnect through many systems and locations throughout the globe. 

Telephony services may include local, long distance, international, toll free (freephone), prepaid, calling party pays (CPP) and other types of voice communication services. Customers typically pay for telephone service that is a combination of a basic access fees and usage fees. 

Figure 5 shows typical telephony services include access and network services. Basic access services include telephone access to local and long distance networks. Network services include toll free (freephone) access, prepaid, and calling party pays services that may be originated in other systems. This diagram shows that telephony communication services requires interconnection to a variety of public telephone communication providers and that a single usage record may be created from usage events from many different networks. To settle call charges through these networks, billing records are sent to a clearinghouse.

Figure 4, IPTV Data Communication Services


Invoicing is the process of gathering (aggregating) and adding up all of the billing records associated with a specific account during a billing cycle in bill pool, applying recurring charges (e.g. monthly charges) and totaling all the charges. 

The invoicing process typically starts by gathering all of the billing records for a specific customer from the bill pool that occurred during a specific time period (the billing cycle). These charges are converted into a form that can be displayed on the invoice (such as movies viewed or total minutes used). As the records are gathered from the bill pool, they are either transferred, deleted or marked as invoiced so these billing records are not used again. 

After all the billing records during the billing cycle have been gathered, additional charges and credits such as monthly fees, taxes and billing adjustments are added to the invoice details. All the charge details are then totaled to complete the invoice. 

Figure 5 shows the basic invoicing process involves creating an invoice record and aggregating usage records from the bill pool into a billing detail or summary section. As usage records are gathered from the bill pool, they are removed or marked to keep them from being transferred again. Additional non-usage fees (e.g. monthly service fees) and taxes are added to the invoice record. The information is then totaled to provide the customer with total amount due for this invoice.


Bill rendering is the conversion of billing information into a form that a human can view, hear or sense. Some of the options for bill rendering include bill printing, sending invoices via email, electronic data interchange (EDI), stored media, providing billing information via audio announcements by an interactive voice response system and web billing. An example of bill rendering is the conversion of a billing invoice into an image that can be displayed on a computer monitor.

Bill printing may be performed by a service bureau that specializes in printing and mailing invoices. Invoices may be converted into an electronic format that may be sent via email. Invoice emails may be in text only or graphics (HTML) formats. Invoices may also be formatted into an electronic data interchange (EDI) format that allows for the direct transfer to customer's computers. A common EDI format is extensible markup language (XML) and the use of EDI files may allow easy entry of invoices into the customer's accounting system. It is sometimes requested that detailed billing records be provided on stored media such as magnetic tapes and CD ROMs. 

Billing systems may use interactive voice response (IVR) systems to allow customers to call in and receive audio updates about their billing status. The use of IVR systems can dramatically reduce the amount of calls handled by customer service representatives (CSRs) as many of the calls are billing related questions. Billing systems may be integrated with web servers to allow for web based billing. Web billing is the integration of an accounting system with Internet web systems

Figure 6, Billing Rendering Options

Web billing typically allows customers to view and possibly pay invoices through a web site. Web billing may have real time or near-real time (delayed) posting of customer transactions with the accounting system. 

Figure 6 shows some of the different options available for bill rendering and distribution. This example shows that bills can be printed and mailed, created in text form and emailed, converted to stored media such as CDROM or tape, can be formatted for web viewing or converted to a standard EDI format to be directly sent to a customer's computer server.

Customer Care

Customer care is the processes and communication that occurs between customers and companies to enable customers to resolve problems and successfully obtain products and services from the company. 

Customer relationship management is the process or system that coordinates information that is sent and received between companies and customers. CRM systems are used to schedule activities, allocate resources, and help control the sales activities within a company.

Payment Processing

Payment processing is the tasks and functions that are used to collect payments from the buyer of products and services. Payment systems may involve the use of money instruments, credit memos, coupons, or

other form of compensation used to pay for one or more order invoices. Payment options include cash, check, credit card, paypal, credit memos, coupons and electronic funds transfer (EFT).

Payment processing can be complicated as the receipt of funds is typically applied to specific invoices or on account and the payment method may not include the invoice or even the account number.

Cash and checks may be received at company locations or at authorized agents. Credit card payments are processed through merchant processors who charge a fee (typically 1.5% to 4%) for the processing of transactions. Customers may apply credits (credit memos) or coupon codes to be applied as a portion of their payment. Customers may also use electronic funds transfer (EFT) to directly transfer funds.

Figure 7 shows some of the different options available for bill payment. This example shows that customers can make cash payments to a company office of authorized agent, can send checks to the company, can pay via credit cards, via a 3rd party financial processor (e.g. paypal) or through electronic funds transfer (transfer fund). This example shows that payments on account are applied to specific invoices and when the invoices are paid in full, they are marked as pay and are not available for additional payments to be applied. 

Billing Reporting

Billing reporting systems provide information about specific events (such as call or service usage) or summary information that allows management to make decisions about products and services such as product management, fraud management and revenue assuran

Figure 7, Bill Payment Options

Product Management

Product management is the process of assigning and tracking specific tasks and functions related to ensuring the success of products or services.

Fraud Management

Fraud management is the set of processes and steps taken to identify, minimize and correct the unauthorized use of products or services.

Revenue Assurance

Revenue assurance is the process of reviewing processes, systems and data that are associated with revenue streams to ensure billable services are correctly recorded and collected. A revenue stream is source of money or value received that is associated with the sale or providing of services or products or can be associated with a specific type of sales or marketing process. 

Billing Service Bureau

A billing service bureau is a company that provides billing services to other companies. The services provided can range from billing consol-

-idation to complete billing operations that include gathering billing records, processing invoices, mailing or issuing the invoices, and posting payments.



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