Philip,
Pleased to meet you.
>>The Internet will carry more communications traffic than conventional telephone voice circuits in the United States by the end of this year.<<
At this stage of the game, these kinds of assessments still appear to me to be wild ass guesses, IMHO, as I will attempt to briefly explain, in a little bit.
If you include conventional data services that have already moved over, I thought that this was already the case, or approaching crossover, soon. But I may be missing your point here. The way the statement is structured... it seems incongruous to me, for some reason. Are you comparing all internet service traffic against today's conventional telephone voice traffic? If so, why?
>>The shift from conventional voice to "packet switched" data was occurring far faster than is generally realized by anyone, including the government and the major telephone companies.<<
This I _believe_ may be true, but I am not sure. Again, however, there appears to be some apples and oranges mixed into this pile. Notwithstanding, this is why I feel that we may see the President and the FCC having to eat crow at some point, sooner, rather than later, concerning their stated policies of forbearance where Internet regulation is concerned. They have miscalculated the rate at which the shift is taking place, and what the implications on subscriber rate splits and universal services will be. This is funny, in a way. Why should we have ever expected that the federal government should have an accurate handle on this, when the service providers themselves are lost in the woods trying to figure out just how much of their traffic is first-time cut-through (successful transmissions) or second, third or 'nth time re-starts. Never mind the spam, the runaway links, the idle data streams spewing from university sites 24 hours a day, network management (SNMP) broadcasts, chattering router ports, etc.
Gotta laugh about this one a little. Effectively, when we compare today's conventional voice services on the PSTN to the cacophony of internet traffic it's like comparing a serious golf tournament to professional wrestling. Sure, that'll change, but it isn't there yet. One is efficient, from a stacking perspective, within the constraints of its inherent limitations, and the other is ostensibly less costly (using the established rules of measure), but entirely unpredictable.
Private IP backbones? Well, that's another story, but then we are no longer talking about the Internet. When we use private links, we are merely using Internet Protocol as a substitution for PCM on inter-office trunks.
>>By the time they (regional Bell telephone companies) react, they may find the Internet service providers have the traffic," he told a forum of the MIT Club of Washington.<<
I disagree with this point for a variety of reasons. On the surface its fun to bash the incumbents, but lets put things into their proper perspective when the laughing and cajoling is over. It appears to me that this assessment of the LECs may not consider several crucial factors. Let's take a look at just a couple of the more obvious ones.
For starters, the RBOCs traditionally have not provided the types of services that the ITSPs are going after, in the main. The ITSPs are going after Long Distance, primarily. The RBOCs do Local, despite their ambitions to do LD. In order for ITSPs to flourish in the short- to intermediate- terms (and maybe the longer term as well), they must *depend* on the RBOCs for last mile legacy services - consisting of both copper lines and subscriber data bases, at a minimum.
In fact, when at least one terminal device on a VoIP call is a POTS phone, the ITSPs (even those using cable modems) would be dead in the water without RBOC last mile copper attachments and directory number lookups, which, in turn, are responsible for the mapping of a call to its intended recipient, or the called party.
Explanation: The BOCs currently _own_ and control the "local" subscriber data bases needed to home circuits to the intended party. The ownership aspect is being contested, but you get my point. These data bases have a lot of other uses, but the homing aspect is the one I am focusing on. This may have little bearing when a call is being placed from PC to PC, but it plays a determining role in completing calls that are placed from a PC to a POTS phone, or from a POTS phone to another POTS phone, via gateways.
At best, ITSPs would be left to develop their own directory data bases (which some are already getting into) if they are to fend for themselves without the (albeit reluctant) "assistance" from the LECs, but the operations support systems (OSSs) that are needed for local number portability and advanced-information-network services, or AIN, will still be lacking. Without these capabilities, the ITSP is relegated to the role of a very inexpensive tie line provider. Where this suffices, all is well and good, and the user saves a bundle. But when 800 numbers get into the picture, or if an ITSP link is incorporated into a larger mix of remote-homing SO/HO services, say, it has tremendous shortcomings that will take time to overcome unless the requisite hooks (called A-Links and associated hosts) are provided to the SS7 cloud.
This is where the more advanced players' SS7 hooks (along with those from a handful of smaller VoIP players that we've posted recently) come into play. While I'm on this topic, this is where the embedded voip algorithms and codec/vocoder code loaded into DSPs in remote access servers come into play, as well (made by Ascend, 3Com and others). But even in the latter RAS example, it is assumed that the end user has to first dial up a remote access device in order to connect to a cloud provider, and the mere fact that the user is "Dialing UP" ensures that the RBOC still has a place in the overall scheme of things. Some may argue that that is only a few pennies. What are we talking about when we discuss VoIP? Free, to a few pennies per minute, at best, by the time this message is one year old. Say what?
I think that this emerging environment could also foster the inauguration of a new set of billing elements by the LEC to offset costs that were heretofore "bundled in," they can argue. For example, they could argue that the caller should be billed a premium each time a data base is "dipped" into for the completion of a local or long distance call, as in when you attempt to complete a call in a LECs area with a non-LEC-provided, or "foreign," network device. Sounds far fetched? Not at all. We've been to this place before, and I think that we could wind up seeing it again. It depends on which fork in the road the LECs take, whether they enter the voip full bore (more on this in a moment), or if they resist it entirely, with gradients in between.
Let me ask everyone here: Would you give away data for free if it had crucial value? Or if it cost you plenty to administer and maintain? We're talking about glass house data centers here. This is exactly what the LECs do now, they in a way "appear: to be giving it away for free in the local market, because it was always one of those invisible bundled elements that was taken for granted, but this could change if their backs are pinned against the wall. They may exercise a play that takes advantage of the "appearance" of it being given away, and begin seeking permission to charge for it. This would be in line with the terminating and originating charges currently assessed to LD carriers, but only on a local scale.
One last point about the alleged sluggishness of RBOCs. This is 1998, it is not 1983 or 1941. It would take very little effort for a current day BOC or any LEC at this point to organize an autonomous subsidiary or operating unit to deploy VoIP in an "unregulated" environment. What's good for the goose...
In fact, this is perceived to be a potentially ingenious way for them to sidestep the cumbersome, and some would argue, unreasonable, restrictions that have been placed upon them, preventing them from entering the long distance market place.
Better still, it would be even easier for one of them to acquire an ITSP, outright, and forego the headaches of internal *organizational turmoil,* which accounts for a good part of the time that these aircraft carriers need to turn around. If a Bell Atlantic or an SBC bought an ITSP today, they would be hard to touch from a marketing and services standpoint. From the looks of USWest's !nterprise unit, it appears that they are headed in this direction already.
The RBOCs already have the critical mass components necessary to justify the expense of building the high speed backbone, i.e., they already have the automation, and more importantly, they already _have_ the_CUSTOMERS!
There are many arguments and assertions that academics, pundits and practitioners can, and often do, raise. Obviously, they are not always right. Some statements are made in a speculative and "what if" manner. Some merely sing to the choir for fill. But when the rubber hits the road there are no what-ifs, only that which exists and that which will take time to develop. And despite all of the excitement and exuberance over VoIP, yours truly included, it's going to take more time than we'd all like to admit for a complete substitution to take place, from a quality of service perspective, and from the standpoint of reach and service extensibility that we all enjoy today.
It will have been worth the wait when we get there, and it will be lots of fun getting there. And it will be profitable, hopefully, for those of us who invest in it now.
Regards,
Frank Coluccio |
