Voice over IP may spur the end of phone lines
By Hans Roeterink
Alaska Journal of Commerce
Tuesday, June 1, 2004
Television and newspapers are filled with advertisements for better, faster and cheaper telecommunications service - reaching out to consumers who are looking for lower cost telephony and higher bandwidth Internet. With the introduction of voice over IP, both desires may be fulfilled.
It may also trigger the largest write-off of telecommunications infrastructure ever seen in the United States.
Voice over Internet protocol (VoIP), or telephony over the Internet, got off to a rough start. But as Internet usage continues to shape the way we work, play and communicate, telephony becomes a logical extension.
I regularly receive Internet telephone calls from a friend in Kyrgyzstan who doesn't want to pay the high telephone rates. And business users foresee utilizing VoIP to communicate among clients and branch offices throughout the world - effectively doing away with their dependence on fixed-line telecommunications.
Time will tell, but most legislators in Washington, D.C., seem to think that a free Internet is a good thing and support legislation in that direction. As long as that condition exists, free is the right price for large and small telephony users.
Sounds like a great plan, right? Well, for those of you who have shares of telecommunication companies, you might be in for a big surprise. VoIP marks a significant departure from historical telecommunications infrastructure.
Since the time of Alexander Graham Bell, copper wire has been the basis for transmitting telephone calls all over the United States and the world. Over the years, many changes have been made to support the growing communication demand. Faster networks connect major cities and international cables were laid to connect the world.
However, in all this progress, the connection to the telephone in your home has been basically the same ever since Alexander Graham Bell figured out how to make a call. Copper cables continue to support almost all telephony services in the United States. With hundreds of thousands of miles, billions of end-points, crossed wires, unused wires and cross-connected wires, the telecommunication grid is a multi-dimensional web so complex that it is truly a wonder that one gets a dial tone reliably. Additionally, a major drawback of copper wire is that it offers limited support for Internet access - especially for higher bandwidth connections.
Clearly, copper wire cannot be the launch pad for VoIP. However, cable technology does allow for high bandwidth connections, and it is already connected to a large percentage of U.S. households.
Think about this: If cable companies begin to offer free or low-cost telephone calls, and users adopt the technology, copper wire networks would be rendered virtually unnecessary. This type of major shift could occur quickly and billions of dollars of investments in copper cables and telecommunications equipment could become obsolete virtually overnight, thus eliminating the core value of many telecommunication companies nationally and internationally. This shift is on the horizon, and smart investors will be paying attention.
Hans Roeterink was vice president of operations and chief technology officer at Deutsche Telekom in New York and has over 20 years of international experience in the IT and Telecommunications Industries. |
