FYI,
Net Telephony Poised To Connect With Consumers
(12/08/97; 9:00 a.m. EST)
By John Borland, Net Insider <Picture>For years, Internet telephony has been a poor relation of mainstream Net technologies, languishing as an favorite topic of eccentric hobbyists and a small group of evangelists.
But the technology is finally nearing the point where it can compete with traditional telephone service. And with a spurt of announcements last week and several more expected this week at the Fall Internet World convention in New York, Net telephony companies are hoping to take advantage of the show's spotlight to give their technology a new burst of momentum.
"We see a tremendous market for Internet telephony," said Stephen Loudermilk, a Lucent Technologies spokesman. The company has just started shipping a server designed to handle online voice transmission and will be demonstrating it at Internet World, he said. The company has three large clients already using it on a trial basis, Lourdermilk added, and plans to expand that number significantly in 1998.
The scale of the market for the technology is finally emerging. Killen & Associates estimated early this year that the market for Internet telephony could reach $63 billion by 2002. And as the potential for profit emerges, as well as the potential threat to their traditional businesses, the big telephone companies are starting to get involved.
Until recently, however, the quality of Net telephony has been its primary flaw. Its advocates have long touted the enormous savings that users could realize by using Internet lines for voice conversations, particularly for pricy international calls. But demonstrations of the technology, which often sounded like a bad cell phone, took the air out of the sales pitch.
One of the key problems has been in figuring out how to make sure that that voice transmissions take priority over the data streams being pumped over the same Internet lines. The technical problems with breaking information into bite-sized packets, transmitting them separately and recombining them at the endpoint have largely been conquered for ordinary data. A voice conversation drops sharply in clarity and quality when broken up the same way and forced to compete with other data packets, however.
But several companies now are working on new methods of prioritizing or routing voice-transmission data, enabling the quality of the network audio to improve.
One of these companies, which hopes to use Internet World to forge connections with customers, is Network Telephony Systems. "We're considerably better than Internet or cell-based telephony," said president Bill Perren.
Network Telephony Systems uses its own technology to send voice transmissions over partner company Infonet's existing global network. This gives any multimedia computer user with an ISP using Perren's company's service the ability to call any another ordinary telephone in the world though their PC.
Perren's company will be demonstrating its technology at Internet World and seeking to cement new relationships with ISPs. The company has about 100 ISPs signed up to provide voice-connections services to their subscribers, about 75 percent of these in the United States, he said.
The company originally intended to keep close to three-quarters of its ISP partners in North America, he added, but since international phone rates are considerably higher overseas, the company will likely focus more heavily on the overseas market than it had planned.
AT&T, along with VocalTec, one of the leading telephony technology companies, is backing ITXC, which said last week it would launch a global cooperative network by April to let Net users speak to each other without dealing with separate companies. Deutsche Telekom recently invested heavily in New Jersey-based VocalTec, boosting its stock and giving it considerable credibility in the marketplace.
Lucent -- the company once known as AT&T Bell Labs -- makes hundreds of millions of dollars producing the computers that govern the existing phone networks. But company officials -- who have been experimenting with network voice technologies since the mid-1980s -- say they, too, are embracing the world of Internet conversation.
But more questions will have to be answered before the technology can come anywhere close to widespread adoption. The Federal Communications Commission has yet to decide on a regulatory scheme, which could make the difference between sky-high profits and failure for the budding industry. |
