John,
In my view, VoIP can only be discussed comprehensively if one has the time to partake in a lot of different, and sometimes mundane, conversations.
(One such discussion can be found in the March '99 Cook Report whose preview and url are posted at the bottom of this message.)
It's not something that can be characterized as monolithic, as, say, T1-derived voice services which are switched over the traditional PST: Plain Old Telephone Service, or POTS, for short. The POTS model is clearly defined in the rules books, with the precision of a grammar school multiplication table. Hence, POTS is also accepted on a universal basis, without exception.
VoIP, on the other hand, is a mix of new and old tricks, adapting old habits to a new medium, with some tricks that work well, and many that don't work well, yet. The IETF and the ITU are now working more closely together to resolve the shortcomings that exist in this regard, but they are nowhere near resolution on many crucial issues. (The Cook Report preview below amplifies on some of these differences.)
At first, some of these VoIP "tricks" will merely (in some cases, already) mimic certain components of the POTS model. Over time, VoIP constructs will gradually begin to supplant those of the PSTN, while alternately morphing with other PSTN elements, in other respects.
>>I'm just more pessimistic than many, I guess, when it comes to voice, about how quickly we'll get there for the general consumer<
Consumers already have a number of services at their disposal that employ variations of VoIP, some wittingly, and some not, and they will increasingly select among these to satisfy discrete requirements prior to VoIP becoming a widespread default platform for everyday voice.
Traditional domestic LD over the PSTN [not VoIP] is getting cheaper, and some would argue better, with time. So, Domestic LD will lag behind International LD in the use of VoIP. When it does begin to emerge on the domestic front, it will not be because domestic VoIP will necessarily be cheaper than the traditional POTS (during the near term), but for reasons that have to do with a new default platform selection at some point in time. This will likely take place within the 5-7 year time frame you suggested.
The real money maker for SPs who use VoIP at this time is still in the International sector, but again, I doubt if I'm telling you anything new here. This sector will prove to be a veritable gold mine for some providers, and it may last as long as another five, OR, it may vanish quickly if the foreign PTTs do a rapid turn around by dereg'ing themselves, or otherwise privatizing their common carrier industries.
Some Browser-based e-commerce sites have already begun to adopt voip, as well, as a means of integrating service attendant voice communications with Web based catalogs and other uses. Some of these include customer services, online support, face-to-face interviewing, real estate sales icw demo-ing, etc. Again, this is nothing new from a disclosure standpoint, although I've not personally been impacted yet for want of such services of my own. [Has anyone here a different set of experiences or views on this?]
The initial inroads to be made in domestic VoIP from a revenue perspective (where service providers are concerned) will not even be apparent to end users at first, since users will continue to use their same ole black telephones in the same ole mode they've been accustomed to all along. It's in this space that non-traditionals may make their greatest impact, as integrated parts of the whole. Before we reach this point, however, there is a great deal of harmonizing to be done between the IP stack and that of the ANSI/ITU's SS7/C7, and directory services, to name just two areas.
In other respects, the VoIP stack will be deployed by service providers in order to realize margins of economy that have nothing to do with the last mile at first, rather they will have everything to do with core network transport and the integration of their administratives, and as a means of preparation for migrating to the inevitable next gen Internet-based platforms.
This is still a very tenuous area for the providers, because no one is saying with any conviction just when the break point will be, if in fact such an event could ever take place, but this is how large service companies have come to think over time. This one fact alone has everyone concerned about jumping the gun and being left behind with yesterday's technology. Literally.
Again, arbitrage over domestic rates is getting tougher to justify, so fewer new entrants are materializing in this space than was originally thought to be the case (despite the flood of press releases to the contrary). The reasons for this reduction stem from the upper tier carriers responding to the new "threat" in two basic ways:
(1) they've responded by reducing their per minute costs over traditional facilities, as a stop gap measure for now, and
(2) they've written their own VoIP intentions on the wall. This has had the effect of providing the newbies with ample notice as to what they could look forward to down the road. This space was once thought of as a safe haven for startups. The reasoning behind this was the notion that the majors would never enter VoIP, they thought, or it would take another five or ten years. In contrast, today we see every cable company and even the staunchest of conservatives, T, diving in head first. Now, the new aspirants feel that if they enter this space it will inevitably lead to competing with the majors. And the minors, in this sense, could never compete on the economies of scale of a T, FON, or WCOM. (Although, I'm still waiting to see what UUnet/MCIWCOM is going to do in this space.)
The Cook Report url I referenced above is at:
cookreport.com
A preview of the article follows (you must be a subscriber in order to receive the full report):
First, some background information to assist in the reading, taken from the Level 3 site, since they have the most to gain or lose, at this point, and they have served as the catalyst for many of the initiatives now on the table:
l3.com
The Technical Advisory Commitee (TAC), formed by Level 3 includes leading communications software and hardware companies. The TAC recently designed new protocol standards that will allow seamless integration between circuit-based public telephone networks (PSTNs) and IP-based networks. This new specification, known as Internet Protocol Device Control (IPDC), will accelerate the development on new Internet-based products and services and is currently under review by industry standards setting organizations.
On November 16,1998, Level 3 announced the merger of the IPDC technical specifications with the Simple Gateway Control Protocol (SGCP), which was developed by Bellcore and Cisco Systems. The merger specifications, to be called the Media Gateway Control Protocol (MGCP).
The MGCP specification is available without a fee to service providers and hardware and software vendors interested in implementing it in their networks and equipment. MGCP enables external control and management of data communications equipment operating at the edge of emerging multi-service packet networks - known as "media gateways" - by software programs, which are known as "call agents" or "media gateway controllers". Examples of media gateway devices include voice over IP gateways, voice over ATM gateways, modem banks, cable modems and set-top boxes, soft PBXs, and circuit cross connects.
A draft of the MGPC specification was recently submited to industry standards setting organization. View the articles below for more information about these specifications.
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From The March 1999 Cook Report:
Extending The Reach Of Internet Telephony
Francois Menard Explains Player's Strategies Describes Wide Range Of Market Of Approaches & Protocol Development Designed To Leverage Differing Infrastructures pp. 1 - 5
Francois Menard of Mediatrix discusses a range of issues involved in the current state of IP telephony. In his discussion he makes a useful distinction between session initiation protocols and device control protocols (for example Level 3's IPDC protocol which has since metamorphosed into MGCP).
He points out that these protocols are useful for "replicating the exact behavior of the PSTN on the Internet. In other words, if all you want to do is clone the behavior of the PSTN and try to sell something that's equivalent to that by having it ride on top of a network using TCP/IP for transport, then all you need is a device control protocol. That's really what I define as IP telephony." "By having something in software that looks like a telephone switch, you can make a remote-controlled, IP telephony end-point in the network, benefit from the same type of telephone number routing that currently exists on the PSTN."
Menard contrasts IP telephony with what he considers true Internet telephony which is just one more service on the Internet, saying: "so why should it suddenly be sold and billed to the customer as if it were conventional telephony? It's a fundamental belief of mine that replicating the behavior of the PSTN on the Internet has a business model that is fundamentally incompatible with Next Generation Internet Services. On the Internet you bill for quality of service and services behind application servers. On the Internet, you cannot bill by the minute for doing nothing more than routing a telephone call to someone."
Menard foresees three different solutions for three different potential deployments. H.323 for legacy H.32x networks, Device Control like MGCP for those environments where users are happy with a third-party remote controlling their telephones and SIP for Next Generation Internets.
Some legacy telcos may have enough invested in H.323 to justify (in their minds at least) building and operating the third network that it requires. Menard also expects that "device control from a centralized call control entity will find its own acceptance in the marketplace. As an owner of LAN telephony devices, you may want to let your carrier control these devices. This can be referred to as "outsourced call control". He finds that SIP will be the protocol of choice for those who want to do true internet telephony over next generation Internets. In addition to letting third parties control your telephony systems, any time that an Internet telephony or IP telephony application has to deal with the PSTN, you will wind up having to deal with MGCP which can become a migration path to true Internet telephony. With IP telephony the network operator is in control. But with Internet Telephony the end user controls.
Menard goes on to talk about Videotron's modernization of its cable network that will allow it using MGCP to offer IP telephony as part of its cable services beginning late this year. Cisco is pioneering a new business model by building the network for Videotron in return for a share of the profits. The exact numbers are kept confidential, but a Montreal newspaper called Les Affaires disclosed that the deal was a cut on the service over a 5 year, renewable period.
In Videotron's case, its IP telephony will be sold like conventional telephony services. When Videotron has competition from traditional ISPs who will eventually gain access to Videotron's infrastructure, [the CRTC, Canada's FCC, has a proceeding for third-party residential access to cable], Videotron will be likely to be forced into selling IP telephony as just another Internet service.
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Regards, Frank Coluccio |
