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By Ellen Muraskin  |  Posted 2004-06-28 Print this article Print

New end runs around incumbent local exchange carriers: The latest U.S. Solicitor Generals Office ruling upheld the incumbent local exchange carriers (ILECs) release from having to rent access to local lines at a discount. This gave the new competitors—and the MCIs, Sprints and AT&Ts—more reason than ever to circumvent TDM phone lines. Indeed, AT&T wasted no time after the ruling in announcing it will stop marketing local service in seven states. Somebody please explain to me why the ILECs should be happy to have gotten what they wished for, because alternate routes to the customer are proliferating. Best publicized are wireless telephony and cable. Theres fiber-optic cable being laid by municipalities, who own the rights to dig up the streets, connect up their police, fire, schools and town offices, and incidentally become carriers to businesses. Theres a growing proliferation of Wi-Fi hot spots. Just this week the city of Rio Rancho, N.M., announced the launch of a citywide 802.11g hot-spot network, to ultimately cover 103 square miles, and, it said in its release, "offer unprecedented high-speed wireless data access to the Citys 58,000 residents and its hundreds of business, government and civic organizations."
Then theres WiMax, a fixed-wireless solution to cover 30 miles worth of subscribers per base station. "Just wait till WiMax gets here," says Grey, predicting more opportunities for competitive providers, and more customers for Verso.
Voice over Wi-Fi still has some bugs to work out. Click here to read more. Enterprises become carriers: But the latest crop of competitive carriers may fare no better, in the long run, than the CLECs of the overheated late nineties. Peter Bernstein, president of Infonautics Consulting, of Ramsey, N.J., says the latest startups will founder because the incumbents will force the FCC to regulate them. Forced to pay federal and/or state taxes and universal service fees, they will lose their price advantage. I think that certainly—as with all things sold over the Web—the irrelevance of their switches physical location makes for very cutthroat competition among VOIP newcomers. This is particularly true in the BYOB (bring-your-own-broadband connection) model of VOIP being pitched to small businesses. The softswitch/server platform thats routing my IP calls and serving me my Web-configuration GUI could be anywhere. But Bernsteins news for softswitch vendors is not bad. On the enterprise WAN, he points out, such regulation will be unenforceable. Regulators will not have rights or means to see into the packets of private data networks. So the softswitch and feature server companies (those that replicate and improve upon the calling features running on TDM switches) may make out by selling to multinational corporations. These companies will drive voice over their WAN to all their branch offices around the world, undetected. And if theres no regulation? Multinationals could lease their IP networks to other companies, becoming carriers. The model has precedent: Equant, now a subsidiary of France Telecom, has a network originally formed for SITA (Societe Internationale de Telecommunications Aeronautiques), a group chartered by the United Nations back in 1949 to provide data networking for 11 international airlines. Check out eWEEK.coms VOIP & Telephony Center at for the latest news, views and analysis on voice over IP and telephony.

Ellen Muraskin is editor of's VOIP & Telephony Center. She has worked on the editorial staff at Computer Telephony, since renamed Communications Convergence, including three years as executive editor. Muraskin's work has also appeared in Popular Science magazine and other publications.

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