Covads Business VOIP: A Different Model

By Ellen Muraskin  |  Posted 2004-08-12

Covads Business VOIP: A Different Model

Covad Communications announced the launch of its enterprise VOIP service Tuesday in 42 markets, with service to 113 by the end of the year. The move follows Covads June 9 acquisition of startup GoBeam, whose enterprise VOIP offering arrived with the first wave of IP Centrex providers back in 2001.

GoBeam, based in Pleasanton, Calif., was the first company Id seen to allow its subscribers to control a softswitch and other servers through a browser. Its full-screen "Dashboard" let you click to dial from buddy lists, a new thing at the time. You clicked, and your phone rang.

Then your buddy picked up on his end. It let you drag-and-drop people into conferences, set find-me/follow-me call routing based on time of day or kind of caller, change your greeting, see and play voice mails and see faxes in an e-mail-like presentation, and also see a log of calls made, received and missed. The Dashboard also included a handy enterprise IM window.

The administrators GUI made short work of adding, dropping and changing users. Subsequent releases added call center supervisory options, which displayed the calling activity of all of the VOIP users associated with that GoBeam distributed call center account.

It was all voice-accessible, too, of course, so you could reset find-me/follow-me and hear voice mail from a phone anywhere. It came with auto attendant as well. All this—and today Web conferencing—is now part of Covads offer, along with high-speed Internet access.

Most of these telephony functions have since been adopted by many VOIP service providers arriving on the second, post-telecom-crash wave. But San Jose, Calif.-based Covad parts company with them in scale and responsibility.

Many of us already know the distinction between the Vonages and Skypes, which send voice traffic on a best-effort model over the unmanaged Internet, and those that lease IP backbone to assure quality of service.

Covad, like relative VOIP newcomers Nuvio and VoicePulse, runs its service over managed Internet, leasing long-haul IP lines and gateway POPs from wholesaler Level 3. As such, it can offer service-level agreements that guarantee voice quality.

Why, after years of drought, has it started to rain VOIP providers? Click here for a column on the resurgence.

The larger distinction, though, is that Covad manages and bills for end-to-end connectivity. It brings the broadband connection, and it targets a larger business customer. The primarily consumer-focused VOIP providers leave the broadband connectivity up to their subscribers—who typically choose cable and DSL.

These are folks whose voice needs can be served with a handful of phone lines, traveling in packets over DSL or cable IP bandwidths. Like residential subscribers, these customers are expected to install their own VOIP adapters, which come in a FedEx or DHL box: Plug phone in one end, plug Ethernet cable in the other, plug cable to router.

Next Page: Covad guns for bigger VOIP game.

Bigger VOIP Game

Covad aims its service higher, at businesses worth at least a T1—1.54 Mbps—of voice and data or above. Connectivity also may be through SDSL, which runs at a similar 1.5 Mbps or 756 Kbps, according to Ed Mattix, the companys vice president of corporate communications.

Covad sets up the customer through dealer integrators, who install multichannel IP adapters to VOIPify existing analog phones, or install a variety of IP phones. It also has an offering, called PBXi, for companies that have their own PBX. The benefit here is not only cost savings per minute through VOIP, but the ability to link up multiple sites of PBXes and remote workers through Covads softswitch.

This can unify a multisite, multi-PBX-vendor enterprise with one centralized voice mail, auto attendant, unified messaging, four-digit dial plan, call-forwarding option and transfers. It can connect remote solo offices over SDSL to function as an IP Centrex extension, with full Dashboard functionality.

Click here to read about how some big-name players are raising consciousness about VOIPs capabilities.

"Covad is going after enterprise customers from pretty small to pretty big," says Jeff Stern, a former GoBeam exec who now consults for Covad. On the small end, that includes customers on SDSL, which goes down to 756 kbps. Doesnt that follow the BYOB (bring-your-own-broadband) model, I ask?

No, says Stern, and heres where Covads status as last CLEC (Competitive Local Exchange Carrier) standing gives it an edge. Dating back to its data LEC days, Covad has DSL termination equipment in more than 2,000 telco central offices spanning 35 states and most major U.S. metro markets.

Just as important, Covads DSL access isnt subject to the higher rates that RBOCs (regional Bell operating companies) are due to start charging their competitors, due to recent FCC (Federal Communications Commission) backtracking from the Telecom Act of 1996. In other words, Covad isnt over the same barrel thats forcing AT&T to retreat from local service.

And why isnt it subject to those prohibitive rates? Because what Covad gets from the RBOCs is only "dry copper," or the last-mile physical lines themselves, without the switching or DSL hardware. These UNE-Ls (unbundled network element lines) are not subject to the same RBOC charges as UNE-Ps, which are unbundled network element plus platform. All this allows Covad to control the IP connectivity end to end, even at DSL scale.

"Once youve got that network in place, you can be aggressive and go after markets that the RBOCs arent going after at this time," says Jon Arnold, a VOIP carrier analyst at Frost & Sullivan. "The RBOCs have been trialing VOIP but havent been pressured yet by startups the way Vonage, etc., have got them all worried in the consumer sector. Covads generally going after businesses with 10 lines or more, anywhere up to a few hundred."

Next Page: Up-and-coming rivals.


-and-Coming Rivals"> While its network advantages are considerable, Covad does not have its end-to-end market—or the PBX gatewaying idea—to itself. M5 Networks, based in New York, is another VOIP Centrex contender geared to enterprises in the T1 bandwidth category.

It also manages the last mile and sells both voice and data services. It doesnt publish an offer to gateway out from corporate PBXes, though. VeriSign is about to launch a similar service in the fourth quarter, with VOIP firewall management. It may be geared entirely toward the on-prem PBX side.

Covads SIP-speaking softswitch is from Sylantro Systems, its application server from Broadsoft, and its IP phones can come from Cisco Systems, Polycom or Swissvoice.

The service can be purchased on a flat-rate basis with unlimited local and long distance ranging from $36.95 to $59.95 per DID line/extension per month, depending on volume. The per-minute plan goes for $26 to $32 per station, plus three to five cents a minute.

One T1 or SDSL connection can support as many as 32 simultaneous calls, depending on the volume of data that also may be running through the router.

Check out eWEEK.coms VOIP & Telephony Center at for the latest news, views and analysis on voice over IP and telephony.

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