Calling on the Internet
Perhaps spurred by a request for information by a large telco, announcements of stand-alone devices that allow residential and small-office broadband customers to make and receive voice-over-Internet Protocol calls using a plain old telephone have come fast and furious in recent weeks.
And why not? Between cable, fixed wireless, DSL and satellite, TeleChoice analysts estimate that within five years, 40 percent of households with Internet access will be hooking up using broadband modems. So it only makes sense to migrate some voice traffic to that broadband access. The question is how that service will be provided through the set-top box, an analog telephone adapter or from a box on the side of the house.
"Its crazy right now," says John Gleiter, director of Broadcoms cable modem product line. "People are looking at voice in the set-top box, voice in the modem. The modem guys are saying, Lets look at a telephony adapter. Everybodys trying to position themselves for how theyre going to supply this service."
If the regulatory cards fall in their favor, the new technology represents a chance for incumbent carriers to recapture "second-line" customers lost to other broadband providers. The regional Bells are already deep into DSL, accounting for about 80 percent of the 2.1 million residential customers in the U.S. today.
But for the competitive carriers, the easy-to-use boxes represent an immediate opportunity.
"We are purely exploiting an opportunity by using an existing infrastructure and platform," says Net2Phone spokeswoman Sarah Hofstetter. In early May, Net2Phone began deploying Linksys Groups VoIP technology for cable and DSL. The Linksys box plugs into a broadband modem, and a regular telephone plugs into the Linksys box, giving the user the ability to make calls immediately. A software upgrade allowing incoming calls is expected within the next month.
Cisco Systems last week rolled out an analog telephone adapter, the ATA 186, that sits between the broadband modem and a regular telephone, and allows customers to make and receive calls. DSL gear maker Jetstream Communications is expected to make a major VoIP announcement on June 4. Dialpad Communications last week announced its Dialpad Access broadband VoIP offering.
"The cable companies and the fixed wireless companies are going to love this," TeleChoice analyst Larry Hettick says, referring to the Cisco box. "They make voice-over-broadband connections very easily. The challenge will be to sell it through a service provider who can offer voice-over-DSL."
Hettick sees huge opportunity in voice-over-broadband.
"If we can solve quality-of-service problems with voice-over-Internet [Protocol] and QOS problems with voice-over-cable, and a greater implementation of DOCSIS [Data Over Cable Service Interface Specification], were going to see widely accepted adoption by consumers of voice-over-IP over a broadband connection."
Broadcoms Gleiter says it will be six to 12 months before DOCSIS 1.1-certified modems that integrate cable voice and data and their counterparts in the cable headend are ready for full-scale deployment. And while the advanced standard promises to deliver primary-line quality, including always-on 911 service, he says there is a lot of work to be done in operations support systems, billing, management, gateways and call agents before voice-over-Internet can meet reliability expectations set by the public switched telephone network.
It will be worth the work: Kinetic Strategies estimates there were 5.5 million cable modem subscribers in the U.S. in the first quarter, up from 4.8 million at years end.
In the interim, Gleiter says he expects to see more of the plug-and-play devices come to market, which is fine by chipmaker Broadcom. "Its kind of a holy war over where the chip goes. Were fine with that. Well sell bullets to all of them," he says.