A Giant Leap for VOIP

New service enables corporate calling worldwide.

A year from now, your company could be making long-distance telephone calls without paying per-minute charges to any telephone carrier.

The reason? A little-known telecommunications service that has quietly begun operating in New York. The service—the first to provide switching for independent digital telephone traffic—is called the Voice Peering Fabric. Its operated by Stealth Communications, a Gigabit Ethernet connectivity provider, and hosted by The Telx Group, a "plumbing" company.

When I say "plumbing," I mean that Telx (pronounced "tel ex") runs some of the giant pipes that make big-time telephony possible. Telx manages thousands of fiber- and copper-circuit ports in a 40,000-square-foot facility, where it connects AT&T, Deutsche Telekom, Verizon and 130 other communications carriers. That makes it the largest interconnection facility in Manhattans 60 Hudson St. telecom center, one of the worlds biggest "carrier hotels." Like other such switching centers in London, Los Angeles and elsewhere, 60 Hudson makes it possible for telcos to exchange calls with one another. When a customer whose long-distance service is Verizon places a call to a customer of Deutsche Telekom, some carrier hotel plays a part.

The Voice Peering Fabric deals in VOIP in a way thats never been available before. Consumer VOIP services— such as the voice component of AOLs Instant Messenger, Apples iChat and the free, downloadable Skype—turn voices into packets that are routed over the public Internet. They dont work well with corporate telephone PBX systems. And a user of, say, Skype cant call or receive a call from anyone who hasnt also installed Skype. Calls routed through the Voice Peering Fabric, in contrast, use IP without necessarily using the Internet. Packets can move entirely on private grids, cutting latency and improving reliability.

Imagine that your corporations WAN and IBMs WAN are extended to include this voice-peering facility at 60 Hudson. Calls from IBM to your company can now start on IBMs WAN, be routed through the interconnect point and wind up on your WAN. No Internet hops would be involved. The calls would cost nothing per minute, aside from the fixed monthly cost of the digital link.

Those fixed costs have plummeted. You can now buy a 10M-bps Ethernet transport from, for example, Los Angeles to New York for about $700 a month.

Many enterprises, of course, have been installing VOIP hardware for years to economize on employees calling other employees. This can pay off handsomely for a goliath such as IBM, which says the majority of its long-distance calls are made among its own offices.

But connecting one enterprises VOIP to anothers has been time-consuming and expensive. Thats why services such as the Voice Peering Fabric will ultimately allow you to turn off your telco for good.

Once its trivial and cheap to interconnect to any other carrier or company that supports VOIP, businesses will inevitably switch over in droves. Despite launching just seven weeks ago, the Voice Peering Fabric already counts among its customers major VOIP players such as Net2Phone, Core Networks International and China Telecom. Soon the worlds largest corporations will start hooking up to the Voice Peering Fabric or its coming competitors. Almost any company youd want to call will be interconnected on the private grid, fully voice-enabled. Youll never have to go through a traditional telco to ring anyone except what Telxs chief strategy officer, Hunter Newby, calls "the have-nots"—people at home who dont have broadband connectivity and are stuck with plain old telephone service.

Of course, the telcos arent as stupid as they currently look, so theyre beginning to offer customers this new form of interconnection, too. Thatll accelerate its adoption even more. All it will take is a few Wal-Marts saying, "We want all of our suppliers to be reachable this way," and paying by the minute will seem so 20th-century.

Brian Livingston is editor of BriansBuzz.com. His column appears every other week in eWeek. To send tips, visit www.briansbuzz.com/contact. Send comments to eweek@ziffdavis.com.