VOIP at Tipping Point, Execs Say

VOIP services have reached the "tipping point," executives said at the Voice On the Net show, shifting from international to domestic communications.

SANTA CLARA, Calif.—Voice-over-IP services have reached the "tipping point," executives said here Monday, shifting from international to domestic communications.

Executives at the Voice On the Net show said that while users understand the advantage of IP calls that arent metered by distance, cable and especially DSL providers need to offer "naked" DSL service that allows users the choice of what infrastructure they will use to make voice calls.

Although the Internet can be used to transmit data in a variety of forms, VOIP services have been the low-hanging fruit that businesses and carriers have first turned to. Bernd Kuhlin, president of Siemens ICN, said in a keynote address Monday that he refuses to use the term "VOIP," referring to "1Gip" and "2Gip" networks to indicate the first and second generations of IP services. Meanwhile, AT&T Corp., Qwest Communications International Inc. and other carriers have rolled out VOIP services, and AT&T launched Monday its first do-it-yourself offering for consumers.

Nearly a third of international calls are now being made over VOIP, Eric Weiss, co-founder of ITXC Corp., a VOIP provider, said during a panel discussion at the VON show.

"Were seeing quite broad adoption in VOIP especially in the international space," he said. "About a third—actually 36 percent—of calls are going over IP. Were seeing the tipping point where VOIP is a major force in international long distance more and more."

Several years ago, Level (3) Communications ran an internal study where a CD-ROMs worth of information, or about 640MB, was transferred via a dial-up connection at per-minute rates, said Jack Waters, group vice president and president of the companys soft switch services, which can handle 25 billion minutes of VOIP calls each month. The test cost about $17 in fees, he said, whereas the same information passed over the Internet today would cost less than a dollar.

Carriers and infrastructure providers have to decide whether to go forward with IP networks or use an older technology called TDM, or time-dependent multiplexing. In any case, voice data must be switched between IP and the Public Switched Telephone Network (PSTN) connections via soft switches, which separate out call control, signaling and services. Border controllers, meanwhile, facilitate IP traffic from network to network, including the enterprise internal network to the service provider on to the Internet backbone and back again.

The constant need to switch between networks will hamper VOIPs adoption unless the intelligence of the soft switches is improved, said John Curran, XO Communications Inc.s chief technical officer. "Long term … youre not going to have border controllers to a soft switch to another soft switch across the room to another border control," he said. "Its too many ports, and too much capital."

Meanwhile, the consumer market for VOIP will be tested by legislation by Sen. John Sununu Jr. (R-N.H.) and Rep. Chip Pickering (R-Miss.), who plan to submit bills to address the regulatory issues around VOIP, according to Jason Oxman, assistant general counsel for Covad Communications. "From the perspective of the broadband service providers, its not in my best interest for someone to ride on my network when I can do it myself," he said.

The VON show continues here through Thursday.

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Correction: An earlier version of the story attributed a mischaracterized version of the Sununu and Pickering legislation to Covads Oxman.