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For six years at my old magazine, we proclaimed that VOIP was exploding—to 120,000, then 60,000, then finally 36,000 or so free-riding readers. VOIP carriers and the vendors who supplied them were crawling out of the woodwork.
CLECs (competitive local exchange carriers) and BLECs (building local exchange carriers) were installing DSLAMs (DSL access modules) in the basements of office buildings and apartment houses, hooking them up to multitenant IP PBXs, gatewaying out to ILEC T1s, and offering voice, data and applications over newly installed broadband.
They were offering all of the Web enablement and convergence benefits of IP PBXs, and they rushed to wire the biggest metro areas, often before signing up customers.
Somewhere into those years, the dot-bomb hit. CLEC capital ran out, and their VC sources dried up. Telecom publications—our fortunes tied to those of the CLECs and the infrastructure companies that sold to them—shrank in ad revenue, page size and, inevitably, editorial staff. The CLECs we reported on withered and died.
The magazine all but ceased publication at the end of 2003 and reset its editorial sights on what looked like the safest corner of the telecom marketplace: the enterprise PBX.
So, its more than a little ironic to find, a little more than a month into this new gig at eWEEK.com, that VOIP has, indeed, exploded with full force. It now appears to be raining IP telephony services.
Its actually raised the dead: Many of the company URLs referenced in our old CLEC/BLEC stories now pop up sites of these very services, sometimes under new names.
In fact, who has not announced voice over data service recently? The cable companies all now ask if youd like broadband data and voice with your HBO and CNN.
The long-distance titans in the United States and abroad–see British Telecom, France Telecom, Deutsche Telekom–have come in with VOIP trials.
In the United States, this is not only a play at keeping their long-distance customers out of the arms of voice-over-cable–it also offers the interexchange carriers a way to circumvent the termination fees theyve had to pay the exchange-holding regional Bells–SBC, Verizon, Qwest and BellSouth—to complete phone calls.
The ISPs that arent cable companies–Yahoo, MSN and AOL–have figured out that their instant-messaging clients are just the place to imbed VOIP client software, and work presence information into the calling process, in the bargain.
The companies that started in multinational data networking–Equant, Broomfield, Colo.-based Level3 Communications Inc. and others–have added voice to their offerings.
Next Page: Mushrooming VOIP services.
Mushrooming
Not to mention the companies that have sprung into being as VOIP service providers, which are mushrooming fastest of all.
These can be classified into two supercategories. First are those that provide the access method, such as Santa Clara, Calif.-based Covad/GoBeam and its (historically, primarily) DSL connection, or Atlanta-based Cbeyond Communications and its T1.
Second are those that leave the broadband acquisition up to the customer and simply register the subscriber to its central softswitch, app servers and media gateways.
Here find your $20 to $40 packages from Edison, N.J.-based Vonage; your consumer (not your business) packages from MacLean, Va.-based Primus Telecom; North Brunswick, N.J.-based VoicePulse Inc.; Lowell, Mass.-based BroadVoice Inc.; Kansas City, Mo.-based Nuvio Corp.; Newark, N.J.-based Net2Phones VoiceLine; Santa Clara, Calif.-based 8x8s Packet8; and scores of others.
Most of those above, with all-you-can-eat or tailored consumer packages, offer a range of IP Centrex packages to businesses as well. These can go beyond the broadband limits of a DSL connection, and may work in tandem with legacy PBX and gateway.
Some, such as New York-based M5 Networks Inc., are thus far entirely focused on the IP Centrex space. And then there are your downloadable, VOIP-focused freebies, such as Jeff Pulvers FreeWorld Dialup and Skype Technologies SA. The latter will go the route of some brethren by launching a paid service that gateways out to the PSTN (Public Switched Telephone Network).
So, what has happened to tempt the new wave of VOIP entrants? The easiest answer to understand is that the technology has improved and has been proved by widely promoted services such as Vonages.
“Vonage proved that SIP [Session Initiation Protocol, a favored VOIP signaling protocol] worked,” says a widely quoted SIP guru.
Lynda Starr, vice president of carrier research at Cedar Knolls, N.J.-based Probe Group LLC, agrees. She adds that carriers got smarter about network buildout, relying on open broadband Internet connectivity to reach subscribers—at least on the consumer and small-business end—and simply sending that subscriber a packetizing terminal adapter that would register a dynamic IP address to the central server. This became more reliable, of course, with the wider spread of broadband.
The other change has been regulatory: The FCCs February 2004 ruling on Pulvers FreeWorld Dialup service, which offered free IP calling to anyone else on the network, determined that for now at least, VOIP that never touches the public switched network is a data application.
As such, it is not subject to universal service charges and other state and federal taxes, which can make up well over 25 percent of a residential phone bill. This has given VOIP providers a tremendous price advantage and forced the traditional telcos to IP-ify their own voice services.
“The LECs [local exchange carriers] are terrified,” my SIP savant says. “Sixty-five percent of Verizons voice customers are exposed to Comcast.”
But the regulation story is certainly still being written, and major developments have been filling up the business pages. The RBOCs were told last week that they could discontinue the discounts theyd previously been forced to give competitors for access to their switches—what the Telecom Act of 1996 referred to as “unbundled network elements,” or UNEs.
On Thursday, long-distance carriers and state regulators appealed to the Supreme Court to block that decision, in effect continuing to enforce the discounts for competing providers.
Next Page: Building telco bypass roads
Bypass Roads
But the biggest concentration of news, in the short time since Ive been gone, has to do with making the RBOCs lock on the local loop irrelevant; in other words, driving voice competition that divorces the telcos entirely.
Easiest to understand in this connection is cable, whose share of the residential broadband marketplace is booming. Lurking in the wings is fixed wireless, which transmits between neighborhood base stations and indoor or outdoor transceivers and also circumvents the telco. Thats all about physical access.
Another step on the road to PSTN irrelevance is VOIP-carrier-to-VOIP-carrier interworking. “Cable operators want a call that starts at Comcast and goes to Cox–all IP,” says my SIP guru.
If conversations can hop from one IP carrier to the next, and from an enterprises own IP PBX to IP carrier, without having to gateway out to a PSTN and back in again, we achieve VOIP end-to-end. The PSTN is cut out entirely. Thats why you now see many interop announcements between carriers, such as Level3, and CPE vendors, such as Nortel, Avaya and Cisco.
Its also why theres more noise around a new class of beasts called session border controllers, which transcode between SIP, MGCP and H.323 VOIP protocols and variations thereof, and also negotiate problems of firewall transversal.
Obstacles on this bypass road certainly exist. One is E911 (Enhanced 911) compliance: If you typed “911” in your instant-messaging window, how would anyone know where you actually were? And where would that message go?
Since Internet telephony addresses are similarly placeless, mechanisms have to be employed—and several are—that automatically route distress calls to the proper emergency response center.
Another obstacle is presented by FBI rules that require federal wiretapping ability–a hard nut to crack in a stream of data packets. Yet another is assuring universal-service subsidies to less populated regions that present less economic incentive to network buildout.
Finally, theres the problem of taking a traditional phone number and making it work like an IP address. Say your traditional phone number is on your business card, but most of your world can now reach your phone over IP.
A protocol called ENUM, the result of work of the Internet Engineering Task Forces Telephone Number Mapping Working Group, deals with a standard way of converting that number into an IP address, so that VOIP networks can route calls independently of the routing tables and SS7 signaling used by telcos.
ENUM is to work with domain name servers, in the same way that URLs get resolved down to physical addresses.
So here, after a few months absence, are the very broad strokes of the VOIP landscape on the service provider side. Columns to follow should take up some of these developments and players in turn.