Wednesday, March 03, 2004

Clay Shirky: VoIP - Plan A vs Plan B
Shirky: VoIP - Plan A vs Plan B:

First published February 26, 2004 on the 'Networks, Economics, and Culture' mailing list.

2003 was a remarkable year in the US for voice over the internet (VoIP). If you needed a label for the events of the year, 'Collapse of Denial' would be a good one -- after a long period of relative inaction, the FCC and the state regulators are suddenly pushing hard for a regulatory framework. The question is no longer whether voice is going to become an internet application, but when.

'When' could still be a very long time, however. The incumbent local phone companies -- Verizon, SBC, BellSouth and Qwest -- have various degrees of interest in VoIP, but are loathe to embrace it quickly or completely, because doing so means admitting to everyone -- shareholders, regulators, customers -- that both monopoly control and artificially high voice revenues are going away. (The fact that this is true does not much lessen the pain of saying so.) As a result, they will likely try to convince regulatory agencies, both the FCC and the states', to burden competitive VoIP firms like Vonage with additional costs and rules, while delaying their own offerings.

Complicating this de facto Plan A, however, is the fact that VoIP isn't a service, it's just a set of protocols, meaning that competitors don't have to set themselves up as upstart phone companies to deploy VoIP. If Plan A is 'Replace the phone system slowly and from within,' Plan B is far more radical:

'Replace the phone system. Period.'


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