Thursday, May 12, 2005

Do we need phone companies for VoIP? 

I want to pick up on the statement by Jon Peterson on slide 2 of his presentation: at the ITU-T/IETF NGN meeting in Geneva I posted last week:
On the Internet, telephony is an application
– Not necessarily a service, no service must be provided
This implies that if no service is provided, one does not need a service provider either.

Tom Evslin in the last? of his series of posts "As the Phone world Turns Part 9 - Do we need Phone Companies?" first gives a tutorial how VoIP and especially SIP is modelled after e-mail and from this comes to the conclusion:

"Notice that most medium or larger size companies DO NOT use any outside servers other than DNS when doing email.

So three quick inferences for the phone world from the analogy with email:

  1. consumers and very small business will continue to need someone to operate “voice” servers for them but that service is likely to be bundled AT NO EXTRA COST with ISP service or be “free” and advertising supported.
  2. larger businesses will operate their own servers and will not require a service provider other than for DNS and basic connectivity to the Internet.
  3. There is no long term business model which supports charging by the minute for voice transport"
Now add to this the recent post from Tom Keating: "Traditional Telephony Dying at the Hands of VoIP", where he cites a report from the Info-Tech Research Group:

"... that 23% of small- to mid-sized enterprises have already implemented VoIP technology and that number will grow to 50% within the next three years.

VoIP is displacing traditional telephony services a lot faster than anyone expected,” says
George Goodall, Research Analyst at Info-Tech Research Group. “It means a whole change to the look and feel of an organization’s IT infrastructure.”

While one network that handles applications and telephone calls is an IT manager’s dream, the speed with which VoIP is coming to the market might be an IT manager’s nightmare,” Goodall says. “Senior managers are demanding the cost savings associated with VoIP, vendors are scrambling to reinvent their offerings, and IT managers are scrambling to implement the technology.”

So "service providers" = "telcos" are left with the residential customer, and what they are offering there is not very exiting: it basically simple POTS replacement. The only one here going sucessfully into another direction is Skype.

So the (local) phone companies will be squeezed regarding services between enterprise DIY and cleverly branding and globally acting up-starts.



Comments:
E-mail is basically unusable due to spam, do we want that for voice?

I'd argue the answer is no. For the forseable future people will want a service that offers protection from abuse and spam. The only way "provider-less" voice infrastructure will succeed is with strong identity controls to provide non-repudiation for incoming calls. The problem there is that anonymonity becomes difficult to impossible to enforce.
 
At least I got your e-mail (and others today) so saying e-mail is basically unusable is not completely true ;-)

You are correct that a need for proper identification is necessary, but this could also be separated from the communication application layer e.g by using smart cards or SIM-cards. The advantage would be that you could use the same identity for all types of communications, and it will be end-point to end-point. Of course you will need a trusted third party (=service) for this, but this will be independant from your communication applications. It is then up to you if you accept anonymous calls or not.
 
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