Saturday, October 29, 2005

VoIP 2.0 in Stealth Mode? 

The ITEXPO this week in LA seemed to be an extraordinary event regarding VoIP, at least what one can get indirectly from the blogosphere. Reports from the keynotes are quite impressive, e.g. from Brad Garlinghouse and Yahoo! (Alec Saunders, Rich Tehrani), Charly Fiorina (Alec), Niklas Zennstom (Rich), a very impressive Mike Powell (Rich and Computer Business), Rick Moran (Cisco) (Rich) and last but not least Susan Kennedy from the Calfornian PUC (Rich), so it seemed to be a VoIP madhouse ;-)

In his wrap-up at the airport Rich Tehrani says:

"Perhaps what surprised me most this week was the lack of dissent among keynoters. Everyone seems to agree we are headed to VoIP 2.0. It is unanimous. Certainly this journey must bring along Web 2.0 and must also integrate with IM, video and e-mail.

If there are any hurdles our industry faces it has to be the threat of regulation. This threat can come from a federal level or even a state level. Rural telephone companies do not want to lose their USF subsidies and these companies know how to lobby. Telephone companies are excellent lobbyists. They know how to work with government to exert influence.

For the most part the VoIP industry does not have this lobbying power and there is just not enough money in the VoIP space to allow us to effectively fight ILECS and rural telephone companies who could really influence politicians to place an undue burden on our market.

The problem for regulators is that we have really unbundled telephony from physical networks and it will be impossible to police and regulate the next generation of VoIP services that don't touch the PSTN or use a numbering plan based in the US. In other words, undue burden placed on the VoIP market will send customers fleeing to VoIP alternatives that are beyond government reach."

It is a pity Rich did not write this last paragraph a bit earlier, so I could asked
Inge Bernaerts from EC DG Competitions on Thursday at the VIBevents conference if she still thinks the EU market definitions are "future-proof".

There is also a interesting article on some statements from the parallel event Telecom 05 conference in Las Vegas in the VoIP magazine: "Developing Stealth Strategy for VoIP Rollout". Also here seemed to be no dissent among the keynoters, but obviously there is much dissent between the conferences.

... CTOs of major carriers hinted at what could develop into an intriguing strategy for rolling out IP telephony on a broad scale to residential markets: keeping it quiet. That would allow both service providers and their customers to obtain the benefits of voice over IP, while freeing customers of the need to worry about the well-publicized concerns that surround the technology today.

What are the benefits for the customers here? Need to worry? Well-publized concerns ;-)

Now this is interesting, especially the statement from Verizon CTO Mark Wegleitner:

"Voice over the Internet in the long run is probably not going to provide the five-nines or high-quality voice that consumers are going to require."

This statement also caught the attention of Ted Wallingford.

The statement needs to be analyzed, because it is very tricky:

Mark does not say that the PSTN is better that the Internet, he only says that the consumers WILL require this, but everybody is ASSUMING that he is talking about the PSTN. So he cannot be proven wrong.

De-facto the PSTN has no better reliability then the Internet. The Internet was designed to be very reliable and it is (the core). The analog PSTN WAS very reliable (and I am talking here about the strowger system), because it was a completely distributed system. All switching systems with centralized control never reached this reliability again, especially not the digital systems, although the effort built in was tremendous (and expensive). I know what I am talking about, since I was involved in the development of the DNS-100 and EWSD.

But what the normal subscriber sees is the reliability of his subscriber line. This never reaches the reliability of the core systems, not in the PSTN and also not with Internet access. It is not
impossible to have the similar reliability for an Internet access, say a DSL-line, like for a POTS line, but basically nobody is willing to pay for it - especially not a residential customer.

2. High-quality voice: What does that mean: guarantied low quality or best-effort high-quality?
VoIP is providing normally much better quality than the PSTN, but not always. And there is a trade-off between guarantied quality and functionality. Customers are already used to this: it is mobile phones. They trade to have (sometimes?) low quality (or no quality at all) against mobility.

3. So we are coming to the last statement: ... the customers are going to require.

What does the customer require? As we have seen from the mobile phones, the requirement from the customers are very low regarding QoS - some may say they are spoilt already. It can only get better with VoIP. I am very happy with VoIP, if I have broadband access. So my problem is not VoIP, it is having broadband access (as my readers may already know ;-)

So what is Mark Wegleitner really after? The well-publized concerns.

1. Telling the customers VoIP is insecure, bad quality and unreliable to prevent them to use VoIP from virtual access providers in the short term.

2. In the meantime, convert all internal systems to IP, as they are doing all over the place already.

3. If this is done, they will change their commercials to tell the customers that they are already talking over VoIP all the time, it seems not so bad and there is no reason not to talk over VoIP also over the last mile.

Or as Bill Smith states:

Bill Smith, BellSouth's CTO, described a solution that combines the cost savings of VoIP with the last-mile reliability of traditional telephony. "What we've talked about is why can't we go out to the DSLAM, in the case of a fiber-to-the-node customer, and basically terminate that analog POTS signal at the DSLAM, and then handle everything from a voice over IP perspective in the network," he said. "You still get all the cost advantages of a voice over IP network, and yet that customer's interface doesn't change, and if you're line powering it you've still got the lifeline kind of capabilities."

Oh my good: putting the ATA in the DSLAM and the lifeline argument again. Normally one uses mobile phones for emergency calls anyway (in Europe). This is the reason they do not like to provide coverage at residences in the US. The author concludes quite correctly:

Still, to bring residential customers all the benefits of IP telephony, it'll be necessary to bring the IP part all the way to those residences. That will require making it as reliable as traditional phone service. Once that happens, there'll be no need to keep it secret — nor to make a big deal out of it. Because in the end, the VoIP industry will know it has succeeded when no one considers it an industry at all, and it has simply become part of the communications industry.

There is only one problem with this: as long as the subscriber has an analog line, this is POTSoIP = VoIP 1.0. One cannot have all the nice VoIP 2.0 functionality, such as presence, IM, video, nomadicity, etc.

So the same may happen to the ILECS here as Rich Tehrani said above in direction to regulators:

Providing POTSoIP (VoIP 1.0) will send customers fleeing to VoIP 2.0 alternatives that are beyond the ILECS reach - or if you create a walled garden (Bell South is also going for IMS), until you are finished, your customers will all be save and happy outside.

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