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VoIP Gets A Big Backer And Another Lawsuit
Ungrounded Lightning writes "Time Warner Cable has announced plans to roll out a VoIP telephone service. I see two implications. First: ISPs providing VoIP phone service have a competitive advantage over third-party VoIP/PSTN providers (such as Vonage), who must ride on top of a separate broadband subscription for the packet transport. This could lead to consolidation of this industry segment in the hands of ISPs. Second: Cable ISPs have an advantage over Telco DSL operations - where a VoIP offering would cannibalize their own POTS and short-range long-distance revenue. This implies rollout on cable providers first, followed by harder times for telcos, long-distance companies, and third parties."
chipperdog writes "In this article it is mentioned that the small rural phone companies in North Dakota are filing a complaint against a local VoIP provider, CallSmart. Interesting to see how this one works out, given what happened in Minnesota a few months ago."
I agree that Time Warner (and other, especially cable based ISPs) will have a huge competative advantage over third-party providers. But, in my area TWC is going to be offering VOIP in early next year, but they want to charge 39.95/mo for service that I can get for 25 bucks from vonage and they won't even be offering voice mail initially!
I think government and telcos need to realized that VOIP can and shouldn't be regulated anymore than any internet-based service. Governments need to find other revenue streams than regulatory fees....just my $.02
My office is looking to go to VoIP since we are in the planning stages of a move. The estimated cost savings is around $6000 per month for less than 150 people. The drawback is we would be ditching our entire phone system (and phones) and purchasing new equipment (we are talking about $60K at least). No decision has been made yet.
The other added benefit is that I would be responsible for phone traffic, also, in that it would be routed through the normal network. More job security...heh.
[RIAA] says its concern is artists. That's true, in just the sense that a cattle rancher is concerned about its cattle.
Whenever there is a storm, my cable goes out before the power ever does. Cable also tends to go out at random times. Why would I want to change to VOIP when I'm not insured that cable will always be available -- especially since a POTS system is much, much, much more reliable.
I think my principles are reachin' an all time low
I'm not convinced that cable really has an advantage over the phone company. The cable company doesn't get 7*24 at all...
If it rains, we have an outage.
If the weather's hot, we have an outage.
If our cat farts within ten feet of the modem, we have an outage.
Yes, I like my cable modem for the download speed, but I won't give them my phone service anytime soon. Calling tech support is often an exercise in futility.
BTW - I have no land line, my wife and I use wireless only. It's not as reliable as a land line, but it's actually cheaper and works pretty damn well.
Alan.
If a baby bell gets together with local broadcast stations to distribute free over-air digital tuners, cable operators will lose their core business. They reached max penetration several years ago and have been casting about for revenue sources. One thing they tried was an alliance with broadcasters for central services. It was damaged by nonlinear insertion and cheap storage availability.
Take the number of stations within sixty miles of you and double it. That's the approximate number of sources of free programming. The advertising revenue will come back into the community too. You can subscribe to specialized stuff on broadband. Wrestling, Celebrity sports, E!, all the shit you so desperately need.
Any preoccupation with ideas of what is right or wrong in conduct shows an arrested intellectual development. (Wilde)
I understand why phone companies see a threat in VoIP providers, but they shouldn't. Maybe they'll experiment some looses during the time the hype is high, but later on things should be roughly back to normal (or even better, thanks to better marketing and competition strategies).
That's because a lot of customers using VoIP for international phone calls wouldn't make those calls using conventional phone services anyway. I know I wouldn't. If VoIP was not available, and I need to keep in touch often with people overseas, I'd prefer to use cheaper alternatives such as e-mail or IM (even internet conference technology).
But of course, that's my two cents... feedback is gladly welcomed.
Cable ISPs have no experience running a teleco, but they have a marginal technical advantage over a non-ISP VoIP provider simply because of better network routing
Actually, I think that, by owning the network end point (i.e. the consumer VoIP gateway) as well as all of the switching fabric between the end point and the VoIP-to-POTS gateway, the ISP has a substantial advantage in terms of quality of service.
Think about it this way: by using the QoS features that come with the switches, the ISP could guarantee a much better user experience for their customers, while third-party VoIP providers would have to trust best effort. (In fact, if they ISPs are less-than-moral, they could also use QoS on their network to ensure that they had better voice quality than any competitors that also rode their network.)
In a small business you typically need lots of phone lines. VoIP offers you several for a fraction of the cost. It costs about $100 per line and with 12 lines that's $1,200 per month. VoIP offers significantly cheaper prices.
I'm not sure if the price difference is really warranted because the technology behind your old-style phones is fairly mature. It seems like they're gouging you out of pure greed because of the monopolistic control phone companies have.
Or local Verizon in my area is about $35 for no-frills nothing service.
Compare that with my cellular verizon service which is about the same price except with voicemail, caller ID, "free" longdistance because they must remain competitive with other cellular carriers.
VoIP is a frightening technology and I would prefer if it was avoided. But when you're a struggling small business and are looking at reversing your cash flow hundreds of dollars per month you really don't have any choice at all.
Taxes that apply to current voice tariffed services do not apply to "data" services the same way.
Since all the carriers are actually carrying most, if not all of their "voice" traffic by the same methods, on the same kind of equipment as "data", there is money to be made carrying voice but calling it data.
Very little infrastructure remains circuit switched and is now packet switched like data. Much of this was driven by the requirements for pumping a bunch of traffic over fiber; WDM, DWDM etc.
Now the efforts are clearly to pave the way for providers to pocket the difference or most of it; this difference being the amounts charged to the customer which are turned over to the government as taxes.
If you pay $100 per month for "voice" services and $30 of that is taxes, and you switch to VOIP for $85 without taxes, you save $15 at the same time the provider makes an additional $15.
And this doesn't even address the investment tax credits and "cost of doing business" deductions the providers enjoy for building up the ability to offer new services.
So what we have is a bunch of people angling for position in the inevitable VOIP fray.
Some are clearly innovators.
Some want to be first just to stake a claim for later work.
Some have deep pockets but nothing else to offer. So they are about to expend massive legal fees and efforts to keep others out of the game.
If you can't innovate; Litigate.
The end result will ultimately be that the average customer spends about the same as they do right now. How the fees are assessed will look different, but the bottom line will be pretty much the same.
The providers will then benefit or fail based upon how successful their legal tactics were in creating, sustaining or closing tax loopholes in order to benefit their bottom line.
There is no altruism in the move to VOIP.
We just got Cisco IP phones at my work. I notice that when I talk on them I can't hear my own voice in the headset. With normal phones I can always hear myself back. Especially when I blow into the receiver. Maybe with normal phones there's an echo from the electronics looping around... but I like it! It makes me feel like my voice is going into the network.
With the IP phones I lose my train of thought because I feel like I'm talking to myself rather than into a phone. It weirds me out. Do all IP phones take away the echo, or is it just the kind we have?
my blog
They'll be providing some of the back-end service for this (as opposed to them being in the foreground). Time Warner wants this under their name. I've been involved with this for a bit because a number of the large servers I sysadmin (which are local telco boxes) have been involved in adaptations for this project. Should be interesting.
It will be interesting to see how cable companies handle 911 and other emergency services (hospitals, government agencies etc.).
This is really why (aside from reasonable rates for customers) that the Telcos are regulated - and fined heavily if they screw it up.
Dialtone uptimes will be hard to manage for current cable networks - given the current traffic patterns as well as the poor scalability vis-a-vis DSL.
Finally, don't worry about the Telcos; most if not all of them are already leveraging these new technologies in various creative ways to make copper wire a value added proposition into the forseable future. Don't overlook SDSL rollouts over the horizon - and who knows what is on the drawing boards. Given that copper wire touches more homes than cable - who do you think is really in a better position to take advantage of broadband communications of all types in the long term? Who do you think critical government agencies and emergency services are going to trust with their external communications gateways?
I will leave those answers as an exercise for the user...
Lodragan Draoidh
The more you explain it, the more I don't understand it. - Mark Twain
You bring up several valid points regarding the cost of phone service. I am an ex-Bell guy, and there are valid reasons for why things are the way they are. Namely, you need to take a historical look at things to see why we are here, and I won't get into this at this time.
The big issue at this point in time is government regulation. In the U.S., when AT&T was broken up, and in Canada when deregulation took place, there was (and continues to be) a valid concern that Bell would use their dominant position to "lock out" the competition. After all, they already had all the necessary infrastructure in place, and a competitor needed to start from scratch, invest millions of dollars and build a customer base. Hence, we have government keeping their hand in things to make sure everyone plays nice.
If Bell was given a choice, do you really think they would (voluntarily) offer service in areas where they loose money? Its bad business. However, they are mandated to do just that in exchange for being able to charge higher rates in other areas where the do make money.
By declaring VOIP free of regulation, it creates unfair competition for the telco's. We want (and expect) phone service everywhere, we want and expect 911 service, and a host of other services from the phone company, yet at the same time a loophole has been opened where a competitor is able to not have to pay to provide these services. In short order, everyone is going to jump on the bandwagon, and there will be no money to support the money loosing things we have come to expect.
I am not defending the status quo, just trying to point out that we need to look back to see why we are where we are at today. By choosing to not regulate VOIP, then we also need to stop regulating POTS as well to ensure a level playing field for all players. This will have HUGE ramifications in the marketplace.
Why not regulate VOIP service the same as POTS? How do we know what a person is sending out of their house (data stream), and why charge for sending voice? That being the case, I will send video and text (no voice), and create a new loophole to avoid paying extra.
For many years, we kept hearing that convergence was coming, and it would offer many new and wonderful things. Well, its here now. The tradeoff is that we must shed some of the things we have come to expect that will "always be there", and take a big step forward into the unknown. It can be (and is) very scary!
When I was with TW in upstate NY, they were already offering VoIP phone service and the customers loved it ... those that could actually get it. They limited the offering to (if I remember correctly) 5,000 customers and you had to live in a _very_ particular area (sufficient emergency backup power was the key issue.) The consensus was that we were offering the service back then (5 years ago?) so that when the technology evolved, TW would already have experience with it and (supposedly) be in a better place to take advantage of it. They even went so far as to take the very successful GM of the Rochester operation and move her to HQ to head up the project.
Bark less. Wag more.