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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.
But isn't "short-range long-distance revenue" an oxymoron?
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.
So when your cable service is interrupted, you can't call 'em to tell 'em you lost your TV signal! Think of the money they'll save on customer no-service!
Dump the IRS - http://www.fairtax.org
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.
Well, it seems to me that this at the very least provides some valuable competition to the phone monopolies. Unfortunately, capitalism being what it is, it seems fairly likely to me that either VoIP or phone (probably VoIP) will eventually destroy the other, and unless we get more competition in the ISP market we'll just end up with another monopoly.
I could be wrong, but I think that one of capitalism's biggest problems is industries that require a large infrastructure. I know that socialist approaches to most things tend to be less efficient (due to the lack of competition), but in a case like this I think it's better, since to get REAL competition we need multiple infrastructures reaching every single house, the cost of which of course would still get passed on to the consumer.
Yes, I'd like to think that the American business model can be summarized in one paragraph as well.
-- You see, there would be these conclusions that you could jump to
Troll. He also works middle-management for Honda and as systems manager at Apple.
#define DRM chmod 000
I think Cheech would like VoIP. I mean tihnk about it who doesn't cannibus tehir own pots or place cannibus in POTS or something.
When I finish smoking tihs doob I'll come back to this post dude.
MoFscker
Gentoo Sucks
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.
rofl. pots is more reliable? i think you just have crappy cable.
i have comcast that stays up pretty much all the time. its been down like twice in 31/2 years. plus i get better than dial-up or dsl speeds (3.5x1, yay). and i actually pull those speeds.
i also work for a major DSL ISP/POTs provider (yeah, i dont have it, that should say something) and trust me POTs is NOT more reliable than cable. its down all the time and is usually effected much more so by weather than wonderful cable.
at any rate i no longer have a home phone anyway (cell phone and cable net, w00t) so thats just my 2 cents.
WIth a cell phone, you are automatically "passed on" the next cell when you move. With WLL, you are locked into your service area.
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
As exited as I am to see Internet services such as VoIP become mainstream, part of me still thinks that POTS will still be here for a while.
A couple of things to consider:
- You need broadband and not everybody has it, can get or will ever want it
- Cable and DSL (especially cable according ot my own experience) are definitely not as stable as POTS. They are next to useless when power is out unless you AND you proveider have UPS
- Emergency services are still an issue with VoIP. I'm expecting the first headline about someone dying because 911 wasn't available on VoIP anytime now.
- There is still no end to end QoS on VoIP. Home gateways are still too dumb to prioritize VoIP trafficover your Pr0n traffic.
It is a little known fact that cable companies were ruled as not common carriers. That means that customers have very little protection from lack of service, privacy issues... Once we allow them to provide phone service without those protections we will erode those rights even further. $20/month for a phone line is a good deal. Do you think that will last if the phone companies are driven under?
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.
There are very valid points as to why VOIP have unfair advantages over POTS. IMHO, too many people are jumping on the VOIP bandwagon because it is "new" and because they are the "little guy" fighting against the big evil telephone co.
But there are serious questions that need answered. What about 911? What about the laws requiring certain reliability and uptime requirements? What about rural areas without highspeed internet? What about all the taxes that are added your phone company's bill and not on the VOIP bill? I'm sure there are other questions as well.
Don't be one of those dorky protesters who root for the underdog until 10 years later when the VOIP guys are the "big guys" and you start compaining because basic phone and 911 is no longer available in the middle of Mississippi.
BrianWe actually use VoIP at my office: www.microoffice.us/slashdot. It works reasonably well and allows us to provide an extremely cost-effective office suite package (office space, phone, high-speed Internet, mail, meeting spaces, etc...) to our customers. Our customers are primarily solo entrepreneurs (e.g., consultants and freelancers) and very small businesses who are price-conscous.
You really have to be careful about the data network though. We have near-dedicated bandwidth from our data provider, which is why quality is good. Forget about trying to serve business class users with VoIP over cable modem or DSL -- the quality goes to hell when someone tries to download a large file. The QoS really has to take place upstream of you (at the point of the bottleneck). Otherwise it doesn't achieve much.
I'm curious to see what alliances will be formed: local governments and the phone company on the same side for once, against cable providers and possibly the FCC. It could be a real dog fight.
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I ditched my landline 6 months ago and haven't looked back. I get tons of free features I didnt get with my landline ( like caller id, etc ), no solicitations at all (isn't this even illegal?), and I can take my phone with my where ever I go (or leave it at home if I don't want to be disturbed).
And to boot, its all about 10 bucks cheaper / month than the landline was ( 300 anytime minutes + unlimited evening and weekend + unlimited long distance - who uses more than 300 minutes during the weekdays? You're probably at work and using the company phone).
Seriously I don't know why people bother with landlines. The solicitations alone were enough to drive me away.
Before someone starts including TC on a Linux router with a pretty interface/enclosure. It's already pretty damn simple with the Arbitrator which (thankfully) the source is open to some extent. I'm sure someone else has come up with something (that is if you don't like cisco/3com or other hardware based systems.)
I don't see how this apparently diverse market of Free/cheap QoS is going to somehow limit VoIP? End to end QOS is necessary, so ISPS will provide it, Why? Because your ISP will be your provider, and if I'm not mistaken, they can run the QOS on the connection they provide you.
Well, no; CallSmart is pushing the rules, quite obviously and quite openly.
Under FCC guidelines (not formally "rules" yet, a phone to phone nonlocal call that crosses state lines is properly treated as long distance, whether or not it happens to use IP, ATM, or smoke signals in the middle of it. The local phone companies are thus allowed to charge "switched access" charges, rather than local; for a rural company, those charges can be quite stiff. CallSmart is claiming that their phone-to-phone service is not what it is. MCI, btw, claimed the same thing about its Execunet service in 1976; that case was eventually settled by the creation of the carrier access charge system that remains in effect. (Before that, AT&T Long Lines and the Bell Operating Companies used a "separation of revenues" formula to pass subsidies to the latter.)
Rural phone companies face very heavy capital costs (often over $10k/line), which cannot be covered by "affordable" monthy rates. So there's an elaborate subsidy system in place. CallSmart is evading it. Now it's easy to understand why they'd want to, but somebody has to pay for those rural phone lines, and monthly bills typically cover less than 1/5 of their cost! The rest comes from bloated LD access charges (what CallSmart is evading) and direct subsidies (that "Universal Service" line item on your LD bill largely goes to rural telcos).
I don't think the current system is right -- it encourages inefficiency, excessively discourages wireless substitution, and leads to arbitrage hacks like this. But CallSmart is not Vonage, which gets by because it requires a computing device (AT-186) at the customer site and is thus not "phone to phone" but technically "computer to phone". And yes, a PBX can be subjected to switched access charges too; I know of cases where that was arranged.
In the business marketplace, VOIP makes sense for just about everyone. Any serious business is likely to be using a mix of frame for Voice and Fiber for data at the moment, VOIP allows this to all be consolidated into fiber pipes. This works well for the vendor because fiber is cheap to install and provision compread with DS1/DS3.
:)
At the consumer end of the spectrum, copper works fine for voice calls, and is required for DSL. So there is no clear advantage for VOIP over DSL. But with cable, the TV line that has already been expanded to carry data can now carry voice. Big win for cable network owners.
I don't really care though, I've been a cell user for years. Would be nice if Nokia could work on the stability of the 3650 though
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
D'yall know that Canada's Telus has been migrating to VoIP for all its long-distance traffic since July 2002? And that it has launched business service to Ontario and Quebec as of November?
VoIP is already here... it's just that the USA lags leading telco providers by about three years!
--
Don't like it? Respond with words, not karma.
Not knowing what you were talking about I did a quick search on Minnesota and you're right. This is the most exciting event in the history of the World compared to what has happened in Minnesota in the past few months.
I haven't tried VOIP or anything like that but POTS is more reliable than cable in my area. My "low-speed cable" goes down once in a while. Maybe it might be my area but I have certainly noticed it. Having said that, I have no idea how DSL is. I have not had DSL for long periods of time.
:( ). Telephone on the other hand is only used occasionally (a few calls once in a while). So maybe I am just noticing the cable problem more because I use it more. The ideal case would be to compare DSL to cable (but as I said, I haven't had DSL for long enough to make any worthwhile comment).
Also, one other thing... I use the internet a lot. I am pretty much on it many hours (especially since I'm unemployed
Sivaram Velauthapillai
Sivaram Velauthapillai
Seeking the meaning of life... @slashdot of all places
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.
A cable company competes on two fronts: entertainment and the higher-margin data services. The big win for TW is not that this allows them to compete more effectively with DSL providers; it's that you can't (yet? ever?) do this over a Satellite connection. That allows them maintain price on the entertainment offerings and keeps customers loyal.
Envy my 5 digit Slashdot User ID!