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The Continued Advance of VoIP
A reader writes: "With the recent VoIP ruling from the FCC, it appears that the playing field in the US is ready for take off. There's been some more coverage on that, but companies are begining to wonder about how to manage all of this - but PMC-Sierra (one of the big chip makers) has announced additional support for it."
Unless more basic infrastructure impovements are made in providing decent bandwidth to these technologies, I'm not likely to enjoy VoIP terribly much.
Si tacuisses philosophus mansisses. If you had kept quiet, you would have remained a philosopher.
Sure they do. But where do they make their money? They don't make as much on bulk IP traffic as they would have on the individual long-distance calls.
(Of course, they spend less, too, because they don't have to do the billing processing for the individual call. But I still think that the long-distance outfits wind up with less profit from VOIP than they did from long-distance phone calls.)
So: If their profits are going to go down, and we can see it coming, then sell their stock.
(Disclaimer: I am neither a stock-market analyst nor an investment advisor. I'm just saying what it looks like to me.)
How ironic. In the 1960's, there was a big push for all-electric homes (electric heat, electric hot water heaters, electric stoves) because nuclear power promised to make electricity so inexpensive, it wouldn't be worth metering -- we'd all someday just pay a flat monthly rate to keep the grid and the plants maintained.
Well, we all know how that particular story ended up. But who would have imagined, back in the days of 40 cent per minute interstate calling, that someday telephone service would become so cheap that it wouldn't be worth metering? Unmetered telephone service? Now you're just crazy talking!
I suppose it's somewhat ironic (in an Alanis Morrisette fashion, not true irony) that it's really just people problems, not technology problems, that we have to solve in order to make these things come true.
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A basic feature of VOIP is that while you need some type of bandwidth for it to be available it does not have to be over any particular media, as long as the bandwidth and latency characteristics of the medium are adequate to support VOIP. This can be DSL, Cable, Fiber, or Wireless. DSL is simply a regular phone line equipped with the DSL Hardware at your home or place of business, and at the Telco switching office. DSL will work with VOIP, but so will typically a cable modem, or a WiFi connection to a high-speed backbone. In the first case, you need a phone line to get DSL to begin with. Most of the bandwidth on a DSL line is dedicated to data transfer, the amount of bandwidth dedicated to sending the voice data is only a small percentage, but brings in the lion's share of the revenue. In the second case, you can use your cable modem to run VOIP. No telco landline required, and you still get to have all the goodies of VOIP.
How the economics of VOIP work out for you depends on how you have your telephone service currently structured. If DSL is your only option for broadband, you are already paying for phone service. Unless a VOIP plan makes sense in terms of saving money in long distance calls or the like, then you probably won't save much money.
If however, you also have the option of getting a cable modem, or can hook onto a wireless connection to the net, then VOIP suddenly gives you the option of cutting the cord with the local telco. If you are spending $70 a month for a package of DSL, local phone line and long distance bundled together, then cutting the cord may suddenly make sense, especially if the marginal cost of getting cable internet is low, which may be the case if you already get cable in some areas.
Unless Verizon at least gets DSL to my doorstep soon, I will let their $65 dollar a month noisy excuse for a phone line become just another underground obstruction, and let the cable company bring me HBO, VOIP, and Broadband with the money I save.
But it's not a bad fit for small biz. I pay nearly $200 per month for my Verizon 'basic' business phone service with bottom-of-the-line DSL for my design studio. Since Verizon is the only game in town I have to play to matter what they decide to charge. And I don't even use the phone all that much.
Conversely if I could convince Adelphia to install cable in my business I could grab cable for $60-$70 per month plus Vonage for about $30 and I've cut my bill in half. Too bad I can't actually get Adelphia to come out and install. Their local business high-speed rep is less than interested in my business.
But yes, in theory this might not be a bad fit for small, 1-3 person shops like myself that want to save money.
DigiSquid Design.
What will further delay VoIP from entirely killing the PSTN, smong other things, are (1) The vendors (bad vendors!) are doing a Microsoft-like embrace-and-extend of SIP (the session initiation protocol used to set up a VoIP call) (2) Meeting regulations like CALEA (the law enforcement act that gives the government the power to tap the phones) (3) Truly connecting Voice Over IP "islands"... because how to you share IP addresses of phones and maintain privacy (like suppressing caller ID)... and the best savings come when you can remove the PSTN (public switched telephone network) entirely.
You don't need a provider to do deploy VOIP. The only essential thing that a provider is giving you is an interface into the POTS network. Once everyone is on the internet, you'll just be able to "phone greg@home.com" and a currently non-existent protocol will resolve that to whatever communication Greg has on hand, by talking only with Greg's own equipment, not that of any provider. The internet is Peer 2 Peer.
Sure, you will still be doing Voice over IP, but it won't be any kind of huge revenue generator for VOIP companies, and, as commercial entities, they will shrivel and die. But I wouldn't worry, they probably have a good ten to twenty years of good times before people figure that out.
You have more faith than I do. Once we have a way to link the "islands" of Voice over IP that corporations and individuals are creating, I would expect Voice over IP to turn into a product, (think fax machine) rather than a service. Buy a Linksys device from your local electronics store and plug in. There will be NO revenue involved except for the "bit carrier", and that will be a race to the bottom between cable carriers and DSL providers. I would say that happens sooner rather than later. I think 10 years is generous.
It's not that it's a "flash in the pan" as you put it. It's a step in the right direction. Voip providers (or at least the one I engineer for) aren't concerned with PSTN other than for now it's a nessesary evil and temporary source of very modest revenue. No what you say is true but what you miss is that a Voip provider brings a much bigger piece to the puzzle. How many other companies can make this work? VERY FEW, and the reason behind that is that they can't find the right mix of technology, and business. Voip isn't a poor mans game, nor is it the "free ride" everyone paints it to be. When you go VoIP you pay for someone to implement or manage it or both. Your also buying into a theoretical long term investment. The advantage to voip is that it puts you into a framework that can grow to new heights faster and better than the PSTN because of it's nature.
Now on to the one other noteworthy post I wanted to add to.
"What will further delay VoIP from entirely killing the PSTN, smong other things, are (1) The vendors (bad vendors!) are doing a Microsoft-like embrace-and-extend of SIP (the session initiation protocol used to set up a VoIP call) (2) Meeting regulations like CALEA (the law enforcement act that gives the government the power to tap the phones) (3) Truly connecting Voice Over IP "islands"... because how to you share IP addresses of phones and maintain privacy (like suppressing caller ID)... and the best savings come when you can remove the PSTN (public switched telephone network) entirely."
First off how are the vendors bastardizing sip by embracing and extending a standard that encourages and has built into it (at least for the most part) a systematic way to replace the PSTN and keep phones predominately the same? Also I challenge you to tell me of a better standard. What VoIP needs is a standard to indeed rid us of the islands you mention.
Secondly how does CALEA slow down VoIP? A provider of VoIP has a much easier time providing for "tapping" than a traditional LEC does in many ways. Cisco's Span Sessions for instance, need I say more?
Thirdly, you talk about connecting these islands, yet you talk down to adoption of Sip? And how does sharing IP's come into the picture? How do you share and IP unless of course you mean via NAT. And even if that is the case then you haven't looked into how SIP works have you? Sip is in basic terms simply a proxy device and a setup protocol similar to how DNS doesn't carry the data, it's a pointer to it and a middle man to the conversation as a control element. Sip has control of the caller id, you can at that point much more easily "mask" caller id with NAT because at that point the last true remaining indicator of who you really are is your IP address, not your caller ID.
Now do I want everyone to think that i am trying to shoot down or flame someone? not at all. But we can all think this through for ourselves.
Being the Senior Engineer for a Managed VoIP Solution provider offers me a unique glimpse into the future of this and as such I think you shall all be shocked. More so than you might think with the suprise waiting around the bend for the backbone providers to unleash. Beware, they are no where near done with the bumps in the road yet. But those bumps will make for an incredibly good path to the future.
I say good riddence.