SBC's VoIP End Run

Chris Holland writes "Right on the heels of a positive FCC regulation preventing individual U.S. States from levying taxes on VoIP communications, SBC, according to Om Malik, appears to have brought to a quick end the 'lets not pay any termination fees' party that had VoIP upstarts drunk. Jeff Pulver is also sharing his take."

Comments

Re:Oh deary me...

[HidingMyName]

I didn't fully understand the article when I read it, but I think the termination fees aren't related to the internet, but to the local phone system.

So Suppose that I'm calling from long distance to a friend of mine using VOIP, and that friend uses a traditional phone. Then what most VOIP vendors do is provide a sort of central office in each area code, and route the VOIP traffic there, and from the central office make a local phone call to establish connectivity. Traditionally this last hop has been cheap, however (if I understand correctly) SBC wants to charge more for local phone service when it is the last hop of a VOIP call. Since this kind of discriminatory pricing appears to be anticompetitive, I suspect that the govt. may prevent it.

I've heard menbtion of attacks by ISPs that label the packets from their competitors as lower priority, giving their competitors inferior service. I'm uncertain whether the govt. has/will have/will enforce regulations about that.

Regulation

[gaijin99]

And now we see exhibit 2^74th in our ongoing demonstration of why regulations are not necessarially a bad thing. The Bells want to use their monopoly on the "last mile" to force the other players out of the market, just as they did with DSL.

Our toothless FCC and SEC will do nothing because they are lead by people who believe that regulation is, in and of itself, a very bad thing. Michael "the Market is my God" Powell is about as likely to stop the Bells from squashing the competition as George Bush is to announce that he's in favor of gay marriage. Naturally there will be people who will claim that this can't stop the bold VOIP companies, but they'll be wrong. If the Bells can charge exhorbinant rates for call termination it'll put Vonage, Packet 8, and the rest out of business in a year.

It is possible that massive public outcry could change things and force even Michael Powell's FCC to stop the Bells. I wouldn't count on it though...

Re:Regulation

[Dun Malg]

If the Bells can charge exhorbinant rates for call termination it'll put Vonage, Packet 8, and the rest out of business in a year.

Get off your hysteria horse-- they can't charge exhorbinant rates for call termination. This part is, and always has been, regulated. Vonnage's connection to the phone network at large is like that of any of the long distance companies. SBC can no more charge Vonnage higher termination rates than they can AT&T and Sprint-MCI. All SBC can do is compete with them on price, which isn't a bad thing.

Let the invisiable hand solve this

[bluGill]

Vonage and the likes already have momentum. Asterisk and the likes are in position to take over the PBX market. Connect the two automaticly, along with various other networks, and there is enough mass to solve this. Aunt Mary might not understand it now, but when all her relatives tell her to get off SBC because she is the only one in the world(!) they call where they have to pay fees, and she will be forced to listen. Once Aunt Mary realizes that she can call pretty much everyone for less on her VOIP phone, she drops SBC as an extra bill that she doesn't need.

Soon SBC and the like will file for bankruptcy... Not really, they do have DSL, which is a good way to connect. When the notice that customers are switching to Cable internet just to avoid having to pay for an unused voice line, they will drop that all voice/DSL bundling requirements.

As geeks it is our responsibility to socity to make sure it happens. So start your own VOIP expiriment at home, and use it once in a while. Long distance telephone is obsolete, but nobody has realized it yet.

Re:How would SBC do this?

[BobaFett]

How do wireless companies handle this?

And, how does SBC charge this termination fee? Somewhere out there sits a device which receives packets, converts packets into voice, dials a phone, and "speaks into the phone". SBC charges for hooking up that device, right? Seems like the same charge would them apply to wireless and long-distance carriers, no? Also, what would happen if Packet 8 struk a deal with, say, MCI, and hooked up their IP-to-voice converter to MCI's network (which is all IP anyway) and then SBC would just see all calls as long-distance from MCI?