59 thoughts on “The Voice over IP Insurrection”

  1. WOW–sometimes it DOES PAY to read these blogs………as a large investor in Level3, I am not sure to cheer or run for the hills and come back in 10 years and ‘”SEE”” what works out in this RailRoad Driven PSTN market…………..

    WHO will win this “”VOIP WEAPONS OF MASS DIALING””” WAR?????? My company is named “”VoipNuke”’ and its NO accident it got its name when “”Voip WMD’s”” start really flying , my mantra is “”””When you SEE the FLASH(VZ), It will be too late””


  2. Not to distract from the main points of this article, I have a coiple of questions: As early as 1989, AT&T Network Systems had developed a product that packetized voice and carried on Frame Relay network. It did voice activity detection and also had a mechanism for intermediate nodes drop “tails” of the packets in response to congested network. Granted it is not VoIP and it was designed as a transmission product. Does this qualify as a “project addressing the use of data networks to transport voice”?

    I didn’t know that the real bill for True Voice was $800M. As I recall AT&T took out ads asking the public to try it. Surely the careful engineers at AT&T would have tested it before rolling the feature out. In my undersstanding the problem was that the feature depended on capabilites in segments of the connection that is outside AT&T control. An analogous situation arises in IP network as well. AT&T CallVantage claims that it carries voice in QoS enabled network, still it does not control one or both the tails of the connection.

  3. Aswath, I think this is something I have heard about – consumers completely rejected it and it was one of those bone headed moves by Joe Nacchio, which i discovered only after I had writeen broadbandits. Such a shame though. Wish I knew about this earlier. I

  4. AT&T should burn in hell and die. Who needs companies anymore that have CEO’s making 6 digits when local small business which increases competition works just as well?

  5. Hello,

    As I often do when I hear yet another person detail the demise of the telcoms, would Mr. Berninger bring us all up to speed on how the mobile operators will meet there demise as well? Please keep the hand waving to a minimum.

    Douglass Turner
    voice/sms: +354 895 5077

  6. Mobile operators will meet their “demise” with Wi-Fi/Wimax when people have alternatives to calling and downloading data other than the meter-them-to-death cellular networks. The cellular business model relies heavily on billing by the minute or with data, getting people to purchase expensive data bundles that charge you by the number of MB downloaded. It’s the old metering system and their organizations are built around that. The cash cow of the moment should have been 3G. But it’s not working as planned. Why? Who wants to pay six euros or more per MB? And how many MBs have you already consumed this month? You’ll never know till you get that horrible bill. Very customer unfriendly. They did not see the rise of Wi-Fi which is becoming more and more available. And now with Skype and other voice apps available on portable devices, we can see it coming.

  7. Daniel and Om, thank you for this very thorough and insanely informative article. It sheds a great deal of light on regulatory-related frustrations I recently posted about on my blog, from the poorly-informed standpoint of an end-user. You’ve earned yet another faithful reader 🙂

  8. Aswath had some questions:

    No – Voice Over Frame Relay does not count. The operative issue is benefits to end users ala Internet not internal PSTN efficiency. We could wait another 100 years and VoIP would not get “invented” at Bell Labs. I was on the first team at to react to VoIP and there existed useful elements around the labs that came together as a VoIP solution relatively quickly (during 1995), but Bell Labs was tasked to improve the PSTN not make it obsolete.

    AT&T did not publish a price tag on TrueVoice. I am publishing here first from direct sources that shall remain anonymous. Nothing about the feature depended on things outside of AT&T’s control unless you mean at customer
    premise. AT&T assumed customer premise equipment performed uniformly as per
    specifications. Wrong. AT&T could not sufficiently test the feature. All of these challenges and problems were due to the nature of the PSTN.

  9. USA the Corporate Welfare State. The Telco sector is not the only part. In 1997 the FCC was auctioning spectrum for G2-Cell and WLL for home, and most of US stayed adicted to wire. Recently 2004 more spectrum was handed out by the FCC to telcos for G3-Cell and WLL, but …. I live about 40mi south of NYC, NY, USA, in a builtup heavy populated area, and still cannot get DSL.

    Oil, agri-biz, or alternative fuels … Drugs and Stemcell research one discovers ways to manage illness, one may create permanent cures which does Corporate Welfare America want.

    Outsource middle-class/IT jobs, sell political favors for money, obtain corporate welfare by paying a politicians special interest (reelect fund) ….

  10. I use Sprint PCS for unlimited internet access on my laptop for only $15/month, and I normally get 128kbps streams up/down just fine.

  11. Om:

    Great piece! Saw it referenced on Slashdot. I would love to see more, especially as you turn this around and project forward. As an example, I believe that Skype will kill the current telephony business in just a few years. Skype is easy to use, frequently free, and has better voice quality than POTS. It already has 23 million downloads, over a billion minutes served, and just launched the Skype to POTS link.

  12. Frame relay and ATM (Asynchronous Transfer Mode) are both packet style transmission technologies from the slightly converted bellhead geeks.
    They both handle voice.
    They are priced, however by the bellhead marketing types whose plan over many decades is (was) to decrease prices by only a few percent per year.
    They planed to reserve most of the savings for themselves.
    It is not clear that IP is better than ATM, it is just under a different style of administration and priced drastically differently. That plan was disrupted by internet. Also the original plans to offer quick ATM call setup did not materialize. ATM circuits are now established manually in the style of leased lines. It is sort of like the days when POTS required human operators.

  13. Great leaps of history here. Quite parochial. And naive, too. Get a spell checker, do some research, and open your eyes.

  14. Interesting read, but as ‘the guru’, I wanted to hear more techy info on the technology barriers from you rather than a manager’s synopsis on the subject.

  15. If each new subdivision built in the US had individual residence wiring that the customer owned all the way out to an aggregation point and there were a method of buying out that wiring on existing subdivisions, the problem of connectivity would quickly subside. It doesn’t pay to get a T-1 to your house. If you have a 50 house subdivision, it might be perfectly manageable to get 2 or 3 and VOIP to a local network from then on. Right now those aggregation points are entirely owned by the incumbent carriers. There’s no reason why builders couldn’t put the inside/outside wiring interface at the aggregation point and allow commercial grade connectivity alternatives to be sold competitively to the entire subdivision.

  16. Prediction: The FCC and the existing telcom network will do everything they can to squash VoIP… The telcoms because they want to keep the status quo, obviously. But the FCC? It’s all about CALEA — the federal government’s continuing efforts to erode the constitution.

  17. I ran across this thread via Slashdot. The fact is that the Bellheads have been on notice for thirty years, not ten. The above link, i.e.


    points to an accurate timeline. The first two-way packet voice conversation occurred over the ARPANET in August 1974. I was on one end of that conversation.

    In the late 1970s the DoD was looking to modernize its phone system, and one widely-published study by Frank, Occhiogrosso and Gitman showed that PACKET-SWITCHED VOICE WOULD BE CHEAPER than circuit-switched voice. AT&T was bidding on the system and certainly read that study.

    The VoIP companies that emerged in the 90s deserve credit for commercializing packet voice, but many of their founders were in diapers when it was invented.

  18. Randy…. thank you for saying that and putting everything in perspective. thank you a million times … i think we have such short term memories that we forget the good work of people before us. we all stand on someone else’s shoulders and think it is the ground beneath us.

  19. Cudos. A very informative read indead. My question posed is how will the insurgens of VOIP into the business market (IE VIOP based PBXs and phone systems for offices and call centers) effect the general use of the technology in the public? If someone has the option to have the phone that rings on their desk ring at their home over their broadband based internet, will this help push VOIP more into the mainstream? The options are there and they sky is the limit.

    Nick Hill

  20. AT&T had been usiing packet voice for longhaul transport back in the mid to late 80s. Their ATM switch the BNS-200 was the first broadband voice transport coupled with ISDN handset they had all the capabilities that VoIP triumphs.

    [ddff-ltd] | global Broadband Strateiges

  21. Bell Labs had several smart people who were very well aware of the promise of packet-switched technology. In the early 1980s, Dave Sincoskie, then of Bell Labs, built some of the first known self-contained voice over Ethernet telephones. It wasn’t voice over IP because IP wasn’t finalized until 1983. But it *was* voice over packet, and it worked. I had one of his second-generation VoIP phones on my desk at Bellcore when I worked for Dave from 1984-91. We used them every day to call each other and the outside world through a packet-to-PSTN gateway — the very same model that commercial VoIP uses today.

    The problem then, as now, was telco marketing and upper management who were totally oblivious or even hostile to these developments. But that doesn’t mean pioneers like Dave shouldn’t get the credit, instead of those who came along well over a decade later when it had finally become fashionable.

  22. Really a great piece which clarifies a lot of stuff. Hope the Telecom Regulatory Authority of India takes note of it and ensures that consumer are not deprived of the benefits of VoIP.

  23. I loved the BLOG and all the added commentary.

    I just have one question, in the future of broadband and VOIP who will collect the lions share of the revenue (if there is any)?

    Will it be the ISP that the user subscribes to? Or rather will it be the “Access” provider who owns the last mile, e.g. the Baby Bells?

    My guess is that the Access providers, while potentially loosing the voice revenue, will still come out on top.

  24. To answer JD above, the one who will collect the “lion’s share”
    will most definitely be Microsoft (go read about TCPA, for instance). Our only hope that this doesn’t happen lies in Free Software.

  25. AT&T was not an ‘East Germany’ guarding the Berlin Wall between computers and Telecom. They felt they were bound by a 1933 Concent Decree to stay out of the computer industry. That is one reason they accepted the 1984 breakup, they realized that the automated switches they depended on were now general purpose computers with specialized software and possibly in violation of the 1933 Decree.

  26. I wonder how much you CAN regulate VoIP? I suppose there is some network latency, but if I don’t like the rules in North America, I could get a VoIP provider in Vanatu or Tonga (or wherever)? This would be my voice equivalent of an Email server/address/phone no.?

    As long as that guy can connect to PSTN locals around me, I have local service. As long as local VoIP providers will interconnect with me, I can talk to my friends for free. What are they going to do, block all IP from Vanatu?* Then the Russians will forward VoIP to Vanatu… It just gets sillier.

    The advantage of over-regulated government-monopoly PSTN is that it was pretty much a standard interconnect. Will we be reduced to a mish-mash of n-factorial bilateral interconnect agreements – “I’ll forward my VoIP to your people if, vice versa”?

    If we opt for the anarchy model – everyone their own VoIP supplier – then the local PSTN connect, and the suppliers of DNS equivalent “phone numbers”, become the bottleneck, the gonad-grip control points. Otherwise, how does grandma with her black dial phone call you?

    (If she has to dial Vanatu at Bell rates, she’ll dial and hang up; then I’ll look at the caller-id and call her back for free.)

    Of course, with a critical mass that becomes unimportant. Most of the people you want to talk to will also be on VoIP.

    (* IIRC, at one point, the NorthWest Territories phone company – Bell Canada? – tried blocking cheap long distance companies’ incoming calls. Rates were asymetrically high locally. This was a service where you call an 800 number, enter the called number, and wait for their computer to call you and the other party. First they blocked that number. Then they had to block any of several hundred numbers, and eventually whole area codes. Then they finally admitted it was impossible for PSTN to beat a computer; they had to adjust their usurious rates accordingly.)

    and how do I get paragraph breaks here?

  27. That’s the most insightful perspective on the bigger picture that I’Äôve ever read, fantastic stuff. At Loose Connection in Brighton, we’ve seen a huge increase in usage of VoIP-esque apps (such as Skype) in our free hotspots. We’re also leading some of the first WiMAX trials in the UK and I absolutely believe in the disruptive nature that these technologies will have against the incumbent providers; VoIP is a key benefit especially with distributed businesses such as corporates or local government. When each base station can pump 16gbps wirelessly over 30miles who needs PSTN?

  28. Three digital waves generated by long-distance, datacomm and mobility competition crashed over the info-media landscape in the past 20 years. Digitization was a mechanism by which service providers balanced cost, coverage, capacity and clarity with ubiquity, usability and unit cost. Competitive service providers and the capital markets learned that getting, keeping and stimulating demand on rapidly obsoleting capital bases drives income statements and balance sheets.

    In the aftermath of these market-driven waves, the 100-year-old, heavily regulated PSTN and the 80-year-old, moderately regulated media segments were joined by the entirely new, relatively unregulated, two-way datacomm and wireless segments. The result was growing chaos, which the Telecom and Cable Acts were meant ’Äî but failed ’Äî to resolve.

    To rationalize and counter this chaos, the markets embraced the concept of convergence, epitomizing the ’Äúall in one’Äù approach in vertically integrated CLECs (PSTN) and horizontally oriented application service providers (Internet). Unfortunately, vertically integrated service providers could not scale all layers of their operations and investment effectively across a demand environment where everyone and every organization wanted its converged bundle put together differently. And while ASPs appeared to scale more effectively along those lines, IP, as a four-layer protocol, was prone to poor QOS and costs that actually snowballed in a world of distributed processing. In the end, more than $250 billion of promise and hype got washed out to sea.

    Since then, all four segments have followed the immutable laws of Moore and Metcalf in their supply evolution, while demand has continued to evolve at a rapid and varied pace. At the same time, IP has grown up as a ready-for-prime-time, scalable seven-layer protocol stack and represents the foundation for the fourth and final digital wave.

    We see that wave developing rapidly, but believe it will come from a different direction. Most expect it to start in the migration from TDM to IP at the customer premises and in the Class 5-to-softswitch conversion process. In reality, IP and VoIP have scaled in the WAN and across horizontal layers of the stack over the last five years.

    The growing wave will crash against vertically integrated service providers and undo monopoly bandwidth bottlenecks. Today, one megabyte of synchronous, high-QOS MAN bandwidth for commercial applications costs about $200 a month in developed countries and $500 a month in less competitive markets. When contrasted with actual hardware, software and operating costs in the LAN and WAN today, those numbers should be closer to $10 and $20, respectively. Furthermore, the bulk of the monopoly cash flow actually derives from the terminating, not originating, side of calls or sessions.

    There is a need to break down the likely developments that will lead to a final and precipitous collapse in access pricing and develop the revenue and demand upside. Our crystal ball says it’s a pretty good outcome, notwithstanding a lot of wrenching change. Didn’t that happen three times previously?

  29. I’m not sure what Dan’s saying here other than emphasizing what many of us have noted for several years — VOIP is the future of telecom. It’s great to feel good about VOIP, but that’s not enough. A couple examples:

    – Dan asks the crucial trillion dollar question — “What happens to the existing global telecom industry?” then doesn’t answer it. “It goes to zero” isn’t helpful, unless one is advocating the same solution for incumbent telcos as for the highways Dan uses as his analogy: nationalization. (I don’t think that’s Dan’s argument.)

    – “The forces putting the Internet in a position to displace the PSTN have nothing to do with voice as an application.” Huh? This directly contradicts Dan’s own argument. I used to pay $19.95/month for dial-up Internet access, and now I pay $45/month for my cable modem. Where is the great price reduction driven by Moore’s Law? Answer: It shows up in the fact that I pay little or nothing for the voice *application* on top of that network, and there is room for innovation because the voice offering no longer defines the network.

    Look, I’m as big an advocate of VOIP as anyone, and a fan of Dan’s work. But if we want this insurrection to succeed, now is the time to face the hard questions.


  30. First was the Computer Inquiry II of 1982, which took effect 1/1/83. We lived in limbo for a year at AT&T as our 3B20 Simplex (a knockoff of the 3B20 Duplex that ran 5ESS) could not be sold with an FPU, since that would be a computer. We sold a few, though I don’t recall whether they ever had an FPU. Ours didn’t, though it was only a pre-production unit.

    DEC thrived partly because its minis ran our earlier ESS systems, and of course, Unix was born there.

    (Seeing Phil Karn’s name again reminds me of the Usenet controversy over compact disc technology. A number of the Labs people had a high-spirited discussion of whether digital music was worth the trouble. What do you think now, Phil?)

    In truth, telephone switching and computers have been building on each other for their entire history. but as Glenn pointed out, the Telecomms Act of 1934 put up a wall there.

  31. This is a very interesting article but I think it misses one point in looking back at pre-divestiture AT&T. Other folks pointed out that Bell Labs had the smarts to figure out packetized voice and deploy it if called upon to. The problem was that much of AT&T was a product of the heavy regulation it lived under. AT&T and the independents essentially had a pact with the government. Their job was to provide highly reliable voice service to as much as the population as possible at a reasonable cost; if they did so (and nothing else), the government would allow these companies to earn a modest yet stable return on investement. When the events of the late 60s and 70s threatened the return on Ma Bell’s investment (the federal gov’t, for better or worse, was reneging on their end of the deal) AT&T reacted in ways that should have been completely predictable.

    So let’s get something straight… Bell Labs and the Bell System did an excellent job at what they were tasked to do. I think the author of the original article completely discounts/underestimates how large of a task AT&T had. Wiring up an entire nation the size of the US for telephone service at a reasonable cost was an incredible feat. (Can you imagine receiving an “all circuits busy” message on a regular basis or having to send a telegram to someone because they couldn’t afford telephone service?) The problem was that once AT&T’s mission of Universal Service was largely accomplished, society as whole changed their view of what the role of regulation should play in “naturally monopolistic” indutries and the company was not equipped to adapt. One could even infer that AT&T’s makeup virtually guaranteed their downfall once Universal Service was achieved. By being kept out of “data processing,” there was no where for AT&T to go. (And the future of voice was data processing!)

    VoIP insurrection is not about taking action against monopolistic communication providers; it’s taking action against highly regulated business environments. Compaines like {pick your favorite ILEC} push hard for regulation because that’s their heritage and what they know; regulation is what fosters their existence. However, the regulated model came about from the ugly competition in the early part of the 20th century. Forcing the regulatory pendulum to swing all the way back to where it was during that period of history could very well introduce some of the same problems. (Lack of universal interconnectivity, dominant players in the industry strongarming the little guys, etc.) The trick will be to use VoIP technology and leverage its benefits without setting us back in the area of basic voice communication between any two points at reasonable cost. If VoIP is to replace the PSTN, it must do so by continuing the mandates of the PSTN, most notably universal service and E911. It needs to do so in a way that keeps us out of heavily regulated environments (that do not encourage innovation) yet insure everyone’s basic communication needs are met. I think it can be done, but there are devils in the details that need to worked out.

  32. Interesting article, but a little too over-hyped about VoIP. Have you ever actually used the technology for any period of time? I have, and have concluded that it is *still* not ready for prime time more than nine years after introduction.

    Here are the two biggest problems: (1) highly variable sound quality based on bandwidth limitations and/or network traffic issues, and (2) no guaranteed Quality of Service (QoS) based on underlying limitations of TCP/IP technology. For all its failings, these are not issues that POTS has at all, particularly in the local loop.

    I’ve just switched back to POTS, because VoIP on my 1 megabit uplink is far too variable to be usable. It sounds fine for a while, and then my voice turns into a robot and is unusable. Maybe in another nine or ten years [sigh] it will be useable on the Internet.

  33. VoIP can’t be stopped if ppl want to use it. Example Skype, most of my friends use it, and since I dont use the cell phone or own a fixed line there is not much use for a cell. But this is a situation at college, so once work starts things change. The point is that there are about 10 of us who use Skype and this would be the bulk of the phone bill if I was to use the phone. So how much are the telcos losing now?

    P.S. nice work on the paper 🙂

  34. VoIP can’t be stopped if ppl want to use it. Example Skype, most of my friends use it, and since I dont use the cell phone or own a fixed line there is not much use for a cell. But this is a situation at college, so once work starts things change. The point is that there are about 10 of us who use Skype and this would be the bulk of the phone bill if I was to use the phone. So how much are the telcos losing now?

    P.S. nice work on the paper 🙂

  35. Daniel:

    Thanks for responding to my questions. As a followup:

    It is a bit of rash conclusion to characterize the packet voice work at BL to be Packet over Frame Relay and dismiss it. The packetization technology could have been used on any packet network. Yes, the initial application was for trunk efficiency; still it benefited the consumers. Personally speaking, that technology increased the call completion rate to India, which in turn reduced the price considerably. From a consumer’Äôs point of view this is useful rather than a philosophical position of obsolence of PSTN.

    Many a VoIP provider requires a subscriber to access the service through an ATA. This limits many of the features that are possible because of the rich signaling protocol. For example call waiting is limited. Here is an example of some realizations of VoIP has artificially limited the features available to the users. Very few proponents of VoIP, especially those motivated by benefits to the users, have used their bully pulpit to change this situation. I would like to know your thoughts on this matter.

    I am not sure I fully understand the issues related to customer premise regarding TrueVoice. Is it that the house wiring and the local loop were mostly analog and so can carry only 3 kHZ voice? In any event, this should not have been total surprise to the project. At that time AT&T prided itself in the extensive testing that was conducted. (http://repo-nt.tcc.virginia.edu/classes/tcc315/Resources/ALM/Telephone/TVconsumers.html; http://repo-nt.tcc.virginia.edu/classes/tcc315/Resources/ALM/Telephone/truevoice.html). Still AT&T couldn’Äôt verify their assumptions regarding the performance of CPE? Just for this, PSTN must be condemned? Also we have to keep in mind that once the access loop was digitized with ISDN, a new capability called 7 kHz voice was introduced (some 5 years earlier).

    More importantly, considering the present time, how would ATA based service provider fare? I posit that the situation is no different. Upgrading the ATA is not possible because the service provider may have access to only one side and not the other and most certainly the telephone and the wiring connected to the ATA can not be controlled. Do we have to look for an alternate transport network?


  36. I think somehow this got off on a tangent. Packetized voice and VoIP are two different things from the perspective of the article. The PSTN is predominately packetized (we don’t think TDM is real time when it’s got time division right in the name do we?) but it’s the difference of a largely open and standards based medium carrying it versus a proprietary and tightly controlled medium. The P in PSTN should have stood for privately since the only one’s with control even today is the ILEC. The internet gave way to a medium that while predominately contingent on the PSTN still is quickly eroding that stronghold due to the technologies emerging. Cable internet for one, Powerline, wireless and others are overpowering the ILEC’s hold on your telecommunications. Make no mistake VoIP is here to stay and should laregly stay unregulated. What is constantly forgotten is that the FCC is behind denying the wishes of the telco’s to have so called “fair regulation”, but moreover is that other large companies have a vested interest in it too. You don’t really think that cable companies that are playing in that field really want to lose their advantage over the telco’s by backing legislation to charge themselves? Are we really that gullible to believe that the likes of Cisco (now vested with Vonage to provide these types of servicecs) wants to do the same and hurt the emergence of their products? So often we see one side of the story and grab hold fearing draconian measures are taking place to thwart the little guy when in reality things are quite the opposite and indeed capitalism is still in effect. Everyone needs to take a step back and think this through again. Yes the telco’s are threatened, yes they are upset, yes they have a bankroll, but so do others and last I checked capitalism thrived on the people looking after their own pocketbooks and not everyone elses. I also find it funny to see how many people are so fooled by the idea that the the PSTN and VoIP are so coupled together. Or that similar technologies are so easily implimented. The are indeed and will stay two totally different mediums until the ultimate demise of the PSTN as we know it. Does anyone really think that because their modem uses the PSTN that an IP packet inherently can traverse it as well, or that because the PSTN is packetized as is and IP packet that the phone on the other end let alone the switch carrying the call knows what an IP packet is? Wake up and smell the solder folks, the one issue that remains on why VoIP has to grow still is that at some point on the network there has to be, without question, an interface to get onto the PSTN and thus a cost incurred. But what will happen to the phone numbers we all know and love? Anyone hear of IPv6? Yes that will be your phone number (and I would predict that will happen in under 10 years) but that will suck…so what will you do? You’ll use DNS…easy answers, but not so easy to do on the spot. Moreover why would anyone want a “standard voice call” when video will be the predominate market growth area around this time frame. We are so hung up on “can you hear me now” that we forget to look to the future of “why mr Jones why on earth are you still in your bath robe during your business teleconference” that is so quickly arriving. Voice is a disposable app that shall quickly get displaced, get on the bus or get run over by it because this revolution hasn’t even begun to happen.

    Todd Keller
    Senior Engineer
    NSI Communications
    VoIP/Business Convergence Provider

  37. Looks like we got back on topic a bit but lets also not forget a few things here in that what this is all about isn’t where we were as much as where we are going.

    – Dan asks the crucial trillion dollar question — “What happens to the existing global telecom industry?” then doesn’t answer it. “It goes to zero” isn’t helpful, unless one is advocating the same solution for incumbent telcos as for the highways Dan uses as his analogy: nationalization. (I don’t think that’s Dan’s argument.)

    This isn’t a crucial question in the slightest. The analogies were an example of lesson’s learned not of repeats of mistakes. The reality is that the PSTN as it is now will no longer be. It will vanish into the past to collect dust.

    – “The forces putting the Internet in a position to displace the PSTN have nothing to do with voice as an application.” Huh? This directly contradicts Dan’s own argument. I used to pay $19.95/month for dial-up Internet access, and now I pay $45/month for my cable modem. Where is the great price reduction driven by Moore’s Law? Answer: It shows up in the fact that I pay little or nothing for the voice *application* on top of that network, and there is room for innovation because the voice offering no longer defines the network.

    No this is the most common misconception of high speed internet I know of. The cost savings you seek lie in 2 aspects. Firstly the time saved in getting those files and websites in 1/10th the time it would have taken on dial up for only double the cost. Secondly you are getting 10x the speed for double the cost. The numbers for me are obvious and for most others are as well. My time is worth money and I am willing to spend a little to save a lot.

    I also notice a comment on IP becoming seven layer, when the hell did IP grow? It has always been 4 layers, TCP/IP has been 7 layers but then my next question is if that is what was meant then when the hell was it not 7 layers? The only thing that grew was the devices carrying it to be able to actually understand and USE all 7 layers and even that is a stretch. It’s been ready for prime time for a long time, it was the networks that carried it that haven’t.

    (1) highly variable sound quality based on bandwidth limitations and/or network traffic issues, (2) no guaranteed Quality of Service (QoS) based on underlying limitations of TCP/IP technology. For all its failings, these are not issues that POTS has at all, particularly in the local loop

    My comment above applies but so does one other issue, you were using a provider that could not give you any QoS and as such you were a victim of your provider not your VoIP company. Don’t judge the tech based on your experience with a problem. Nobody blames the tree they ran into with their car. It’s not about the service it’s about the carrier you had to get you to the service. So the PSTN doesn’t have these same problems? What is an “All circuits are busy message” then? And these are limitations of TCP/IP? When did the technology become the problem? We can all say it’s a problem with the technology but we must also take some blame on ourselves or other aspects. If a tire blows out on our car, was it the tire manufaturer’s fault for not making a tire correctly, or was it my fault for trying to go 145 MPH for 3 hours straight?

    Last but not least:
    Many a VoIP provider requires a subscriber to access the service through an ATA. This limits many of the features that are possible because of the rich signaling protocol.

    How do you figure this? All and ATA is amounts to exactly what the acronym stands for, an Analog Telephone Adapter. This has nothing to do with limiting VoIP, it helps it. How many people have Cat 5 Cables in their house strung to everywere they have a phone? How many people want to pay to have it done? How many have the switches to terminate all that? It’s a process and the ATA’s fit the niche nicely by providing a pathway to adoption. Hore over you say that the ATA’s “rich signaling protocol” is a problem? then change it. The ATA is simply the hardware, the software loaded on it determines the protocol and feature set.

    Simply put folks I see that almost everyone here has given some GREAT history lesson’s and everyone has had some great comments and insight. I don’t mean for any of my posts to be taken as negative, and I do appologize for anyone that does, but I do get frustrated in the stigma that propagates about all of this unwarranted because of ignorance and or propaganda that is due to tunnel visionaries that see the light but only from one side of the picture.

    Lets put it in perspective and think of it as a process. In order for us to get to point C we must first travel through points A and B. The PSTN must go, that can only happen through time as adoption spreads, then and only then can it move to the top where the predominance of calls are VoIP and not traverse the “PSTN” but rather the internet in whatever form it takes.

  38. Todd,

    Thanks for underscoring the fact that IP was (and is) a 4 layer protocol stack. That’s why you had the boom and bust of the asynchronous internet. The additional 3 layers have been built by competitive market players, making IP (or whatever you want to call it) ready for primetime.

    Before you critique others, I think you need to break the PSTN down into piece parts and understand what is and isn’t competitive, and what is and isn’t tied to your “separate internet”.

    Last time I checked they ran on a lot of common elements. Ask your CIO where NSI gets it’s access to the internet. What facility do you use at home to obtain access? How were those facilities built and paid for?

    There are 7 layers to a service provisioning model (and within those 7 layers, each has another 7 layers, and another and another; you as a systems engineer should appreciate this).

    As well, there are geographic boundaries (LAN, MAN, WAN) that are context (application and market) and regulatory dependent.

    Lastly, there are essentially 4 different network topologies: telco, data, broadcast, mobility; each with its own special mix of elements.

    For you to reject 100 years of history doesn’t jive with market reality (revenues, profit margins and ROI).

    I guess my favorite example is the development of the internet itself. In addition to all the research and DOD precedents in the 60s and 70s, it was the competitive WAN/IXC forces in the 80s that led to the ILEC introduction of flat rate local access. This in turn let guys like Steve Case distribute low cost data routers and access points to provide the transport and access underpinnings of your internet. Then the addressing layers (www) were added. Then your translation layers (html) were added. But in the core public internet WAN, development stopped there, circa 1996. Individual applications and private (subscription) service providers added additional layers. The bust made made it painfully clear that these standalone apps and solutions didn’t scale without the core WAN being upgraded.

    Over the past 5 years, these core layers have begun to be added for data and voice: LCR, CDR, QoS, security, etc…

    The reality of Internet 1 was that it was an insecure, asynchronous, glorified, database lookup. Don’t get me wrong, I think it was and is great. From it, all the “IP-related” components and platforms have scaled to a point where they can begin disintermediating the vertically integrated PSTN service provider model.

    Lastly, a lot of your broadband access presumptions are flat out wrong. They contributed to the hype and the wasted $250 billion of investment. That said, there are topologies and strategies that can drop current access pricing by 95+% within 2-3 years.


  39. I really enjoy the PHD’s of VoIP and see the ego’s of all that research that is done. Champion communications is all about success and accomplishing it through Network marketing. The company that HAS VoIP and has WHOLESALED it to the HUGE companies. You guys go for it.. Remember me….. when you have exhausted all the rest…championcommunications.biz/spiritwoman… when you go through the rest of the wannabees. God Bless you all.

  40. Michael,

    Thanks to your book learnings, and pointing out that IP has had an additional 3 mystery layers onto it by other providers. Your interesting point of view is not without merit however is without basis in technical grounding. QoS is and never was a “layer” within IP nor security. It is an extension of the full TCP/IP stack which last I checked was credited to DoD for it’s creation. A slight misnomer but close enough to be accurate for this arguement.

    You state I should break the PSTN into it’s elements, and then don’t truely do so yourself short of vague and not entirely accurate comments for todays day and age. But I shall use one of your breakdowns and then expand upon such for my example. Yes typically these worlds share common backbone and interest, but first of which is the LAN which is extremely rare for the telco or other provider to “own”, MAN’s in contrast can frequently use the PSTN as a transport. WAN’s typically use a long haul provider for it’s access, of which last I checked are typically not what I would consider PSTN as they are “privately” owned (i.e. by the company providing) and while still governed by the PUC is quickly eroding into a competetive and non related industry.

    An example of this is that depending on which job funtion (yes I hold more than just a position with NSI and also hold a position with a DoD entity) I use several long haul providers. Some of which I use absolutely no “PSTN” access to get to (depending on city and availability). In any case I can define it further if you like but this should be sufficient for the rest of the arguement.

    Now on to the other “additional layers” comment, of which none of these are directly related to your mistatements in that they are merely implimentions of a layer in the TCP/IP stack. None truely unique as the model was defined around that concept and they took hold due to popularity (not because they were a new concept to start with). Not withstanding as well is your comment of “But in the core public internet WAN, development stopped there, circa 1996.” which is blatantly not true. VoIP has its birth in that time frame and was not a flop due to non research. It has failed for the same reason it continues to fail in todays businesses and homes. A failure to properly engineer the contidions it is resident in. A 56k Frame Relay circuit is in no way prepared to handle VoIP traffic for a small branch office with 2-3 calls on at any given time. Let alone the data they are using. But because it used the same infrastructure it “must be able to deal with that.” This is such a common mistake in todays businesses that it has stimatized VoIP to it’s slow growth.

    You also state, “The reality of Internet 1 was that it was an insecure, asynchronous, glorified, database lookup.” Since when did this change as well? It still IS exactly as you describe (unless you count AOL’s wonderful “firewall” feature or something silly like that.

    And lets not forget you state, “begin disintermediating the vertically integrated PSTN service provider model” in which I also ask has it only begun? If this has begun then wouldn’t it stand to reason that the status quo is not the same as it was in the 90’s when you say everything stopped? Or when you also state that it’s disintermediating the PSTN do you simply mean that you feel it’s given them a different way to carry voice instead of TDM?

    Morover you claim my assertions on broadband to be false but don’t in the slightest actually refute it. How are they false? (Another case in point along these lines is your statement that this all somehow had to do with ROI, etc. and how I somehow rejected 100 years of history)

    If you want this to be an intellectual conversation and debate I am more than happy to oblige but at least back up what you say with some data, and try to keep it to something you can back up rather than turn it into an acronym spewing session in which you and I may or may not agree on the definitions of such or other area’s. It’s usually good practice to level the field with definitions of your stance.

  41. Interesting side note there spiritwoman, your link in your signature block (if that’s what you can call it, not sure it’s really a “signature block” per se) is ironically not correct and yet your proposing you are from a company that doesn’t fail in this? Just found it ironic is all, nothing meant by it but a bit of humor. (The .biz is simply a .bi in the link). Figured maybe a fruidian slip of the keypad? At least until I added the z and found the site.

  42. Bellheads had ATM, packet switching, as the roadmaped future before the Internet was on the radar screen of possibilities. So no, netheads have always been the winners. It was a matter of which net: the ATM network or the Internet. As it turned out, ATM is now used to carry the Internet .. they both won.

  43. A few comments… I’m using VOIP through http://www.sipphone.com . It works quite well, but delays are considerably more than with PSTN. Of course, cellphone delays are similar. We had similar delays when international PSTN calls were carried by satellite. Will consumers put up with the delays? Per minute pricing on long distance PSTN calls seems to be approaching the access fees for final delivery at the destination of the call.

    I remember seeing an ANALOG packet switching system in the early 1970s. It was called TASSI (I think that’s the spelling) and was used on the undersea cable from San Luis Obispo CA to Hawaii. This cable was a single piece of coax and had vacuum tube amplifiers on the bottom of the ocean. It used frequency division multiplexing with each voice converted to a single sideband RF signal on the coax (remember the “monkey chatter” you used to hear on long distance telephone calls from interference from adjacent carriers?). Anyway, TASSI would fill the dead space on one channel with another voice requiring delivery. Since most voice conversations tend to be half duplex (one person talks, the other listens, then they switch roles), this doubled the capacity of the cable.

    As to the future of telecom companies, it seems there are several components to a telecom company. These are the local infrastructure (local loops), long distance circuits (all digital now), and switches (both local and long distance). The change to VOIP would only involve the switches (change from circuit to packet switching). It seems that telecoms would still play a large role in providing circuits and some switching.

    As to regulation of VOIP, it seems to me that there is indeed some sort of unfair playing field at the moment in that telephone companies have to pay into universal service funds, etc. Even if these costs are listed separately on your bill, that does put them at a cost disadvantage to other communications methods that do not need to charge for this. However, if your local internet connectivity provider were to ALSO pay similar fees, it doesn’t seem that a VOIP provider (which seems to just be a directory service unless they actually drop you onto PSTN) would not have to pay the fee. Communications businesses (those that actually provide the circuits) should have similar taxation (either reducing taxes on PSTN or increasing them on internet connectivity providers. How the FCC can claim that an internet service provider is an “information service” and not a “communications service” is beyond me.

    Finally (will it ever end?), it seems that even though there currently appears to be a bandwidth glut, bandwidth does cost money. It seems that the actual metric should be bits time distance. If you are running an application that requires a lower bandwidth and run it for less time, more bandwidth is available on shared media (everything but the local loop on DSL) for other users. As users demand more bandwidth for more time, additional infrastructure needs to be built, and that costs something. Further, distance becomes a consideration since a shorter distance transaction frees up bandwidth on additional hops that were used on a longer distance transactions that are now not used. It may be at this point that the typical bandwidth demands of an internet user are too cheap to meter. Will that be the case when thousands of California users request different high definition video streams from Europe simultaneously? Additional bandwidth on the infrastructure to support this will cost something, and someone gets to pay for it. Should low bandwidth users pay less?

    FCC Rules online at http://www.hallikainen.com

  44. The author makes some great points, but I can’t believe he didn’t mention Skype!!!

    Mark my words, Skype is THE PSTN killer. If you haven’t used it – try it. You can talk from US to China to Europe and it sounds crystal clear, better than a landline or cell phone!

  45. When WiMax becomes available, I wonder if that will change the face of cellular service. It would seem that Pulver’s FWD would be a likely alternative for cellular service since WiFi based calls would be free, other than the cost of the connection, if applicable. PDA’s with facilities for VOIP may easily replace non wifi enabled cellphones as a preferred method of making phone calls.

  46. I have read the comments about Skype, and I agree that it is a program that works well without any hassle. It’s not going to make a big impact though. It uses a proprietary protocol rather than an open standard like SIP, its routing algorithm used to traverse firewalls and NAT is currently flawed (a call between two European people can get routed through Australia) and it’s stuck to PCs (and Pocket PCs) that have Skype software. BT will hopefully release a full blown SIP solution in the UK in the coming years (so far we can purchase a VoIP service over broadband but only as a 2nd line, due to legal emergency call regulations).

    What I can say about Skype is that it will at least accustom people to the idea of enjoying a conversation with someone in high quality sound, for less. Ideally the telcos will make the switch as transparent as possible for those who still want to be able to pick up a regular handset.

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