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IP Telephony Going Mainstream

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IP Telephony Shows Signs Of Going Mainstream

October 18, 2004

By Patrick Mannion

Manhasset, N.Y. — The Fall 2004 Voice on the Net Conference in Boston this week expects to draw twice as much interest as it did last year, one of many signs that suggest voice-over-Internet Protocol technology is surging.

Two moves last week — Linksys' delivery of Voip adapters to Verizon and Office Depot's plans to sell the Voip phones and services of VoiceGlo — also point to IP telephony's growing ubiqui.

Linksys' delivery of Voip adapters to Verizon and Office Depot's plans to sell the Voip phones and services of VoiceGlo — also point to IP telephony's growing ubiquity.
Analysts predict good times for carriers offering Voip services as subscribers look to make low-cost over-the-Net calls and gain access to a range of services and features.

Still, technical and regulatory hurdles could keep Voip an add-on service — not a full phone-line replacement — for the foreseeable future.

But the pendulum is definitely swinging, said Scott Kargman, chief operating officer of, a Voip advocacy group and organizer of Fall VON 2004. The rising interest comes as the freeze that gripped the telecom industry since 2000 begins to thaw and as cable companies look to offer voice, data and video services to compete with DSL, local and long-distance operators, Kargman said.

The exploding interest coincides with both the emergence of improved network-monitoring tools that ensure quality-of-service and the convergence of the IP telephony community on the Session Initiation Protocol as the Voip signaling standard of choice.

Voip inflection

Market analysts are rushing to deliver optimistic Voip projections. Juniper Research said Voip telephony services will reach about 400,000 U.S. households by year's end, growing to 12.1 million, or 10 percent of U.S. households, by 2009. The global Voip market will contribute $32 billion to the total worldwide telephony market of $260 billion by 2009, accounting for some 12 percent of revenue. For its part, the Yankee Group predicts almost 1 million Voip subscribers by year's end, growing to 17.5 million U.S. households by the end of 2008 — up from 131,000 last year.

AT&T, Verizon and Qwest are committed to rolling out local Voip services in 2004, according to the Yankee Group, while Sprint, SBC and BellSouth are more cautious. Tangible proof of VoIP's move toward the mainstream include Linksys' deal to provide a two-port phone adapter to customers who sign up for Verizon Voip service and the CallVantage Voip service AT&T announced at Spring VON.

Beyond last week's Linksys/Verizon deal, office supply outlet Office Depot Inc. said it will sell VoiceGlo's Voip service to users of Office Depot's USB VoIP-enabled phones at more than 900 stores nationwide, and online, starting next month. Office Depot will offer customers five calling plans, at up to $19.95 per month for 1,000 minutes of local and long-distance calls in the United States and Canada.

Why now?

The reasons for VoIP's surging acceptance are many and varied, said Wayne Newitts, market development manager at Tektronix Inc., which develops Voip network analysis tools and equipment. Newitts makes this case: Carriers are driven by basic economics. Packet-based telephony makes more efficient use of bandwidth, "and carriers are trying to move away from having to support a packet-based protocol on top of their circuit-switched networks." Moving to all-IP greatly improves network support costs and bandwidth efficiency. Customers enjoy not only lower call costs but numerous services, including the ability to pick up a call anywhere by simply establishing an IP address.

But VoIP's explosion also has much to do with resolving many technical issues. Network management and quality-of-service issues have mostly been worked out, Newitts said. "Cisco and Nortel do provide levels of QoS as defined by standards and they can deliver the 8 kbits per second needed for voice." Still, the significant breakthrough was the standardization on Session Initiation Protocol, rather than H.323 or other contenders, as the signaling scheme for IP-based telephony, he said. "SIP won the battle thanks to Cisco's adoption of it and it helped set up a ubiquitous IP world," Newitts said.

But SIP still must overcome a number of issues, said Brian Fowler, chief technical officer of VoiceGlo (Fort Lauderdale, Fla.). One is scalability, as the number of subscribers grows from a few hundred thousand to several million. In network address translation, for example, Fowler sees SIP's need for border controllers and session controllers being costly with any significant load. So instead, a proprietary VoiceGlo signaling protocol — Glocode — will enable service for millions of users without requiring an operator to put a lot of money into the architecture to handle the load, Fowler said. Though proprietary, Fowler said, the protocol allows for internetworking with other protocols on the outside.

Not a clear path

Though Voip is ramping fast, it's not clear sailing just yet. Regulatory issues remain to be worked out and the uncertainty has left many wondering when, or if, to dive into VoIP. At issue is whether Voip services should be regulated as land line services are — or as cellular services are not. Regulation would probably involve federal and state taxes, plus federal mandates. That presents a conundrum for Voip providers: If the service becomes popular enough to be a replacement for land lines, then federal regulations loom larger and profits diminish. So providers are happy to have Voip considered just another service, but not a land line replacement.

Possible regulation is particularly galling to Jeff Pulver of in light of regulation-free cell phone services. "There are 160 million cell phone users in the U.S., many of which are replacing land line service with cell phone service," he said. "There are 600,000 Voip subscribers — why should we be regulated?"'s Kargman also argued for a hands-off approach. And if regulations are required, he listed an order of preference: self-regulation like the accounting industry, federal regulation or — "the worst-case scenario" — state-by-state regulation.

Technical hurdles

Along with regulatory uncertainty, the lack of dial-tone-like service in case of a power outage and the lack of E911 services have also cast a shadow over VoIP. Vonage is apparently taking the lead on E911 with a database system that associates an IP address with a home address, Pulver said. But for VoiceGlo's Fowler, "the database approach is not considered a true 911 solution." He mentioned other possible solutions — GPS, for example — but expressed skepticism. VoiceGlo is working on 911 and on dial-tone issues, Fowler said.

Pulver called the dial-tone issue a major hurdle, adding, "cell phones don't have dial-tone service either."

He re-emphasized that Voip is not a full land line replacement technology.

Innovation opportunities

Newitts of Tektronix also called security a major issue that, along with developing software to allow operators to bundle services, could be a major opportunity for those looking to design Voip solutions. But the innovation opportunities don't stop there.

Another area of innovation lies on the customer end. It includes finding a way to guarantee that real-time data like Voip and gaming will trump "best effort" data transmissions and have first call on a residence's broadband connection — even in the face of unpredictable upload requests from remote users on the network. "There are many solutions to tackle this problem, but they require expensive and managed infrastructure," said Douglas Spreng, chief executive officer of Ubicom Inc. (Mountain View, Calif.), which believes it has the solution.

Leveraging what strategic-marketing manager Keith Morris called the company's intimate knowledge of the communications and protocol stack, Ubicom developed algorithms and techniques to assess in real-time the available bandwidth over the last-mile connection, then applied advanced packet-by-packet analysis and inspection techniques. It condensed the combination into the StreamEngine software package for intelligent stream handling and advanced peer-to-peer networking, and bundled it with a hardware platform based on its IP3023 processor with memory, voice pump, ipOS multithreaded operating system and support for Atheros Communications' 802.11 radios.

If the platform is the router's muscle, the StreamEngine is the brains, exercising techniques like automatic traffic classification, rate matching, priority queueing (with 255 priority levels), dynamic fragmentation of packets to reduce delay for high-priority traffic and adaptive fragmentation where fragmentation is determined by the uplink speed. The latter is optimized for voice.

StreamEngine software is available now, selling for $10,000 to new customers. StreamEngine plans include accelerators for currently installed routers and modems, and adapters for DVD players and DTVs.

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