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Phone Call To The Future

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Phone Call To The Future

December 26, 2003

By Jerri Stroud

Time Warner offers digital phone. Vonage Holdings sells broadband voice. Other companies call their service voice over packet or IP telecommunications. But to what all are referring is voice over Internet protocol: telephone service transmitted over data networks.

"Everyone is making up new words because they decided that the best way not to sell something was to call it VoIP," said Judy Reed Smith, chief executive of ACM Group Inc., a technology research firm.

"It's been around for a very long time."

But it's becoming a mainstream service only now.

Companies ranging from supermarkets to service stations, colleges to credit unions, have used IP technology to combine voice and data traffic on the same network. As a result, they've reduced the amount of wiring they need and have gained tremendous flexibility.

Companies like AT&T have been using IP technology to transmit telephone calls since the early 1990s. About that time, equipment makers such as Cisco Systems, Nortel Networks and 3Com introduced IP phone systems to replace traditional key systems or private branch exchanges.

As recently as three years ago, IP telephony was considered bleeding-edge technology. In those days, most voice calls transmitted over the Internet had a clipped or jittery tone that businesses rejected as unacceptable.

But that's changing. In the last month, several major companies have announced plans to offer Voip service to consumers and small businesses.

AT&T, which has offered Voip service to some businesses since 1997, will expand to consumers and small businesses in major U.S. markets early next year.

Time Warner, Sprint and MCI have announced plans for a joint Voip offering that will be expanded to most markets nationwide.

SBC Communications and Verizon, the nation's two largest local-phone companies, have announced IP service for consumers and business customers.

Savvis Communications added IP phone services to its data-network offerings about six months ago.

Charter Communications plans to offer IP-based telephone service in St. Louis and other markets next year. The cable company offers it in Madison, Wis.

Covad Communications, which sells high-speed Internet service to businesses and consumers, is planning to add voice services soon in partnership with Global Crossing.

Voip is "where the market is moving," said Marianne Gedeon, director of voice-data convergence for SBC. "If we want to be in the market, we need to be providing a voice over IP solution."

Mark Barber, vice president for telephony for Charter, said voice over IP "is a more versatile technology that paves the way for future services."

"The end user should have a more robust service, where they can integrate multiple media, such as video and voice calling."

Several changes have brought these companies into the IP fold.

Costs have come down, quality has improved and features have multiplied, making the technology a popular choice for companies that are expanding or moving to a new location.

In addition, federal courts and regulators have shied away from regulating VoIP.

This month, the Federal Communications Commission said that it would study IP telephony for another year but that the service could not be taxed in the interim. Meanwhile, a judge struck down a Minnesota utility commission's bid to regulate Vonage, a company that sells voice services transmitted from a consumer's high-speed Internet connection.

Others are striking a more cautious note.

New Millennium Research Council issued a report saying consumers could benefit from the technology. But the report said also that some safeguards should be put in place to assure that consumers keep access to phone service and that law enforcement and emergency services can function in the IP environment. The council, a Washington-based nonprofit group, examines policies related to telecommunication and technology.

Doing Away With The Switchboards

Several companies from St. Louis have been pioneers in using IP systems.

Schnuck Markets Inc. has been installing IP systems in new or remodeled stores for several years, said Bob Drury, senior vice president of logistics, manufacturing and information technology.

"The reason was that, in our stores, the cabling runs are long and expensive," he said. "We wanted to reduce costs," particularly when remodeling stores.

With an IP system, Schnuck could run one wire to serve its phones and checkout terminals.

"You can daisy-chain things together," Drury said. "That was unheard of" with traditional phone systems.

St. Charles Community College installed an IP phone system in January 2001 as part of a campus expansion program, said William Berry, vice president for administrative services.

"We did away with the main switchboard," he said. "All the telephone systems are just another feature of our underground fiber-optic network."

One of the biggest cost savings comes from moving or adding a new phone or computer. Before, the college had to call a phone technician to make a change.

With the new system, "You can just pretty much unplug your phone and just plug it into another jack," said Greg Wirth, the college's information technology administrator. "It's pretty easy."

An phone using IP technology has an Internet address, so the system knows where the phone has moved. Some systems use regular phones. Others require digital or IP phones.

"The other neat thing is that (the phone) gets its power from the network jack," Wirth said. "You don't have to worry about having it near a power plug." Also, the IP phone has a jack for attaching a computer.

But the flip side is that a power failure can knock out the phone system. Traditional phone systems have independent power, so they usually work during electrical blackouts. For that reason, keeping at least one circuit-switched line for emergencies, including 911 service, is usually a good idea.

Vantage Credit Union has had mixed results from its switch to IP phones, said Robert Socash, vice president of information technologies. The credit union has saved money on equipment and service with the system, which can be managed from any computer that's linked to the Internet, he said.

Also, the system sends customer calls to Vantage's branch in East St. Louis over the river to its service center in St. Louis, saving long-distance or 800-number costs.

But the company has some equipment from 3Com and some from Nortel. Sometimes the systems don't mesh.

Fixes From Home

Quality issues can arise when a company's data network isn't set up properly, said Rob McCormick, chief executive of Savvis.

In an IP phone system, a conversation is broken down into digital packages, called packets, that travel the network along with data packets for e-mail, computer files, Internet connections and everything else.

Changing a voice into packets uses the network more efficiently than circuit-switched calls because the packets don't include gaps in a conversation. When the voice packets reach the other end of a conversation, they're reassembled and turned back into sound. Voice packets are supposed to get priority over other types of data, but if they don't, they can sound choppy or clipped.

Adding voice to a data network "requires almost no bandwidth," McCormick said, "but it does require the network to be almost perfect."

Savvis began offering IP voice because many customers wanted to reduce their telephone costs and get additional functions, such as unified e-mail and voice mail.

But many customers couldn't afford to abandon their private branch exchanges, McCormick said. With such a customer, Savvis turns off the routing functions in the PBX so a computer gateway can manage the system.

IP systems give customers more features and flexibility than traditional phone systems, said Glenn Conley, president and chief executive of Metropark Communications Inc., a telephone-equipment firm in Olivette. Users can program the system to ring their office phones during work, their cell phones in drive time and their home phones in the evening. Or they can prioritize calls by phone number, sending some to voice mail while letting important calls through immediately.

For some customers, the best feature is integrated voice mail and e-mail. Voice messages are converted to a file and sent to employees computers. Employees can listen to the voice mail on their computer speakers, and forwarding a voice mail to a co-worker is as easy as sending an e-mail.

For many companies, the ease of managing an IP system is more important than any savings on long-distance fees, said Fred Brussee, vice chairman and chief executive of CT-Innovations Inc., a communication and equipment company in Chesterfield. Most of the IP phone systems can be managed through a Web interface, allowing for remote troubleshooting and reducing the need for service calls.

Drury, the Schnuck executive, said, "We can fix things from our homes over the Web."

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