VoIP and the SMBs - Tapping the Market (Cont'd)

Benefits, Challenges and the Regulatory Landscape
The benefits of an SMB implementing VoIP come in the form of both hard cost savings from reduced operating expenses and productivity improvements from converged databases, integrated data and voice communications, and advanced and mobile calling features.

Quantifiable cost savings from VoIP implementation include:
• Decreased expenses for moving, adding, changing and removing phone lines.
• Reduced or eliminated toll charges for intra- and inter-company long distance and local calling.
• Lower operating expenses from simplified network management.
• Elimination of 3rd-party conference bridging costs.
• Elimination of regulatory fees for federal line surcharges.
• Access to advanced call features without the costs.

There are also a number of productivity improvements that SMBs can benefit from by leveraging VoIP, including:
• More advanced, robust, and mobile voice and data features such as unified messaging, find me, follow me, and visual voicemail
• Integrated information services.
• Advanced multimedia conferencing and collaboration tools among multiple branch offices.

Challenges
There are number of roadblocks, uncertainties, and challenges hindering VoIP technology from gaining mass adoption within the SMB market, including:
• VoIP QoS considerations.
• Regulatory uncertainty.
• Disconnect between upper management and IT.
• A crowded vendor landscape and intense marketing hype.

Regulatory Landscape
With the growth of VoIP, a number of legacy service providers have begun lobbying the FCC to classify and regulate VoIP traffic as a “telecommunications service,” subject to the same regulatory rules and universal services fees as traditional voice calls. Currently, voice services offered by legacy wireline providers are subject to regulation and universal services taxes, while the new Internet telephony services against which they’re competing are not. Similarly, due to FCC classifications, cable companies’ broadband service offerings and telephone companies’ DSL service offerings are classified not as “telecommunication services,” but as “information services,” whose rates are exempt from certain regulations and fees that apply to standard POTS services.

How does this all affect small and medium businesses? If legacy service providers are able to lobby the FCC into re-classifying VoIP into a “telecommunications service,” VoIP providers will have to include the added cost of paying inter- and intra-state access charges and universal service funds contributions into price points of their offerings to SMBs. Regulatory rules will also shift the competitive landscape, potentially causing market consolidation and price disruptions.

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