The only publication dedicated to OSS Volume 1, Issue 2 - June 2004 |
|
VoIP Fuels OSS, but Will Regulators Crash the Party? (cont'd) "IP starts to flatten out the world a lot, and the U.S. becomes less important," says Andrew Hurrell, Director of Marketing for Ottawa-based Atreus Systems, an OSS provider focused on IP service creation and delivery. Hurrell, a veteran of industry giants such as Nortel and Bell Canada adds that, "being the richest nation doesn't matter in this case because the U.S. isn't the most populous. The U.S. doesn't matter a whole lot in terms of broadband penetration anymore. The rest of the world will drive this technology." There is another problem with some of the Senate's perspective on VoIP, as the focus is on bringing lower cost voice service to consumers. This is most apparent in a letter from Sen. Ron Wyden of Oregon, co-author of the Internet Tax Freedom Act and the Internet Tax Non-Discrimination Act. Wyden states in his letter to the FCC that "VoIP holds tremendous promise in offering low-cost voice service to American consumers." He rightly points out that disparate treatment of VoIP - with rules varying from state to state - creates unnecessary barriers and holds back investment, a sentiment the other senators share. The problem, however, is the idea that VoIP is simply a means to provide lower cost voice. If VoIP is viewed this way, and regulated as such, it could lead to its downfall in the United States. VoIP Can't Only Be About Low-Cost Voice The problem with viewing VoIP as nothing more than cheap voice service is that it may never be taken seriously as being a bulletproof technology. "The LINUX sub-culture mindset plays a role here. VoIP is a living science project and makes for cool programming, but it's difficult to scale, to maintain, and to run a business on. I see the guys who treat this like a huge HAM radio as the Achilles Heel. They're pioneering, but it's tough to build a business on something you can't count on." The only rules made thus far around VoIP involve a decision not to regulate Internet-based services like Pulver.com. Further, Vonage has been making news - and was ruled a phone company in Illinois - but its service can't be taken seriously as a business-grade offering for specific technical reasons (see below). "I think VoIP on its own, despite what Vonage will say, is not a sustainable business in the current environment and given the billing models that exist," says Alan Sheehan, chief technology officer for Interactive Enterprise, one of the world's leading cable services activation software providers. Without access to lucrative business markets, pure-play VoIP providers are likely to run out of momentum and funds quickly. Similarly, if the waves of CLECs entering the VoIP game focus only on low cost voice, they will have aimed too low and will cut themselves out of their real potential for competitive advantage and profitability. If the regulatory structure that's ultimately created focuses on VoIP as a pure voice technology, it would not only increase the possibility of regulating VoIP just as POTS is regulated today, but could also result in it being difficult to deploy integrated voice applications because of tariffs, taxes and state-to-state variations. For example, imagine several partnering companies in different states holding network-based meetings using integrated voice, video, white boarding and messaging all over a mesh IP VPN that hits different provider networks. If voice is singled out in the regulations, this kind of application can become unnecessarily difficult and expensive to deploy. This is not for technology reasons, but because of accounting, taxes, and surcharges designed for a regulated, monopoly environment that differs for every end-point on the call. This is the kind of challenge cable MSOs and CLECs face today as they roll out VoIP services. MSOs and CLECs Say - To Heck with Them... Cable operators, unlike most incumbent telcos, recognize that the future of VoIP is in integrated services. To them, VoIP is one more service to integrate into a pipe that already delivers home entertainment and broadband. "They are ready in the cable environment. The video network is always on, and adding voice is reasonably easy," says Sheehan of his company's experiences in helping MSOs build a service fulfillment infrastructure for VoIP. OSS Readiness One of the driving issues in VoIP is quality. VoIP has always been highly sensitive to QoS issues and is a service that must be managed end-to-end to be truly reliable. One of the problems with Vonage's approach, for example, is that it's dependent upon the user's broadband connection being highly reliable and having plenty of bandwidth. Unlike a cable operator, Vonage cannot segment the network at the transport layer to provide a clear path for its VoIP traffic. "They have no way to monitor your end point unless they put something on your PC," says Nelson. In short, this limitation means the service is not really reliable enough for users other than those at the lowest end of the market. This is where the economic equation begins to make less sense. In order to provide a fully managed VoIP service, something has to be deployed at each end point to provide statistics and diagnostic capability to the operator. The problem, however, is that VoIP - and broadband in general - is already a low margin service. "Adding even $5 in cost to an end point destroys the whole business model," argues Nelson.
© 2004, All information contained herein is the sole property of Pipeline Publishing, LLC. Pipeline Publishing LLC reserves all rights and privileges regarding the use of this information. Any unauthorized use, such as copying, modifying, or reprinting, will be prosecuted under the fullest extent under the governing law. |