Fall VON 2002
by John Latta
Issue 0238 10/25/02
Ocotber 7-11, 2002
Let there be no mistake this is Jeff Pulvers
conference. Attendees are like family. VON was a very good event.
Jeff Pulver gave the opening presentation on the second
day of VON. His view of the state of the industry framed the conference.
It was an impassioned plea for a re-examination in these difficult economic
times. Points made include:
The Internet would absorb the voice as just another application.
The future of communications is IP communications.
The impediment today is the lack of customers.
We as an industry have been limited in our thinking based
on what previously existed rather than what was possible.
The next generation communications solutions will like
communities using free spectrum (802.11x) wireless technologies. Look
for this to seriously challenge the growth of 3G.
The viral growth of consumer owned and operated VoIP 802.11x
systems will challenge the establishment.
The industry needs to rethink on a clean sheet of paper:
connectivity, community and applications.
As examples of applications which will change the industry
the following were cited:
"The Voice Inside" - adding voice to anything
- ? Who needs a phone to make a phone call?
The Personal Central Office, Service Creation Environments to manage
Context-sensitive call completion from all perspectives.
Communications Applications come from the edge - e-mail,
web, Internet Telephony and Instant Messaging
and are built on
Community and Connectivity.
What is needed in VON today?
A royalty free, single variable bit rate adaptive codec
from dialup to broadband;
Low cost, low end IP edge devices;
Use and architecture that distributes service execution
Take advantage of the great QoS available today on the Internet's
IPv6 needs to be supported and rolled out.
One of the most important aspects of Jeff's talk is that
he brought a personal and consumer view of the market. The conference
focused on the enterprise opportunities, how the carrier market had disappeared,
but in large part very little was said of the role the consumer plays.
In our view this is where the opportunity will ultimately lie.
On the first day of the event we heard different perspectives
of the market. There were as many variations as presenters. Consider the
There was a whole day devoted to an RTC overview. In Microsoft's
view, expressed in the forthcoming Greenwich, it is about Enterprise
IM. When asked about voice it was stated that this is up to 3rd parties
to build on our platform. Microsoft also is in the position to set which
standards best suit its offering of RTC - SIP and SIMPLE. Issues such
as MEGACO vs. H.323 are not relevant.
Microsoft owns the PC on the desktop and its view of this
market is based on how it can extend the value of the PC, not move into
the VoIP world.
As many expressed, if one company owns the VoIP market
it is Cisco. In its overview presentation the company stressed the breadth
of product from gateways, to gatekeepers, to softswitches, to routers
to phones. Further there are products for the small organization to
the carrier. Cisco repeated many times the fact that they have 99.999%
reliability. Cisco was proud in saying there are 90 variations of its
softswitch. This is driven by the need to comply with many telephony
standards. Thus, compliance with many different standards and interfaces
is essential to winning business.
Cisco's view of the world is based on its strength in
the IP routing business.
They see the softswitch as just another switch. The offering
includes support for cellular, operators and non-traditional operators,
such as cable companies. Its view is that one switch design will work
for all markets. Yet, even from the audience, doubts were raised about
Lucent's commitment to this market. Lucent took the standards compliance
position a step further by building a switch to meet many markets -
it's only in the software.
Lucent's view of the world is based on its view as the
major supplier of CLASS 5 switches for TDM networks.
Microsoft did a good job of framing the current market at
$800m. The last two years have been chaos. An important trend is that
it was originally expected that the market would kick off based on operator
buys, but now this has changed. Now the expectation is that the enterprise
market will sustain VoIP. David Fraley stated in his Industry perspective
that during the go-go years following the Telecommunications Act of 1996,
and when the Internet fever was at its highest pitch, capital spending
by the carriers was at 20% of revenue. In a recent survey they estimate
this at 8% and falling. At this level the industry is using up excess
capacity and not keeping up the networks.
The industry has progressed from the early days of IP phone
calls that were outbound only and distinguished by low quality. Now IP
telephony is very much about consistency of telephony irrespective of
location. Since it does not matter where the IP phone is, it is possible
to place and receive calls anywhere there is an Internet connection. If
there is a niche in this market, it is selling to companies that have
a high percentage of its workers who are mobile. With VoIP it is possible
to provide the same telephone features anywhere. If the person is not
near broadband, the calls can be rerouted to a cell phone.
Given the emphasis on enterprise sales there are many ways
to approach the market. One speaker used an old computer analogy - sell
them mainframes with dumb terminals or provide a distributed system with
intelligent terminal devices. The mainframe analog is the old PSTN using
Centrex while the new system is VoIP with digital screen phones. Well
the analog is not quite so easy. Centrex service is one that has been
offered by the ILECs for some 15 - 20 years. The office PBX (Private Branch
Exchange) - my phone switch in the office - is actually held by the phone
company. The services of handling all my calling needs in the office is
done remotely by the phone company using their equipment in what is called
the Centrex service, thus the mainframe analogy. Yet, Centrex is dated
but for the phone companies it is a cash cow. Many businesses are tired
of paying the high monthly bills for what they see is an increasingly
With VoIP there are two approaches: IP Centrex (or managed
or hosted VoIP), or IP PBX. The former is a direct analogy with the older
Centrex, where the service provider holds all the equipment; the latter
involves the customer buying equipment for the office(s). The market shift,
which is VoIP enabled, is that either the communications provider offers
the VoIP equivalent of Centrex, thus the name IP Centrex, or the customer
buys a new form of PBX for the office.
All of this creates new opportunities for selling. The softswitch
market brings the potential for significantly less cost. Further, the
dynamics for entry into the market are also different. If a customer has
broadband to the office, even ADSL, it is possible to offer a whole range
of new services enabled by VoIP. The disruptive nature of this was illustrated
by the company - GoBeam. Here Verizon is seeking to offer local telephony
services out of region. This is a big deal in that it would pit two ILECs
against each other - SBC and Verizon. Verizon has partnered with a wholesale
provider of managed VoIP, i.e., the IP Centrex, to SME in the Chicago
area. It is the economics of IP telephony and the increasing prevalence
of broadband to offices, including ADSL, that makes it possible to offer
sophisticated calling services and yet not control the underlying transport
infrastructure. It is interesting that this ability to leverage existing
infrastructure and provide innovative lower cost solutions is, in part,
what the Telecommunications Act of 1996 was intended to do. The Verizon
example is one where they would hate this in their own territory but went
so far to do it in a competitor's territory, and through a 3rd party.
If this works economically the telephony market will change in ways that
the CLECs could never accomplish.
The controversies around the pro and cons of IP Centrex
vs IP PBX are sufficiently strong that there was an evening panel which
pitted 3 from each camp. In the end the issue was not about features,
as both could offer essentially the same, but if the SME, which was used
as the example, wanted to buy the equipment or lease the service. Just
the fact that there is this debate, signals that the industry has gone
a long way - hardly mentioned were issues such as quality and latency
which appear to have been largely addressed.
One of the topics during the panel, which came up multiple
times, is the importance of supporting legacy equipment. That is, businesses
have existing PBXs, phones on their desks and in many cases limited skills
in telephony. If a company is to sell new service or a new set of equipment
it must leverage and effectively use much of this existing investment
that the business has made. Thus, in spite of the promise of an all new
telephony environment, even in the enterprise, is tempered by both the
existing environment and the economics of use and returned value.
Not to be lost in all this are the gross margins of the
business. There are the so-called smart, digital or intelligent phones.
These can run upwards of $400 per unit. One would expect that these are
a major impediment to the market but in reality they do not have to be.
During the panel it was stated we can offer the same functionality on
a standard analog phone as the most sophisticated digital phone. How?
With a web based interface which selects the features and functions which
are enabled on the dumb phone. Here is where the PC and phone converge.
However, there is no question that the high costs of the digital phones
are a market hold back. Phones have yet to appear for less than $100 per
phone, which we consider an important market milestone. One of the key
issues is that the interface between the switch and the phone should comply
with standards - such as MGCP and SIP. Cisco, for example, uses their
own interface between the switch and the phone to exclude phone entrants.
Thus, the gross margins of the phones are important to the equipment suppliers
and an impediment to the buyers.
There is a harsh cold reality in this market for VoIP and
the new world of IP telephony - very little money is being spent. At the
same time the revenue curves for long distance, switched non-IP data,
private line and Internet continue to fall. Siemens presented some very
interesting curves which showed how bleak the revenue side is. Thus, attacks
on the capital spending and the lowering of revenues makes for a very
tough market. With a slow economy, companies are very reluctant to do
anything about making a VoIP investment if the existing equipment works.
On the panel much was made about new features for the same price, but
this is likely not to make a sale.
AT&T and Cisco said it well in the industry perspectives
- we are at a 100 year event - the massive shift in the telecommunications
infrastructure. The PSTN has served the world well but we are in midst
of a transition to an IP based communications infrastructure.
Impact of today's economic environment
Throughout VON the black cloud of today's difficult economic
environment and depressed state of telecommunications hung over the conference.
This was seen in the following ways.
The equipment and service providers are totally focused
on the means to either or both raise the revenue line or decrease costs
for the operators. Much of this is directed at building products and
services with VoIP which are similar to what is being offered today.
The IP Centrex is an excellent example of this. The softswitch is the
analog of the CLASS 5 switch in use today for TDM switching.
As the carriers seek to protect their revenue streams
they are also monetizing access. As an example, "walled gardens"
have become much more prevalent.
(This is a totally corrupted term. It would be much more
accurate to call this Customer Prisons. It limits consumer's freedom
of action and directly relates to the current trend to making the Internet
closed based on how it is being accessed. It is a fundamental threat
to the long term value proposition of the Internet.)
Virtually all the presentations are focused on features
and applications. Nothing is said about price. The consumer market is
based on choice, which is a direct result of competition, and price,
which is not being addressed here.
The result of this is that many of the presentations here
at VON are highly biased and not reflective of the impacts of a mass market.
They represent the simple reality of what the providers are trying to
sell today. Yet, this is not what Jeff Pulver was advocating - building
community with creative new products and offerings. Further, Jeff gave
the only talk which represented a consumer view, as described above. Thus,
to extract the potentials of this market on a mass scale one must step
back from the myopia which is totally driven today by seeking to sell
anything the carriers will buy.
Across the Talks
The presentations today made many important points.
Security is a two edge sword. It enhances the sense of
security of the Internet, but firewalls are also are blockers of innovation.
Many firewalls block VPNs and IPsec sessions. This limits many applications
for broadband customers - both inbound and outbound. (Microsoft)
WiFi has the potential of being a truly disruptive technology.
One aspect of this is VoIP on WiFi. There are two paradigms of wireless
voice usage - while moving and while sitting down. The former uses the
cell phone but the latter is ideally positioned to WiFi. Thus, there
is the prospect that WiFi could severely limit the ability of 3G to
succeed, the simple reason being that a free service will kill a monetary
service when the basic services are the same. We certainly saw this
at the 802.11 Planet conference with the community network presentations.
Thus, the ability to use WiFi for voice carriage is very similar to
the wireline concept for VoIP outlined above. The carriage is independent
of the application. There is also the need for a wireless PBX.
Mesh networks change the dynamics of WiFi networks because
there is not the need to backhaul connectivity from every AP.
By 2005/6 every PC will have a microphone and all will
be enabled to support a web cam. (Microsoft)
In the Cisco talk a quote was given from the Cook Report:
"We have built the technology and tools by means
of which abundant and affordable end use controlled broadband networks
are possible. The result of the attempted introduction of these tools
into a global, centrally-controlled, scarcity-driven, debt-ridden,
legacy telecommunications infrastructure has been and will continue
to be a series of bankruptcies."
In other words, the old system based on limited bandwidth
which is carefully controlled and where distance is a pricing element
has disappeared. Those companies unable to make the transition will
continue to fail.
ADSL, including the DSLAMs, make VoIP ugly. This is the
problem in accomplishing voice over broadband which uses DSL. The A
in ADSL is also a serious offender. Further, firewalls typically block
VoIP sessions and IPSec sessions. NATs also break VoIP connections.
In spite of the recognition that the magic "killer
app" is what will drive VoIP usage, it was stated over and over
that no one has a clue what that will be. In fact, the question was
raised - is there a killer app?
According to the ITU, in May 2002, the number of wireless
lines (devices) exceeded for the first time the number of wired phones
- the parity number is 1.1billion.
Walled gardens, which are increasingly prevalent in cell
phones, are preventing innovation, in part, because they remove competition
for service providers and make the business models more difficult for
the innovators to realize.
Henry Sinnreich, of WorldCom gave a blunt assessment of
Since IP routers and SIP edge devices can support superior
communications, why are softswitches and IP PBXs required? Are these
not an alternate to SIP and thus unnecessary? Is not today's softswitch
just an IP replacement for the CLASS 5 switch that the carriers are
Softswitch is a marketing term and no one knows what it
means. It is a marketers dream - creating a market out of nothing. The
softswitch is the old model of telephony being extended to satisfy the
phone companies and is dumb.
The Internet is based on a model of smart devices and
dumb network. What the softswitch does is to invert this relationship
and makes the switch at the center of the network and the edge devices
dumb, i.e., the phones. Yes, the phones may be smart but this can only
be realized if the switch knows about all the features, functions and
displays in the phone. The power of the Internet applied to telephony,
as reflected in SIP, is that any device can be a phone as long as it
meets the signaling requirements of the interface. This includes a PDA,
a PC, a SIP phone and virtually any other device. Yet, the softswitch
makes this virtually impossible.
The softswitch has created a much more complex environment
to provide VoIP. The reason is that there has been an integrator business
created to make phones work with the softswitches. On a practical level
it is nearly impossible to keep track, at the switch level, of all the
features on the phone and the current status of the phone revisions.
This is totally unnecessary and inconsistent with the power of the Internet.
There are some contradictions in today's push for softswitches.
For example, what was a $20m CLASS 5 switch was on eBay recently and
selling for $400,000. There is no way that even a softswitch can compete
with this pricing.
The move to softswitches is actually backward from the
PSTN in that they lack new features, say compared to SIP, there is no
data integration including with voice.
Strange things happen.
Strangely enough, avoiding the true shift to IP by emulating
the circuit switch and its central control over IP is popular with
many telephone network operators and they seem willing to spend significant
investments in this area.
In a similar manner, IT managers still seem to be willing
to buy proprietary IP voice systems, without worrying about the cost
and limitations further down the road.
We asked Henry why are so many speaking of SIP phones,
yet, there are no low cost SIP phones like PSTN phones?
The issue is not - will SIP phones work together. Tthe
signaling is what is defined by SIP, and a phone that is compliant with
this can connect to another SIP phone. However, the callers may not
talk to each other due to incompatible codecs. The codecs are not standardized.
Thus, this is the reason that Jeff Pulver appealed in his presentation
for a royalty-free codec that worked from dial up rates to broadband.
Voice over Broadband
This session got to the heart of many of the issues with
the feasibility of VoIP using broadband to the home. Key points include:
Much of today's backbone can handle the requirements of
voice traffic with MPLS. What is required are trunk-side label-switched
edge routers. That is, at the access edge of the infrastructure there
is a router that adds labels.
A complication of providing VoIP on broadband is the need
to comply with CALEA requirements. There is a need to be able to make
copies of the packets and vector them to legal intercept software.
In Japan, Yahoo BB is doing VoDSL using Annex B.
The rollout of VoB has been much slower that predicted.
The cable statistics, which are nearly all switched voice
based on AT&Ts cable infrastructure, are:
1.7 m cable telephony lines in North America
66% growth in 2001
2 year offers are getting a 20 - 25% take rate.
Silicon on a chip is happening now. This will integrate
both a DSL modem and residential gateway in one box. The era of the
isolated modem is rapidly fading. The home CPE will integrate the functions
that are present in multiple boxes in the home.
In providing VoB phone service, the carriers have abstracted
the IP aspects of the service. The customers do not know or care it
is IP based. What the carriers have done is to market this as a lower
cost phone service. In fact, because the cost of the offering is lower
than the price, the carriers are able to maintain gross margins on telephony.
PON is showing considerable strength in Greenfield implementations.
This is especially true in municipalities and power companies. In all
cases this is also a VoB offering that is IP based.
The Korean company HS Teliann stood out. They had a range
of VoIP products in the booth. What caught my attention was a H.323 phone
for $120. This phone can be attached directly via the Internet to a gateway
provider. It breaks the operator lock on the VoIP market, as we have discussed.
When asked, HS Teliann stated that they will have a SIP phone out next
year. The price will be basically the same, in that the only change required
to go to SIP is the software in the phone.
FCC Town Meeting
Dr. Robert Pepper of the FCC was available in the evening
to discuss the current regulatory environment and answer questions. The
topic of VoIP as an independent service was raised. Here are the key points.
The FCC recently issued a declaratory ruling that the
Internet services, i.e. Internet over ADSL and Internet over Cable Modems,
is an information service.
There are basically three categories of regulation at
the FCC based on the law. These are
Title 1 - Information services
The rules for this fall under Computer II and Computer
which means that the services are basically unregulated.
Title 2 - Telephone service
Based on the type of service, this is still regulated
in areas such as universal service. The push by the ILEC for regulatory
relief is all about making this much less regulatory. However, the
devil is in the details and there is fierce resistance to many of
these proposals. Some see them as being anti-competitive and a significant
move back from the intent of the Telecommunications Act of 1996.
Title 6 - Cable
Largely unregulated. This is the framework that the
ILECs would like to emulate - the so-called regulatory reform.
The key issue is:
If VoIP services are offered over the Internet, does
the FCC have the power to stop blockage by the carriers, both cable
The carriers have shown a strong tendency, already,
to block access or usage if it is not in their interest:
Walled gardens on the phone system;
Limitations on the use of servers on the consumer's side;
Prohibition by cable companies of the sharing of access to the Internet
by extending the bandwidth over a community WiFi wireless network.
Open VoIP over broadband to the home brings the prospect
of true local loop competition. Broadband becomes no more than a carrier
and the consumer has choice based on selection of service providers
over the Internet.
Not clear. Given that Internet access is under an Information
service for both cable and ADSL, as per the recent FCC ruling, this
would imply no regulation by the FCC. However, there is a requirement
to implement end-to-end connectivity, under the Computer II rules,
as an information service, but this only applies to businesses.
WAVE Report Bottom Line.
Both the ILECs and the cable MSOs will fight this like
a hawk. There are enough loop holes in the law and regulation that
they could fight this in the courts for years, in much the same way
that the ILECs have been very successful in fighting the Telecommunications
Act of 1996.
The cable industry sees voice as the killer app in
the triple play that will allow them to complete with the ILECs.
If revenue was drained off by "off cable system" voice
services where they do not share in the revenue stream, they will
have a regulatory fit.
The ILECs, and in particular, SBC, have been crying
for "regulatory relief" - which is regulation speak for
"let me hold on to my customers any way I want." Under
such a proposal it is likely that the ILECs will interpret their
ability to limit off-system access to services as inconsistent with
their function as a carrier. Expect blockage in the same way they
have already begin to block other services and sites on the Internet.
Broadband VoIP Exists Today
Vonage is offering VoIP to the home today. In fact, 2Wire
is using them as a carrier in its trails. (see below)
Vonage offers service that includes unlimited local and
long distance calling for $39.99 and a 500 minute plan for $19.99. Rates
for international calling are also claimed to be low. The ordinary home
phone can used by plugging it into a small box called an MTA which in
turn plugs into a router and then the cable or ADSL modem.
Its President and CEO Brian Hinman spoke on Voice Over IP
Opportunities for DSL. Here are key points from the talk:
2Wire is shipping 1,000 unit s a day. Its largest customers
are SBC, Verizon, BellSouth and Earthlink. The installed base is over
The company has secured $144m in funding and remains private.
Brian's comparison of the PSTN with IP was interesting.
He offered the following for advantages of each:
Solving 911 is easy
Billing is already solved
Fewer QoS issues
Cost savings of packet voice
Potential to avoid termination fees
2Wire is working to implement VoHPNA. Silicon became available
in 2001 and there are field trials of VoHPNA with VoIP in 2002. Phones
are expected to be available in 2002.
2Wire is engaged in two trials. A small business trial
used VoHPNA devices and gateways. Sylantro provides the MGCP service
and the long haul transport is over PSTN. The consumer trial uses Vonage
for the SIP service, and H.323 gateways are provided by Cisco.
2Wire is working with Vo802.11 cordless phones. The advantage
of these is that they eliminate the need for cordless phone base stations.
To date, limited phones have become available from SpectraLink and Symbol
Technologie,s but these are expensive. 2Wire sees that the standardization
around 802.11e will support market adoption. What is needed is better
phone power management and a total phone silicon solution.
2Wire is seeking to use its HomePortal as a platform for
VoIP. 2Wire has proposed, assumed to a standards body, using 802.11b
with a tunnel for VoIP. What is most important is that 2Wire is proposing
that its HomePortal serve as a termination point for cellular connectivity
in the home. This is a significant proposal and a complex one.
In the near term it is doing a proof of concept with Bluetooth.
A Bluetooth to Ethernet access device has been developed and the 2Wire
router handles NAT ALG and packet prioritization. Currently, in support
of this effort, a major handset vendor is providing a high-power Bluetooth
cell phone for the tests.
2Wire would much rather use 802.11b as the cell phone
access solution. One of the key reasons is that it minimizes any additional
costs to the HomePortal. The impact on the cell phone was not described.
From this 2Wire concluded that Vo802.11 may become the
ultimate handset solution - for the use of the cell phone in the home.
One advantage of IP voice is that it enables a decoupling
The terminal voice instrument;
From the transport and;
From the service provider.
To visualize how profound this can be consider this prospect:
Consumer walks into WalMart and buys a SIP phone for under
At home the consumer plugs the phone into either the cable
modem or ADSL modem.
The consumer goes on the Internet and selects a phone
service, out of 100's, which best suits their needs. It is just like
buying an airline ticket - pick from many options for service and craft
the plan best suited for the individual.
Provide an identifier for the phone and the service provider
does autodiscovery to locate the phone and set up the services.
The service starts.
At VON we saw many of the components:
A $120 H.323 phone that requires only a software change
to be SIP capable;
Silicon from TI that could go into the phone, and;
Hardware/software offerings for service providers to enable
an Internet-only phone service provider.
Note the value of this.
This is has the same level of direct impact on the monopoly
broadband carriers, today the ILECs with ADSL and Cable with DOCSIS
Cable Modems, that the Carterfone decision did on AT&T's monopoly
position in the supply of phone equipment when it had its original monopoly
of the phone system.
It introduces huge competition for phones - using a standard
between the phone and the modem, which does not exist today - where
the phone is like cell phones are today.
It introduces significant competition in the service provider
sector, including the potential for even providers overseas to offer
services in the US and other countries. The service providers are totally
decoupled from transport and even location because the only requirement
is that the service providers have a presence on the Internet and can
Broadband to the home is just transport with this service
The downside of this is that the cable and telephone companies
will hate this. Consumers will love it. However, based on our sampling
at VON we have significant doubts, at least in the near term, that the
mass market potential for VoIP will be realized. The potential for market
retardation are too large to be readily overcome.
Mass Market VOIP
It is very important to understand that the issues we describe
are for mass market VoIP - millions of line equivalents. A few 100,000
lines are largely inconsequential compared to the deployment of 130m wirelines
to consumers in the US.
Market Potential for VoIP
Many naively assume that VoIP is a killer app of the Internet
and especially for the home. This is another zero-sum fool's game. Just
because there are so many phone lines the assumption is made that providing
a new one immediately creates a market opportunity. Consumers will seldom
spend for new services but spend for replacement services. In the presentation
at the Industry Perspectives today a Verizon executive stated: "
of the reasons that VoIP has not taken off is the overall decline in landline
phone usage." For the first time in the history of fixed telephony
there has been a decline in total the number of lines over the last 2
years. There was a short period during the depression when a similar decline
happened but the current decline in usage has been more sustained and
likely to continue. Why is this happening? One reason is that the impact
of mobile phones is being felt - with increasing frequency individuals
are making the cell phone the only phone. Second, the need for second
lines is declining and one of the reasons is the Internet - no longer
is an independent dial up line necessary. Consumers are seeking to lower
their overall communications cost, not take on new costs as they modify
their phone ownership and service spending.
One of the reasons that the telcos fear the cable companies
is their entry into telephony. Yet, as we heard from Cable 2002, the cable
companies have been very careful in this market. For example, a key reason
cited for the value of cable telephony is lowered churn. But cable companies
are loath to describe their telephone service as "primary,"
which would imply a host of new regulations they do not want. Basically
the cable companies are cherry picking the telco business at the edge.
To be a supplier of non-primary phone service dictates that
price is a critical component. This further complicates the prospect of
seeking to make money with VoIP because landline parity pricing just will
not work. Further, with the collapse of long distance rates, pricing bundles
which offer low long distance calling are ho hum.
All of this points to the obvious conclusion - to offer
VoIP as an alternative landline service to the home is far from a significant
market opportunity but one that will be a complex, costly and with uncertain
Verizon stated in its talk at the regulatory session that
it seeks to make the Internet open end to end, as a policy of the company.
This certainly would imply it would not block competitors but the situation
was less clear when asked. That is, one of the issues the company faces
is that without a National Broadband Policy it is unclear what the rules
are. It was asked:
Are we not seeing a decrease in the end to end transparency
of the Internet due to walled gardens, restrictions on server placement
in homes, and restrictions on sharing of broadband over community networks?
The only response received was - "it must not be
us on the ADSL side." But it also has been.
President Bush has passed the ball to Michael Powell, FCC
Chairman, to shape the National Broadband Policy. As we have written in
the past, this has distinct limitations in that the FCC cannot propose
legislation in the same way that the offices of the administration can.
However, there are a number of proceedings before the commission which
Robert Pepper used to sum up the development of the policy.
The study of the FCC Spectrum Policy Task Force due to
be released shortly;
The Cable Modem NOI;
The National Performance Measures NPRM;
The Incumbent LEC Broadband Notice;
The Dominant/Non-Dominant NOI;
The Triennial UNE Review Notice and;
The Wireline Broadband NPRM.
As the FCC has stated: "These proceedings are intended
to build the foundation for a comprehensive and consistent national broadband
It should be noted that these efforts are "being coordinated
out of the office of the Chairman," which is consistent with the
intent of the President.
There many issues surrounding VoIP that are waiting to surface
based, in part, on the level of penetration. Many of these issues are
required by Title 2 or the rules issued under Title 2. Further, the level
of compliance changes if the phone service becomes primary, which the
cable industry has sought to avoid. Consider the following:
The ability to support calling without power.
Note that even the Vonage phone does not support this.
Note that this is really hard with VoIP due to the need to provide
location information. One might call this emergency presence. Given
the focus of VoIP on enhanced services one would like to think that
this from of presence would be a good revenue generator - wrong -
it will be mandated by the law at no cost.
Participation in the fund which supports low cost service.
In this area the states are much more active, especially those with
This is the requirement to support for interception
of signaling and phone calls for law enforcement. The issues are complex
and being worked via the TIA and others within the government. A presentation
was given on this and many issue remain open but one can be assured
that in the end VoIP will have to comply.
VON was excellent.