Voice over Internet Protocol (VoIP)

Consider the telephone. There it sits, awaiting the next opportunity to do what is really a remarkable thing: allow two or more people to exchange real-time communications regardless of where they happen to be.

Of course, a telephone is really nothing more than a user-interface to the Public Switched Telephone Network (PSTN). The PSTN can be considered the world’s largest computer. When you pick up your telephone handset and hear the “dial tone”, that’s a computer humming to you.

The dial-tone is a relatively recent introduction. For many years there were human operators who would physically connect a dialing telephone onto a trunk line, and arrange for the other end to terminate where desired.

Ironically, over 125 years later, the PSTN still connects phone call users in basically the same way. Its now a computer making the connections (called a “virtual circuit”), but these connections are dedicated to the particular call, and consume a full circuit for the full duration.

All this is in the process of changing. Voice over Internet Protocol (VoIP; pronounced “v-oi-ep”), is turning the traditional telephone industry, and system, upside down. It’s a classic example of a disruptive technology — completely changes the rules.

“VoIP”, as the name suggests, is the use of a computer network to deliver voice services. VoIP is really a wrapper phrase covering a wide range of different protocols and solutions (H323, SIP, etc). In fact, there have been VoIP solutions, such as ICQ, available for longer than the VoIP name has been around.

Many early attempts at VoIP solutions had mixed results because of poor quality, and because some were limited in who you could connect to. Some bad VoIP connections can make the conversation sound like it’s taking place “through a waterfall”.

But several factors are coming together to allow VoIP to completely replace the existing PSTN. The first is much faster Internet connections being in place in an ever greater percentage of homes and business. VoIP simply doesn’t work well with slow connections.

The next contributing factor is the maturing of the VoIP technology and solutions, coupled with consumer pick-up rates. Mass production is allowing VoIP to become directly price competitive with legacy PSTN solutions.

The last is the simple superiority of the Internet’s packet-switched model over that of the traditional circuit-switched PSTN. Packet-switched networks are simply more efficient at moving data (of any kind) around, and are more resilient to faults.

I find it quite ironic that the Telecoms Industry did everything they could to prevent VoIP from developing commercially. Early last year several US-based companies lobbying the US Federal Communications Commission (FCC) arguing the VoIP should be made illegal, or at least the providers should be forced to pay settlement fees to the Telcos.

Fortunately, the FCC decided to let the industry develop. People with high-speed Internet connections now have many options for their long-distance VoIP needs, and CPE costs continue to drop.

The telcos, always willing to enter and compete in a market when they’re not able to kill it, have now begun offering VoIP solutions themselves. If you currently subscribe to xDSL or Cable-based Internet, call your supplier and ask their plans — you’ll want to know.

But even more telling in my mind is the fact that most of the large carriers (AT and T, etc.) have announced that they’re re-engineering their core infrastructure to be fully, and solely, VoIP based.

What does this mean to you, the busy business person? Depends on how much you depend on real-time voice-based communications.

To some, the only difference will be then when they pick up the phone and hear the computer humming, it will be a much smarter computer. The phone service provider will be able to offer a much richer suite of offerings through a simple handset.

For others, taking full advantage of the latest VoIP offerings could completely revolutionize how their business operates. Examples include phone calls following the person the call is intended for. Being able to have multiple offices operate as one. Much more powerful (and less frustrating) voice-mail and navigation trees.

VoIP solutions are often a good fit for businesses of just about any size, from small SOHO to large multi-nationals. And, unlike PSTN solutions, VoIP options come from a huge range of providers, both traditional and relatively new and unknown.

As examples, Nortel would be more than happy to sell a company a large VoIP based Private Branch Exchange (PBX) which looks and acts pretty much like a traditional PBX. Or, an individual can download free VoIP software (see www.skype.com) to their computer, and be a VoIP user in minutes.

But, a closing, cautionary thought: while VoIP is a technology which will be all around us shortly, it is based on computer networks. If one moves from a PSTN to a VoIP phone system, one should be pretty confident that their network is as reliable as their phone is.

Because, at the end of the day, when you pick up your phone, you expect to hear that computer humming. Even if the power is off. Even if the roof just blew off your house. (I have to worry about that where I live…)

A VoIP transition probably makes sense for most business telephony consumers. But the additional dependencies introduced by how VoIP is, by definition, delivered, must be considered.

Published in the Victoria Business Examiner.