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Entries tagged as ‘VoIP’

Rural Telcos Block Cable VoIP

25 April 2006 · Leave a Comment

This is a very interesting situation being described in this article in USA Today. It seems that rural incumbent telephone companies are seeking relief from state public utility commissions to prevent local cable companies from offering voice-over-Internet services as a component of their cable service package in their overlapping service areas.

The rural telcos are withholding the leasing of local telephone exchanges and interconnection to prevent cable VoIP providers from being able to offer a service which would be of use for local calling within the local community. I can speak from real experience of 15 years living in a very small rural town that the difference between a local and a long-distance call can make a big difference in your ability to remain connected to your family and neighbors. In such an environment even the likes of Vonage, Skype or GizmoProject would be challenged to succeed with voice services (except second-line offerings) resulting from the inability to have local numbers provisioned. This is also a class of carrier which is largely excused from requirements for local number portability, so the monopoly on local telephone numbers has a substantial stifling affect on these rural markets.

The parallels between this issue and the issue of providing franchises to incumbent telcos attempting to offer cable television services should not be lost on anyone. In both instances it is incumbents and amicable local and state officials that are actually acting as the roadblock to competition in both the voice and television service market the very customer and constituent bases they are supposed to serve.

Its also worth noting how this issue runs head-long into the issue of the Universal Service Fund. In my past reviews of the various drafts of the new telecom bill, Ive expressed my disappointment that there has been no re-examination of the USF. These same local telcos which are fighting the deployment of cable VoIP are the recipients of USF subsidies.

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Categories: Politics · Technology
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Google + Equant = VoIP? Not so Fast.

17 November 2005 · Leave a Comment

I came across this piece talking about a possible partnership of Google with Equant. Equant, so you all know, is the global business services arm of France Telecom.

“We’re in talks with Google about some things. I can’t talk about [what things in particular], but it’s kind of their next evolution as a company, as they begin to grow, there are some things that could be of interest,” said [Equant president for sales and marketing in the Americas Mack ] Treece on the second day of a two-day stop in Santiago, Chile.

I found this comment very interesting. The BNAmericas article where this quote appears goes on to indicate that Equant are an ideal choice for partner should Google launch a broader set of VoIP services, particularly for business. I would expect otherwise.

Equant is a partner to consider if Google somehow wanted to go forward with a business VoIP offering more global in scope. Equant have points of presence or operations in something like 140 countries. (I cant give an exact number because their marketing material is all over the place, and I dont even think an Equant employee would ever be able to give you a definitive answer. I’ll leave discussion about how questionable any of their coverage claims really are for another day). Equant are a company you partner with if you want to go global with a telecommunications service. If you want to focus on any specific national markets you look elsewhere for better in-country capabilities.

Its also interesting that Equant never top any list of a low-cost, low-maintenance partners. I would expect to Google to focus more on partnering with one or more wholesale companies offering VoIP for re-sale. Think Level(3) in the US, COLT in Europe or perhaps Asia Netcom in Asia. All of these carriers would be much cheaper and probably a better fit for Google if Google wished to maintain a higher level of product control. Companies with big wholesale businesses have a better capability to provide the capacity and keep their hands off of the end product and marketing. Ive never seen Equant particularly skilled or willing to take a wholesale approach, generally eager to be active in the definition of the product and very keen for partner marketing. France Telecom, to their credit, have always kept their wholesale business away from Equant.

I dont see the deal being involved with VoIP. If it does theres some angle Im not seeing or anticipating to make Equant a partner Google would tend to favor. So I think it’s something other than VoIP, though I can’t see what yet. If Google are looking to expand on their VoIP offerings they would be well-advised to look for partners that would be low cost and take a hands-off approach to the final product.

Categories: CI · Technology
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AT&T CallVantage Heartbeat Sounds Like a Pain

12 October 2005 · 1 Comment

Theres been a bit written in a few places on the web about the new AT&T CallVantage feature dubbed Heartbeat. The most noteworthy is probably Andy Abramsons assessment here. The purpose of this feature is to ensure accurate delivery of E-911 information to emergency call centers. Andy takes an overall positive view, but I have to say that I come down on the other side of the fence.

The gist of Heartbeat is that each time your VoIP adapter is powered down, you are required to confirm with AT&T whether or not the access device has moved and, if it has, the new location of the box. This sounds like a tremendous, tremendous pain to me. I hope for the sake of any AT&T CallVantage customers who are road warriors that this is an optional feature of the service. Im not able to find anything about the feature in the att.com domain using Google, and a quick scan of the AT&T news releases doesnt tell me anything.

I really do hope this feature is optional, because I can think of about a million scenarios in which a user isnt going to want to take the time to re-register their location each time they take their adapter on the road. Its not too hard to imagine a large number of scenarios in which this feature (this word is being generous) could cause problems in an actual emergency.

The Barton-Dingell telecom bill includes requirements for provisions of location information for VoIP callers making 911 calls. In my reading of the bill this leads me to take away a coming development of GPS functionality into VoIP adapters. This will at least save the trouble of re-registering your exact location every time you plug in your VoIP adapter. This is provided, of course, that emergency call centers have the ability to capture GPS data, and I suspect that functionality is not there yet. Yeah, I need to do some more research.

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Interesting Take-away from VON

3 October 2005 · Leave a Comment

Richard Stastny has some interesting observations and comments on Voice over IP and its transformational impact on the telecommunications universe posted on his blog These are Richard’s take-aways from the recent VON conference.

While I agreed with most of what Richard had to say, I didn’t necessarily follow or agree with this one comment:

There was only one displeasing issue pointed out for me by Brough Turner in his presentation: the telcos are squeezed also from the lower layer (layer 0 is he named it). The access is also not a safe heaven in future, because there is (will be) competition here too by independent FTTH providers. They will lease, rent or sell the fiber to the customer. And if the customer has finally a fiber to the home, he is set. The currently existing bandwidth gap is solved. And the customer now may choose his ISP at the co-location room.

I would really like to believe this is the model that will prevail. I still have significant concern, however, of the difficulty of a market for true facility-based competition for last mile services. This is not that I think the market cannot be there. Quite the opposite. My supposition is still that local authorities are going to be reluctant to offer up rights of way to competitive providers who are not incumbent telcos, cable companies or maybe (if they’re generous) utility companies. My read of the new telecom bill reflects this worry.

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FCC Not Going to Cut off VoIP

28 September 2005 · Leave a Comment

The FCC has backed away from a requirement that Voice over IP providers will be required to switch off customers who have not acknowledged warnings from their providers as to the limitations of VoIP and 911/E-911. The Associated Press article is here. Evidently VoIP providers whose customer response rate is below 90 percent have until the end of October to get their acknowledgment numbers up.

This is a very surprising move, but Im glad to see the FCC take this step. The original requirements laid down looked to be very onerous. The cynic in me compared the requirement placed on VoIP providers to the lenience the wireless carriers have enjoyed with their own 911 requirements and the incumbents enjoyed for a long time with local number portability. That cynical guy thought that perhaps if one had the lobbying muscle of the RBOCs and wireless carriers your deadlines could be taken as mere suggestions, being moved again, again and again. Perhaps the performance of voice over Internet services when traditional land line and wireless phones failed in the wake of the London Underground and bus bombing and Hurricane Katrina made the FCC realize the mistake in mandating disconnection of customers. From the AP article:

“To have a system where you risk cutting customers off in such a short time frame? It’s unintended consequences,” Sen. John Sununu of New Hampshire said in a speech last week at VON, a conference that revolves around Internet phone technology, which is also known as VoIP or Voice-over-Internet-Protocol.
“Cutting someone off from their voice service carries enormous risks,” Sununu said.

Amen, Senator. Perhaps I should check my cynicism a bit. At least for today. Maybe.

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SunRocket Scores $25 Million in Funding

23 September 2005 · Leave a Comment

Tysons Corner, Virginia-based voice over Internet company SunRocket has secured $25 million in its second round of funding. The article from the Washington Post is here. There would have been a time when I would have been amazed by this, but perhaps the eBay acquisition of Skype speaks to some economics of VoIP providers that I am just not understanding.

One good thing about SunRocket is the extremely simple price offering ($199 per year or $24.99 per month. Their marketing material claim that those prices are all inclusive. Getting away from the annoying add-on line items that plague most other phone bills is one potentially appealing message for consumers.

The Post article talks about SunRocket “trying to catch up to Vonage and Skype. Im not really sure thats a necessity based on the magic economics of VoIP service providers these days.

On a somewhat related note, weve made the decision to cut the cord with our Vonage service. The value-add of being able to make unlimited long distance calls just couldnt hold up. Weve still got a Verizon line (required for DirecTV, damn it, which is further a necessity for NFL Sunday Ticket) for local calls, and Ive begun using GizmoProject for my international calls. Combine all of this with mobile phones and theres less and less need for that Vonage line.

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EBay – Skype Silver Lining for Net Neutrality

13 September 2005 · Leave a Comment

Some may say that I am becoming like an self-obsessed character from a David Sedaris story or one of those Ask a advice columns from The Onion. A few more thoughts on eBays acquisition of Skype have come to my mind.

First a bit more on why its a bad idea for eBay. Ive heard on NPR and read in a few places that eBay intend to make voice calling from bidders to sellers a feature of their service. This is actually a very good idea. It could be a very good idea that brings in billions of dollars in additional revenue for eBay in the form of higher sales volumes and higher selling prices. That remains to be seen. But what eBay did NOT need to do was spend at least $2.6 billion to make that happen. With all of the low-cost PC voice over Internet clients they could have purchased or licensed this was some serious low hanging fruit they could have implemented in the cheap. Considering eBays installed user base they didnt need Skypes user base to make this a reality. What we have here is a good idea motivating a bad decision.

Theres a potential silver lining in the deal for those of us concerned about network neutrality. This piece in the Washington Post even considers what steps incumbent telecommunications companies might take to thwart PC-to-PC voice over Internet calling. The article doesnt bring up anything that hasnt already been considered, such as applying universal service fees to VoIP calling or applying E911 or surveillance requirements to these connections. These lobby efforts at the FCC are to be expected. Ive also written a few entries about the possibility of incumbent telcos and cable companies could employ technical means to limit the quality of competitive VoIP calling or block those calls altogether. This is something Madison River Communications already tried to do, and they got their hand slapped by the FCC. Some have speculated that in a post-Brand X world the FCC would be less willing to go to bat in the name of network neutrality.

I think the eBay acquisition of Skype actually creates a ray of hope for proponents of network neutrality. With eBays large customer base, any attempt by a cable or telecommunications company to throttle or block VoIP performance would be noticed by a wide audience. While eBay may not be able to match the lobbying clout the Bell companies carry in Washington and the state capitals, what it can do is mobilize a genuine grass roots campaign should it come to it, and the Bell companies cant hope to match eBays folksy, grass-roots appeal. An educational benefit is that by aligning a VoIP provider conceptually with a web service provider a broader audience can begin to conceive of voice as an application rather than a network. No longer just the opinion of libertarian telecom nerds like myself, voice could come to be regarded as independent of the underlying network infrastructure just like web sites, e-mail or instant messenger.

Categories: Politics · Technology
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More on eBay and Skype

8 September 2005 · Leave a Comment

Over the course of the day more details about the rumored Skype acquisition has been reported. According to MarketWatch there have been mentions of a purchase price of up to $5 billion with more credible rumors place the price somewhere between $2 – $3 billion. Even $2 billion is striking me as being pretty expensive, but maybe there’s a business model there that I’m just not seeing.

The same MarketWatch piece references over 50 million Skype customers (a press release from Skype issued a few days ago says that they have 553 million customers). Clearly this number does not reflect the number of downloads, because according to this blog entry which references an AP article Skype crossed the 100 million download threshold in April 2005. Seeing significant details on actual usage by Skype customers is hard to come by.

Skype are attributed as having an expectation of $50 to $60 million in revenues this year. Since Skype is a private company there are some key details, such as profits, missing from these details. Most of this is going to be from fees for add-on services such as SkypeOut calling to standard telephones and the SkypeIn feature that allows users to receive Skype calls using regular phones.

There’s some more data in this piece from Forbes, which states that Skype has over 2 million SkypeOut customers. At a minimum EUR 10 (approx. $12.40) per SkypeOut account (at least at the start) there is a minimum of $24.8 million in revenue since the launch of SkypeOut in July 2004. Considering the big brand competitors such as AOL, Yahoo and Google coming on board with VoIP calling, it remains to be seen how Skype are going to increase the penetration of SkypeOut among their installed user base or otherwise get customers to commit to significantly higher usage of Skype to drive average revenue per user up to deliver on their revenue targets. There may be other opportunities for revenue with Skype Voice Services for call centers and content providers, but it’s hard to see where Skype sees huge revenues here, either. Some of the breakdown for Skype and partner TellMe’s take on the total revenue for Skype access to content looks pretty daunting, and content providers might shy away.

The Forbes article title best reflects why I am most skeptical about the high valuation of Skype: Skype Proves Anyone Can Sell Phone Service. This is very true, and with AOL, Google, Yahoo and other big brands entering this space, things are going to get extremely crowded.

One thing I don’t expect users will tolerate in this space as well as they’ve tolerated in traditional instant messaging is the lack of cross-platform operability. I don’t expect users to tolerate the notion that they can only speak to their friends and family on the same platform. If services such these are ever expected to replace traditional phone lines (a concept which I know is highly debatable) interoperability is a must. By comparison, imagine that a Cingular customer would ONLY be able to call other Cingular customers, and that user would be out of luck to call a Verizon Wireless or T-Mobile customer. Even more strangely, imaging if you could only call other people using Nokia phones. Right now, if youre a Skype user, you can only use the software to talk to other Skype users unless you pay for SkypeOut minutes to talk to someone via a standard telephone number. So, if youre using SkypeOut to dial out, and your buddy is using whatever AOLs equivalent of SkypeIn will be (where they have a number people can call on a regular phone to talk to them via their voice over Internet software), youll BOTH be paying for the call regardless of where in the world you both are locatedand voice over Internet is supposed to be the end of per-minute charges. OR one of you switches voice clients, which serves to alienate you from your other friends with an installed base of said client. OR you run multiple software clients, which is just lame, lame, lame.

This entry is all over the place today, I will admit. My own being all over the place reflects everything that’s been going on with Skype this past week or so (or maybe its just the cold meds). Suffice it to say that I think the rumors, if true, reflect a far over-valuation of Skype. I should hope eBay come to their senses.

Disclaimer: I am one of Skypes 53 million customers but not a very thrilled or even a paying one. Ive only used it a few times with friends in the UK, and just wasnt really all that impressed with anything above and beyond being able to talk for free. Ive come to enjoy the Gizmo Project voice over Internet software from SIPphone much more for some reason, and there seems to be a greater commitment to interoperability with the folks at SIPphone. Thats just what voice over Internet needs if its going to succeed.

Categories: CI · Technology
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eBay Buying Skype?

8 September 2005 · Leave a Comment

I’m up very early this morning as my cold from the past week continues to cause me frustration. I decided to take an opportunity to check e-mail and whatnot before I try to get an hour or two more sleep before going into the office, when what should pop into my e-mail in-box but an alert from the Wall Street Journal that eBay are in talks to acquire Instant Message/VoIP software company Skype. I thought this was worthy of a quick blog entry.

The article points out that the talks are in a very sensitive phase and could potentially fall apart, so nothing is set in stone. Either way, the fact that eBay is involved in these talks at all is a very interesting development. This seems like a strategy right out of right field and only tangentially related to eBays core competency– and only then if you use a lot of imagination and perhaps drink a lot of hard liquor. The Journal points out that eBays core revenue is reaching a likely plateau, so maybe this is a good strategy for diversification.

One thing I do hope eBay doesnt do, for their own stake, is overpay for Skype. Theres been a lot of hype about the market capitalization of Skype and likely suitors, one such rumour indicating that News Corp. was considering offering $2 billion for Skype. Granted Skype has a large base of downloads and has made impressive inroads into an already very crowded market for instant message software, but some studies have indicated that usage for the service on a per user basis has gone down significantly as the user population has grown. Perhaps Skype has yet to reach a tipping point in terms of penetration, but Im of the opinion that its potential as a platform for ad-based revenue (which is where I would see eBay going should it acquire Skype) is somewhat limited unless eBay could find a way to make Skype sticky for those people who download it.

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VoIP Blocking and the End of Net Neutrality

29 August 2005 · Leave a Comment

There’s a terrific discussion going on over at TechDirt about various means by which ISPs might block Voice over IP traffic for competing services. The post goes on to indicate that the current incarnation of the FCC is unlikely to take any action to respond to the complains of independent VoIP providers. I have to say that based on the current decision to position DSL-based Internet services as an information service I would be inclined to agree that the FCC is less likely to take action to ensure network neutrality.

One of the comments in the Techdirt discuss makes a case which I made some time ago, that if ISPs begin to treat packets differently based on the information that is contained within them, they compromise their arguments of being a “common carrier.” By taking this action, one could argue, ISPs open themselves up to claims of liability for thinks like the illegal sharing of copyrighted content, child pornography, on-line gambling and all of those other incarnations of evil that take place on the Internet.

This is a slippery slope both in terms of legal liability and in terms of customer patience. Should the big local-access-facilities-based ISPs (basically telcos and cablecos) choose to go down a path of net partiality, they run the very real risk of pissing off both law enforcement AND customers. This would go a long way to expanding the gap between the United States and countries with a better-connected populace. The advantages the Internet offers to consumers and small businesses would dry up along with a good chunk of whatever competitive advantage the U.S. might hope to retain. I really hope that the FCC can wake up to the bigger picture.

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