The disruption potential of VoIP lies not so much in its ability to push down the cost of telephone service than in its ability to get consumers to ignore the telephone business altogether. The nature of the Internet makes VoIP advantageous even after the cost of plain old telephone service goes to zero. For while the network determines all the essential features of traditional telephone service, from audio quality (low) to addressing (telephone numbers), the Internet asserts few constraints on VoIP services or devices. Thinking of communication solutions as an extension of the web and implementation as hosting can help break the grip of the telephone myopia reflected in most VoIP business plans.
Framing the value of VoIP as replacement for traditional telephone service makes interconnection with the telephone network seem essential, but VoIP enables communication solutions that go beyond the
“telephone call.” Think of it as viewing the telephone itself as a more efficient telegraph. The infocom industry needs to unleash new demand associated with new services. A transformation from world wide web to worldwide communication requires interconnection among VoIP providers, not the telephone network. The unwillingness of Vonage and Skype to interconnect with other VoIP providers makes no more sense than Yahoo imposing on users a proprietary browser that can’t be used to access any other sites on the web.
The voice quality of a telephone call remains inferior to even an AM radio broadcast. Low fidelity loses much of the character of voice necessary to convey mood or subtle meaning not contained in the words themselves. A telephone call remains a poor substitute for meeting in person, but demand for high-quality audio still requires an industry wide market push, as in the effort that won HD video momentum. Improving voice quality remains off the table as long as the value of VoIP requires interconnection with the telephone network.
None of the means used to navigate the Internet have analogs in the telephone world. Web site visitors can arrive by entering a URL into the browser address bar. The relative ease of remembering domain names vs. telephone numbers is difficult to dispute; a significant portion of web site visits are the result of people guessing the URLs. And compared to web search engines, both the online and offline versions of yellow pages offer very weak functionality.
Absent a requirement to connect with the telephone network, VoIP implementations can support click-to-connect and flat-rate global connections. The problem is finding a path to critical mass. The rapid growth of the web after the emergence of the browser in 1991 followed the addition of click-to-connect functionality to flat-rate global connectivity associated with Internet. The web browser set in motion a virtuous cycle of growth as expanding content attracted new audiences and audience growth attracted new content. The same process could play out with a worldwide communications model that combines click-to-connect addressing and flat-rate global termination — neither of which can be found by interconnecting with the telephone network.
Daniel Berninger is the CEO of Free World Dialup
7 comments so far
8:17 AM PT
Excellent post. Your predictions are very much in line with what we are expecting to see in the near future.
Another key benefit of advanced voip communication can be predicted to reflect in the websites - where (just like how google does for businesses today) websites will make it easy for users to contact them by just one click using the site, which will inturn use VOIP to activate the call.
3:28 PM PT
No knock against VoIP as we too rely on VoIP in our network; mostly to complete outbound calls to very remote areas of the world. However, to suggest that the quality & reliability of VoIP is better than what you’ll find on the Public Switched Telephone Network (PSTN) is just not accurate. The problem with the PSTN has nothing to do with quality or reliability, but the fact that this network has been exclusive to major telecom players only does pose a problem for application innovators looking to add voice. If you didn’t have a big telephony switch, the PSTN wasn’t an option for you & your business. This is exactly what was so exciting about Jaduka releasing voice APIs to the Web 2.0 community. With our APIs we’ve given anybody access to build clever new voice applications using the PSTN. You don’t need VoIP to deliver new & innovative voice applications; you can build the same innovative applications using Jaduka’s APIs & with them you get access to the quality & reliability of the PSTN.
3:28 PM PT
Great post!
You wrote: “The unwillingness of Vonage and Skype to interconnect with other VoIP providers makes no more sense”
What is the solution for this? May be the formation of an international advocacy group that will persuade the interconnection of all the different VoIP and IM systems out there?
1:27 AM PT
So, here is a dose of reality. Skype “just works”, installs in seconds with no configuration and it already has high quality audio, ~25% of Skype calls are video calls, SkypeIn and SkypeOut are SIP based gateways that interface to the POTS network, so its already well integrated. And as for “finding a path to critical mass” Skype is downloaded more than a million times a day. The total number of downloads since they started Skype will pass one billion in about 40 days (obviously this includes many software updates for the same user) in September 2008. The daily concurrent online user count peaks at about 12 million nodes. If that isn’t critical mass then nothing is. See (link) if you want to track the numbers. The most downloaded program ever in the history of the Internet…
4:11 AM PT
Brian,
The column argues VoIP *could* provide better quality if not dumbed down to PSTN voice quality. PSTN audio frequency response is fixed by the network at the 3khz between 300hz and 3300hz. Human’s can hear up to 20,000hz, so there is a lot of audio info dropped in a telephone call. This is particularly a problem for women as their voices tend toward the higher frequencies.
The column does not say anything about reliability. The PSTN will win on reliability front for the forseeable future and, therefore, for any applications that need very high reliability. The point of VoIP gets much brighter to the extent on wants to pursue new communications and incremental new usage rather than just mimic the telephone call. Jaduka is helpful, but it gets offered at a relatively high per minute rate. Web like viral growth requires flat rate global termination.
9:16 AM PT
Adrian,
Skype wins the sweepstakes for the most traction among VoIP apps, but column makes a different point. The proprietary nature of Skype (and unwillingness to interconnect with other VoIP providers) means it falls far short of its potential. The number of end points on the web grew 10x per year for 10 years between 1991 and 2001. This owed to the ability of web browsers to navigate all web end points. The Skype client remains locked to Skype end points. The 12mn number for Skype end points is tiny compared to the 450mn ports worth of VoIP chips sold by TI alone. Skype rewarded its founders very well, but changing the world requires an open protocol.
9:18 AM PT
@Daniel You are correct about the allowable frequency range of the PSTN. These configurations were decided 60 to 70+ years ago for costing reasons that may or may not be applicable today. The reality is that while VoIP can offer better frequency ranges than what is currently allowed on the PSTN, what is to suggest that people need or want stereo quality telephone conversations? To make that point, consider mobile phones. The audio range on a mobile phone is 70% of a landline & the number of mobile phone handsets has far surpassed the number of landlines in the U.S., even the world. Today, mobile consumers are demanding more applications & services for their mobile phones rather than concerning themselves with improvements in voice quality & that trend doesn’t appear to be changing.
To your comment about pricing. Unless the termination is to a PC or VoIP phone (ala Skype), there is going to be some variable termination cost. With pure VoIP to VoIP calls you are excluding the development of services that reach the billions of mobile & landline users. Jaduka’s costs are highly competitive & with our toolkit & NetworkIP’s extensive telephony network anyone can create new services & solutions that extend to any landline, VoIP, or mobile phone in the world.
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