Going Over the Top with VoIP

The polite term for those who deliver VoIP using cable and telco broadband infrastructure is voice-over-broadband (VoBB) providers. The impolite term is "over-the-top" (OTT) scalawags. The incumbents’ party line is that the OTT guys aren’t working with a full deck or a full technology, and only those with the infrastructure can provide reliable service-even if it’s maybe a little dull and looks an awful lot like what’s been in place for 100 years.
 
Last week at Spring VON in San Jose, the VoBB providers made the case that compared to the conservative, POTS-like approaches of incumbent brethren, their product offerings are compelling,  far-thinking and take the best advantage of IP to the benefit of the end user. Video telephony? For instance, Bryan Martin, chairman-CEO of 8×8-known to the public as Packet8-pushed the outside-the-bounds idea of video telephony. "We’d like to see more acceptance of video into the voice space," said Martin, echoing a theme at a show that was supposed to be about voice but quickly became about video. "Video is a phenomenon that you really have to see because it has such a black eye going back to 1964." 8×8, he suggested, would like to apply a steak to that black eye and make video a bigger part of IP telephony services. Video, though, is only a component of an 8×8 marketing plan that includes the unthinkable: selling Packet8 service and Uniden phones at Home Depot to widen consumer appeal in the most consumer-like retail zone of all. The commercial space Outside consumers, 8×8 is chasing customers that the telcos and cable can’t find with a GPS: the "extremely tiny small end of the businesses I call micro businesses," Martin said. This is a group, he said, that’s "very underserved by the RBOCs" but is a "remarkable demographic of the U.S. business market." Today’s VoIP pitch, whether to consumers or businesses, is all about price, the panelists agreed. "I don’t want to call our customers cheapskates, but …" Martin said with a laugh. "In the U.S., it’s all about price." That must change for VoIP services to be taken seriously by the mass market, argued Matt Stein, vice president of new technology and services for Primus Telecommunications in Canada. "It has to be one step ahead of that because it is features people are interested in," Stein said. Cable and the ILECs, he said, are "rarely" offering new features and "really offering a POTS services" where "the benefit isn’t for the consumer; it is just for the provider." It’s about voice David Span, vice president of product management and marketing for cable ally and supplier Net2Phone, disagreed and aligned himself with the cable industry’s mantra: "It’s not about selling VoIP; it’s about voice." Still, even he agreed, "there’s a lot of parity in the product offerings; the difference is how we go to market." During their own sessions, the incumbent telcos and cable guys reiterated how they’re approaching-or in the case of the telcos, avoiding-the VoIP market. VoIP is a backburner issue for carriers still trying to fit together all the pieces they’ve acquired-SBC becomes AT&T and buys BellSouth; Verizon buys MCI and sets up Verizon Business. Besides, they’re telcos, and they move just slightly faster than glaciers. Why bother with VoIP? Of course, why would any telephone company that’s making obscene amounts of money with existing telephone services want to move into VoIP? "We will move when the marketplace moves," promised Steve Zimba, director of converged services, who will soon be moving himself from BellSouth to AT&T. The telcos aren’t threatened by VoIP because there’s no such thing as "naked DSL"-the ability to buy just a DSL line without a voice line. A VoBB provider jumping on DSL must compete against incumbent voice service that’s already there. Riding on cable, as 75 percent of 8×8’s customers do, is a different story. Cable’s lead packages are video and data, and only now is VoIP becoming an option-with limited, albeit reliable, features. That’s an opening for OTT players to move in and steal away voice customers. Keep it simple Cable’s responding to this threat by trotting out tried-and-true market plans to deliver voice as a "simple, straightforward product," according to Michael Jablon, senior director of Time Warner Cable‘s digital phone products. "We’re selling a primary line service-no ifs, ands or buts about it," reinforced John Butz, senior director of communications product development at Comcast. And the cutting edge Voice on the Net-that’s VON, you know-audience collectively yawned. Peering Perhaps most surprising of all for the penny pinching OTTs, there didn’t seem to be great urgency to enter into peering agreements among VoIP providers to keep voice traffic off the PSTN. And there was no great desire to settle into peering clearinghouses being set up by companies such as NeuStar and XConnect. "We all have a vision where we don’t have to send any of these minutes back to the PSTN," said Martin. "The economics aren’t there to do this." It is, added Stein, "just not worth it right now. It’s just not a big enough piece of the (cost) pie." CableLabs update Also on the cable operators’ VON panel-OK, so there were more than three cable people at the voice on the net show-was Jean-Francois Mule, vice president of IP technologies and services at CableLabs, who said that newer versions of the PacketCable specification will have "a lot more flexibility in the way we handle SIP" and that the specs plan to leverage the mobile 3GPP IMS standard, enhance QoS and "ensure backward compatibility with cable voice deployments." Even more remarkably, for the go-it-alone R&D consortium of the go-it-alone industry, he suggested cooperation. "We just can’t be building IP communications in silos," Mule said, sounding like his telco counterparts. "We cannot do our work well without collaboration." – Jim Barthold