We can finally say it—voice over IP (VoIP) is alive and growing! Some of the places it is springing to life may surprise you.
Although activity is beginning in MSOs like Time Warner and GCI, more action in VoIP technology is outside cable. Several municipal utilities are seriously interested in offering the triple-play. Many of them believe that their experience in running a utility and their right of way ownership give them a foothold into a new broadband services business.
There are now over 500 municipals planning, building or running broadband offerings, and 37 of them offer local telephony. It’s enlightening to analyze how they enter a market already occupied by cable and telcos, and capture sufficient market share to make a viable business.
Gaining voter approval
Most outsiders assume that municipals have little risk, because they are subsidized by a utility or funded by public taxes. This has been true for some, but increasingly, aspiring broadband utilities must gain voter approval before entering the business. The process can be even more difficult than when a publicly owned operator seeks shareholder approval for an acquisition, because there are typically no blocks of votes that can be won as a group.
The need to win voter approval forces alternate providers to take different routes to broadband implementation than those used by cable operators. In Paxton, Ill., electric co-op Conxxus is using Wave7 Optics fiber access equipment based upon IP over Ethernet to move data, video and voice packets to headend equipment. Other systems using fiber to the home are planned in southern Illinois, Wisconsin and suburban Chicago. These companies see the high bandwidth availability of fiber to the home as an investment in the future that can be sold to voters.
Network design also is different. To minimize costs in the voter business case, many municipals planning VoIP service are building their infrastructure without certified end-to-end solutions. These emerging operators consider their network as a large version of a corporate data network. An in-house engineer becomes a systems architect, who builds a packet network from scratch with components chosen from vendors that sell to multiple markets. Under this philosophy, each system operator or its consultant is responsible for figuring out a unique solution to process and route data, voice and video over a multipurpose broadband network.
Several vendors of VoIP enterprise call servers and switches are eager to foster this approach, seeing the opportunity for a foothold in an emerging market. Vocal Data, for example, has expanded its VOISS server feature set to include basic residential CLASS features. Other vendors active in the competitive local exchange carrier (CLEC) market, such as Class 5 switch replacement Taqua Systems, are planning SIP and MCNS access interfaces. Compared to PacketCable certified equipment, the initial investment is often lower, and scales better to low line sizes.
The downside is that while a modified enterprise solution can work for small public networks under normal conditions, it can lead to problems as those networks become stressed by increased traffic and larger subscriber take rates. Listing just the major network elements in a VoIP system, we can identify call/feature servers, media and residential gateways, trunking gateways and announcement servers.
Carrier grade standards require both the network elements and the total system to perform to 99.999 percent reliability. As those close to PacketCable know, one reason certification is so slow is that all the interfaces between components must be tested for multiple signaling scenarios. There are numerous possible combinations and multiple possible failure modes.
Integrating the system
An aspiring municipal service provider can either do systems integration and acceptance testing in-house or rely on its vendors to guarantee performance. Unfortunately, neither alternative is easy. Many potential providers do not have in-house resources, and most vendors give a similar answer to the one I got from Steve Baechle, applications engineer at Vocal Data.
"We do not usually provide systems integration services. We will help our customers to build their network with other vendors where we have done interoperability testing, but network design and reliability testing is the customer’s responsibility," he said.
The lack of certified five nines of reliability does not automatically mean the municipal broadband offering will be a failure. Remember that such high standards are driven by the fear of consumer reaction if the system fails to deliver service. This reaction can be minimized if consumers become involved in the planning.
Unlike large systems, municipal utilities are integral parts of small communities. Consumers often know the staff, and become involved as they learn of proposed new offerings. The proposed tri-city broadband offering in Geneva, St.Charles and Batavia, Ill., is a good example.
As the towns prepared a referendum to gain approval for the project, a grass roots citizen group called "Fiber for Our Future" simultaneously formed and began an informational campaign to win voters. Although the referendum to approve the project failed to pass, the split in votes was a relatively close (40 percent for, 60 percent against), despite the small funding available to the citizens group compared to the backing of the incumbent cable and phone companies.
Some insight into what drives consumer support can be gained by comments from Annie Collins, a leader of the Fiber-for-Our Future campaign. Although Collins has no formal technical training, she is motivated by the need for a solution to a technical problem that affects her family and town.
"We’re talking about the future of my kids. By gaining a new technology for our community, we have a new tool for schools and services in areas we haven’t even thought about, such as telemedicine," she said. "A lot of people rely on fast Internet access, and none of the existing service providers were willing to meet our needs. People and businesses are leaving our community because they can’t get something they need at a reasonable price."
Because of this conviction, Annie and the Fiber-for-Our-Future group learned basic broadband concepts and donated personal time and money to campaign for a municipal broadband offering. Their tools included personal contact with residents through town hall meetings, phone calls and media involvement. With that type of up-front citizen support, a municipal service provider is likely to enjoy some tolerance if it needs to fix unanticipated technical problems.
Don’t get me wrong. I’m not advocating that municipals or any other broadband company strive for less than five nines of reliability in a public telephony offering, nor am I saying that municipal utilities will usurp incumbent service providers. I am, however, suggesting that all service providers can learn from the experience of actively involving community leaders in planning new offerings. The process makes consumers more understanding of tradeoffs. It makes it easier to introduce new technology and its associated revenue a lot earlier than otherwise possible, and can provide good competitive leverage.
Justin J. Junkus is president of KnowledgeLink, Inc., and Communications Technology’s telephony editor. To discuss this topic further, email him at firstname.lastname@example.org.