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The IP Transition's Real-World Impact

Brent Mello
5/1/2014
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Out of curiosity I Googled "IP transition" and got back four pages of news results from the last month alone. So what's all the chatter about? Right now much of it circles around what the FCC will or will not do with various writers and industry experts parsing and reparsing statements.

Bandwidth.com General Manager Steve Leonard covered that topic in a recent post, but I'd like to take a look at what the transition to IP means to you, me, and other people who use a phone for business and personal communications. Here are some thoughts... (See Successfully Managing the IP Transition Is a Tall Order .)

A telecom coupling trifecta: In recent years, we have seen the success of coupling hardware and software -- Apple Inc. (Nasdaq: AAPL) created a whole new business model when it launched the iPhone along with the extremely successful App Store. The transition to IP sets the stage for the next evolution where tightly coupled hardware and software begin to leverage IP-based telecom services too. We've already seen this with the Amazon Kindle (hardware) leveraging the Android operating system (software) to deliver communications through Talkatone's calling and texting app (telecom services).

While currently fragmented across three different companies, we could see more Internet players integrate similar innovative offerings internally as an alternative wireless service. Demonstrating the point, rumors of an Amazon phone are resurfacing .

Combining hardware, software, and telecom services will create a new breed of service providers, and a great opportunity for innovation in both the consumer realm and for business communications, as companies selling unified communications platforms, for example, continue to expand. By coupling a UC provider's hardware and software with the ability to send or receive calls through an over-the-top (OTT) voice path, the notion of a standalone phone company for small and medium business could be turned on its head.

Fast disruption of traditional telecom models: The transition to IP lowers the barriers to entry for new OTT services. We're already seeing promising adoption of innovative apps such as the Talkatone example above, and hybrid WiFi calling from companies such as FreedomPop . Telecom is evolving, and leading providers who take advantage of innovative VoIP capabilities -- software-based capabilities that do not require a telecom infrastructure for support -- will be at the forefront of growing their customer bases by unlocking new value in communications services.

Farewell desk phones: As disruptive communications technology penetrates the workforce, clunky desk phones will begin to disappear from office environments. The industry has experienced a dramatic drop in landlines in homes across the country. The IP transition also makes it possible for the ultimate elimination of desk phones within the enterprise. Companies will begin to realize the cost-benefits of scrapping their traditional desk phones and embracing the innovation available through mobile-only business plans and OTT VoIP applications targeted at enterprise users. Businesses will cut the carrier cord, forcing service providers to rapidly innovate to stay relevant in the workplace.

A re-imagining of 911: The US's 9-1-1 infrastructure was built decades ago on a model that assumed every 911 call would come from a fixed-line TDM-based phone. With the transition to IP, that model is no longer sustainable as a 911 caller is now more likely to be mobile, and the call will most likely not be placed from a TDM-based phone. In fact it may not be a call at all, and instead it might be a text message. Telecom innovators, from application developers to OTT VoIP providers to more traditional providers of dial tone services, will embrace this change. And the transition to IP will give them a more robust technical sandbox to work from in securing their users' access to emergency services.

The IP transition is an exciting time to be a part of the telecom community. As services continue to evolve, the next great innovation is always just around the corner. The communications industry is at a crossroads; to succeed, providers must rise to meet consumer expectations by innovating relevant, engaging services and experiences. Those that continue to operate according to the status quo will suffer.

The biggest impact from the transition to IP will be measured in our ability to re-imagine communications and meet the demands of the marketplace for innovative, next-generation services, making the status quo obsolete.

— Brent Mello, Vice President, Origination & Messaging Services, Bandwidth.com

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Infostack
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Infostack,
User Rank: Moderator
5/4/2014 | 9:18:04 PM
What IP transition really means
There are a couple of ways of looking at IP transition and they are all correct.

 

First, it is the horizontal datanetwork model vs the vertically integrated telco model.

 

Second, it is about implementing settlement exchanges and models which IP lacks.  The IP stack doesn't have efficient supply/demand clearing north-south (app to infrastructure) or east-west (network to network or content/app provider to end-user).

 

To me the Comcast/Netflix disupte, IP transition and interconnect proceedings are all about where the WAN/MAN demarc in layer 2 is.  Edge access providers want it closer to the core and away from the edge.

 

But the cloud necessarily has to move to the edge.  We shouldn't be talking about IP transition (since that train left the station 10-15 years ago), rather we should be talking about the business models and policies which make 4K VoD, 2-way HD collaboration, seamless mobile BB and IoT universally accessible and inexpensive.

All of these require fundamental increases in capacity (particularly upstream), lower latency (proximity), QoS, redundancy and security in the last mile.

 

The core is doing just fine.  Since we didn't deal with the edge in 1996 effectively, we're forced to deal with it now.  The math (arbitrage) is pretty simple and stark: $0.0000004 vs $0.001 per voice minute; WAN vs MAN.  Google fiber has demonstrated moving the decimal place 2-3 places to the right in the MAN and can probably get another 1-2 places.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
5/1/2014 | 3:57:14 PM
That desktop phone
Today, many CLECs and managed services companies are building a lot of their business around the fact that, to date, desk phones haven't disappeared in the business world. While consumers are much quicker to drop their voice lines, businesses are looking for greater efficiences in combining voice with other communications methods, which P certainly enables. 

Some of those business plans are obviously evolving - Microsoft Lync is emerging as one platform that communications services providers are looking to -- and there are others. 

One reason the FCC's actions are important in this realm is that they obviously need to set the stage for the next generation of e911 services but also the way in which the all-IP network is regulated, the future of network interconnection and even Net Neutrality play into this new world of services. Those most fearful about Net Neutrality would say that without strong rules, broadband ISPs can make it impossible for OTT players to further cannibalize their services. I don't think that is likely, it's the kind of behavior that will get regulators crawling down your throat, but it is a concern for many. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/1/2014 | 3:37:14 PM
OTT
The IP transition apparently has real potential to help carriers compete more effectively against OTT vendors. 

I googled "IP Transition" and got this article on the first page of results. So that's good. :)

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