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Optical/IP

RBOC VOIP Coming in 2004

The VOIP services market is gearing up for some big changes.

If you thought things weren't interesting already, consider this: RBOCs (regional Bell operating companies) are sketching out plans for VOIP services next year just as the Federal Communications Commission (FCC) is examining the potential for regulation in the market (see FCC Sets Date for VOIP Inquiry).

In the past couple of weeks all the Baby Bells have announced VOIP rollout plans for next year as they try to offset defections to competitors, especially to cable and wireless carriers (see Bells' Hell: VOIP?).

SBC Communications Inc. (NYSE: SBC) this week took the wraps off a new VOIP service aimed at businesses with up to 250 workers (see SBC Offers Hosted VOIP).

Dubbed PremierSERV Hosted IP Communication Service (HIPCS), it includes traditional telephone services as well as unified messaging, in which voice mail and email can be consolidated in a single inbox, and voice mail can be forwarded like email; find me/follow me, which enables employees to forward calls to a mobile phone, remote office, or another extension; click to call; and conferencing. A plug-and-play feature enables users to plug in their IP phones from anywhere in their networks.

Next up, speaking at the UBS AG global communications conference in New York this week, Verizon Communications Inc. (NYSE: VZ) vice chairman and president Lawrence T. Babbio spilled the beans on his company’s VOIP plans for next year.

Verizon intends to offer VOIP to its DSL home users in the second quarter of next year and to business customers later. The two-phase strategy begins with a consumer VOIP offering positioned as a second-line service for DSL users. Verizon will either outsource the service or build the application itself. It will offer several plans for local, long distance, and international calling, as well as free on-net calling. It will allow the user to manage features via the Web, including Web-based voicemail and address book integration. Phase two, beginning in the fourth quarter, 2004, will be a managed network VOIP service with QOS (quality of service), aimed at “work-at-home professionals and small businesses,” Babbio said.

BellSouth Corp. (NYSE: BLS) announced in October that it would start offering bundled VOIP services to small to midsized companies (see Nortel, BellSouth Team for VOIP).

And lastly, jumping on Vonage Holdings Corp.'s success beating the regulators in Minnesota last month, Qwest Communications International Inc. (NYSE: Q) announced it would launch a VOIP service in the same state (see Qwest Jumps Into VOIP Hotbed).

Table 1: RBOC Voice-Over-IP Plans
Launch date No. of markets Target customers Price
Qwest Pilot Dec. 2003 Minnesota Consumers, SMEs Not disclosed
SBC Available now 13 States SMEs $29-$39 per month
BellSouth Phased rollout starts 2004 9 States SMEs Not disclosed
Verizon 2Q04 (consumers)
4Q04 (businesses)
Nationwide DSL consumers,
home office
Not Disclosed


At first glance it looks as if this flurry of VOIP announcements by the RBOCs stems entirely from the decision made recently by the Minnesota court judge. The judge agreed to let Vonage offer telephony as an Internet data service, thereby freeing it from various taxes associated with traditional phone services.

But Stephen Kamman, analyst with CIBC World Markets, thinks the transition to VOIP services is not being driven by any sort of regulatory loophole in FCC or state efforts to deregulate data services. "In a nutshell, we expect carriers to buy VOIP on its own merits, not in order to escape the current voice-related regulatory regime,” he said in an investment note issued this week.

Of course, the paradox of all this is that RBOCs may be speeding the demise of their own voice business. But at the same time, VOIP offers them a less capital intensive method of deploying new services and revenue.

— Jo Maitland, Senior Editor, Boardwatch

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rjmcmahon 12/4/2012 | 11:13:52 PM
re: RBOC VOIP Coming in 2004 If the RBOC's are talking VOIP, Why are they doing so?

The trick a monopolist follows is to embrace and hijack threatening technologies. The RBOCs and cable cos used this technique with broadband. They propagated a belief that DSL and cable MODEMs provide for high speed access. Neither does, but the public is too ignorant to understand what's really going on.

A lesson we can choose to accept is that hijacking things will never enable a civilized society nor advance our industry. That we tolerate these hijackings suggests our society and our industry needs to be educated and freed from inept leadership.
wise 12/4/2012 | 11:13:47 PM
re: RBOC VOIP Coming in 2004 Thanks for making the point about SS7. I keep wondering about what happens to E911 in a VoIP world? For DSL, I understand there is a fail-over capability. When the power goes out, the how-ever-many DSL lines fail-over to POTS, and the E911 information can still make it to the SS7 network. How does what I typically think of as out-of-band signaling for calls get translated into the SS7 network from a VoIP network?
opto 12/4/2012 | 11:13:47 PM
re: RBOC VOIP Coming in 2004 "there's no large VoIP platforms a la Class 5 required, it's merely about routers and bandwidth, the network likely to become distributed and flat."

True, but only for greenfield. Reality is much different. As long as you have to connect to ANY existing switched network, which will be true for everyone for at least, 0h, say 50 YEARS, then you will need an SS7 connection to it. You cannot do that with a flat network of CPE-based intelligence. Verizon agreeing to give everyone and his uncle IP access to their 600E's through the internet? Not going to happen. Ever. Yet that is the only way to avoid centralized processing of the new IP network.

Large enterprise, where you have a significant portion of traffic within the system, has proven VOIP first for that reason. Of course VOIP is migrating outward, but this will be a long, slow process. 5E's and DMS100's will be around for a very, very long time. And they will connect with DSC/Alcatel or Tekelec STP's for a very, very long time.

This has been, and always will be a fundamental design criteria: new networks must be backwards compatible. Sure, that fundamentally changes the value equation for a lot of innovative new technologies. But that's reality.
aswath 12/4/2012 | 11:13:46 PM
re: RBOC VOIP Coming in 2004 Messages 12 and 13 assume that the market will treat VoIP as an alternate to POTS (agreed that is how the service providers and vendors are playing it). Given the power, emergency and other operational deficiencies of the current VoIP architecture, it is conceivable that the market may decide to treat VoIP as an additional communication vehicle rather than a replacement of POTS. In that case, there is no need for a network-based mediating service provider. Such a scenario becomes much more likely if the regulation pulls the rug from under the feet of arbitrage market strategy.

Aswath
opto 12/4/2012 | 11:13:42 PM
re: RBOC VOIP Coming in 2004 "How does what I typically think of as out-of-band signaling for calls get translated into the SS7 network from a VoIP network?"

http://www.syndeocorp.com/solu...

This provides a nice diagram at the bottom of the page. This is one version. My understanding is that Comcast considers these guys "carrier class", so I think they should be credible.

Basically, you need something to talk to the ss7 network for call setup/takedown, a signalling gateway, and something to carry the trunks or payload, a trunking gateway.
materialgirl 12/4/2012 | 11:13:42 PM
re: RBOC VOIP Coming in 2004 A new paradigm will not happen without revolution. However VoIP grows, it will not look like POTS in any way, or it will not scale. Expect the unexpected, the chaotic, the most disruptive path.
opto 12/4/2012 | 11:13:41 PM
re: RBOC VOIP Coming in 2004 Shall I be a little more explicit?

If you make a call on the IP network to someone on the IP network, of course this is easy. No ss7 needed, for most types of calls. Operator services? can be done IP, but its not cost effective, so that will be circuit switched at some point. Emergency? Same issues.

If you make a call from the IP to a traditional circuit, you HAVE to touch the ss7 network. Period.

That is where the problem lies. You therefore must have, somewhere, the ability to talk to the ss7 network. No owner of an ss7 stp will let anything but a few highly tested and proven signalling devices connect to it. WAY too many things can go wrong to risk it. That is what has hamstrung CISCO, et al for so long. They did not understand the intricacies of the PSTN, thinking it could not be that hard. Well, hate to break it to you, but after 10 years of VOIP, there are now only a few companies with products that any stp owner will let connect.
Ringed? 12/4/2012 | 11:13:40 PM
re: RBOC VOIP Coming in 2004 Ironic that the failed 96 Telecom Act, WRT competitive access to the local loop is one of the key reasons why VoIP will continue to proliferate.

Everyone now knows the RBOC local loop has to
be bypassed and or leveraged whenever possible for any competitors to flourish. The same can be said for equipment vendors.

The local loop is being bypassed with VoIP over Cable (legacy voice too), VoIP over DSL :) and the latest assault to the RBOCGÇÖs precious loop, cellular service. Gotta love LNP. Granted SS7 is a workhorse but LNP does drastically increase SS7 traffic.

What will happen to the local loop? Could it be, that since the RBOCGÇÖs are last to market with VoIP that the coveted local loop will be relegated to providing the one-service VoIP opponents like to wave in the VoIP pundits faceGǪ E911 services :) Now that would be ironic.

Even more ironic will be that the RBOCGÇÖs will need to shed this copper plant to pay for pensions and high-dollar executives. And who will be the curator of this once precious local loop.

You Know it! Bobby Max!

Ringed?
dljvjbsl 12/4/2012 | 11:13:40 PM
re: RBOC VOIP Coming in 2004
That is where the problem lies. You therefore must have, somewhere, the ability to talk to the ss7 network. No owner of an ss7 stp will let anything but a few highly tested and proven signalling devices connect to it. WAY too many things can go wrong to risk it. That is what has hamstrung CISCO, et al for so long. They did not understand the intricacies of the PSTN, thinking it could not be that hard. Well, hate to break it to you, but after 10 years of VOIP, there are now only a few companies with products that any stp owner will let connect.


There are all sorts of trunking protocols No 5, No 6, Compelled MF, DX, SX, and so on forever. Everyone of these interconnects with SS7 and each other. Implementing trunking protocols on gateways is not rocket science. VoIP is not going to be held up by the lack of ability of Cisco, Nortel, Siemens, Alcatel, Lucent, Avaya etc. to implement the SS7 spec.

I've always regarded the IETF BellHead/BitHEad attitude to be bunch of nonsense. It doesn't look any better when advocated by someone from the telephony side.
WiserNow 12/4/2012 | 11:13:39 PM
re: RBOC VOIP Coming in 2004 dljvjbsl wrote:

VoIP is not going to be held up by the lack of ability of Cisco, Nortel, Siemens, Alcatel, Lucent, Avaya etc. to implement the SS7 spec.
------------------------------------------
VoIP has been held up by this problem. Media (or Trunking) Gateways are easy to create but they need a GÇ£softswitchGÇ¥ or other controller that connects to the SS7 network. Despite their rich switching heritage, Alcatel, Lucent and Nortel have all failed to produce a carrier class GÇ£softswitchGÇ¥. Cisco bought a bunch of startups that claimed to have solved this problem, but none of them got approved by carriers and eventually, Cisco shut down development.

The traditional switching players understand the problem space but they long ago lost the creative drive and energy to produce complex new products that are cost efficient. There have been many startups in this space, but it is a tough market for a startup.
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