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HeavyDuty
HeavyDuty
12/5/2012 | 3:10:47 AM
re: VOIP Peering: Incumbent Killer?
How is the end-user getting to this IP peering system?

Maybe, from a DSL connection at the SOHO. The infrastructure for that still requires a PSTN last mile connection, from the folks with the physical plant to offer: your local LEC! That means you pay your DSL service provider that, if it isn't the LEC, leases the last mile from the LEC. Then, you have to get from the central office to the VoIP peering location, probably via a leased line; the only way to get there from here if you want to avoid the lines leased for the Internet.

Now, use common channel signalling (ccs; a.k.a., SS7) to get the VoIP traffic routed and add features that are the equivalent of a point-to-point, digital, PSTN (PSDN) line, because they are the feature provider for the aforementioned PSDN.

If you use a cable modem to get your VoIP connection the cable provider will need to use leased lines to get to the VoIP peering point then again to get to the end-point (through a LEC, if the call is to a PSTN end-point)...

How using the PSDN (a subset of the PSTN), via layers of vendors and adding the VoIP overhead, is going to kill the incumbents has escaped me. That said, I'm all for it if these guys really have a LEC killing alternative, or even successful pretense thereof.
HeavyDuty
HeavyDuty
12/5/2012 | 3:10:47 AM
re: VOIP Peering: Incumbent Killer?
How is the end-user getting to this IP peering system?

Maybe, from a DSL connection at the SOHO. The infrastructure for that still requires a PSTN last mile connection, from the folks with the physical plant to offer: your local LEC! That means you pay your DSL service provider that, if it isn't the LEC, leases the last mile from the LEC. Then, you have to get from the central office to the VoIP peering location, probably via a leased line; the only way to get there from here if you want to avoid the lines leased used by the Internet.

Now, use common channel signalling (ccs; a.k.a., SS7) to get the VoIP traffic routed and add features that are the equivalent of a point-to-point, digital, PSTN (PSDN) line, because they are the feature provider for the aforementioned PSDN.

If you use a cable modem to get your VoIP connection the cable provider will need to use leased lines to get to the VoIP peering point then again to get to the end-point (through a LEC, if the call is to a PSTN end-point)...

How using the PSDN (a subset of the PSTN), via layers of vendors and adding the VoIP overhead, is going to kill the incumbents has escaped me. That said, I'm all for it if these guys really have a LEC killing alternative, or even successful pretense thereof.
melao
melao
12/5/2012 | 3:10:46 AM
re: VOIP Peering: Incumbent Killer?
Great post.
People tend to forget that the physica layer is important.
The incumbents are still the ones with enough capilarity in their physical structure, to reach the end-users.
Hard to kill something like that. Built on many years.
OldPOTS
OldPOTS
12/5/2012 | 3:10:45 AM
re: VOIP Peering: Incumbent Killer?
Does anyone believe that a nat interconnecting a few VoIP suppliers together (peering) will destroy the PSTN suppliers?

My recollection was that my previous large enterprise network traffic was much more than the 3B Min/ year (~250 Million Min/m). The competition fails to understand the scale of the Tier 1 or Tier 2 PSTNs. CCSs/erlangs anyone.

The enterprises may also need a physical connection to a peering points. Probably also obtained from the LECs? But enterprises are probably a good starting point for the service.

Checkout Wiltel's latest announcement with SBC, 6/16. (see LR 'NEWSWIRE FEED') Does anyone really understand the size of their SBC adjunct network?
Lots and Lots of Fiber, why?

OldPOTS
rjmcmahon
rjmcmahon
12/5/2012 | 3:10:41 AM
re: VOIP Peering: Incumbent Killer?
Checkout Wiltel's latest announcement with SBC, 6/16. (see LR 'NEWSWIRE FEED') Does anyone really understand the size of their SBC adjunct network? Lots and Lots of Fiber, why?

Can you give more details? The newswire feed was light on anything real. Who owns and controls the fiber, SBC or Wiltel? Why is it an adjunct network? How will SBC transition off of copper to the fiber, i.e. will they rollup Wiltel in attempts to strengthen the SBC parent or will they take SBC wireline through bankruptcy, pawning off the pensions to places like the PBGC http://www.pbgc.gov/ (taking a page from other "deregulation" such as airlines and CA energy?)
Scott Raynovich
Scott Raynovich
12/5/2012 | 3:10:40 AM
re: VOIP Peering: Incumbent Killer?
I disagree, the access method does not matter. Revenue is the important thing to track here, rather than the access method or engineering paths. What the VOIP peering fabrics are doing is siphoning off revenue from incumbent service providers, both local and long distance, regardless of where the traffic comes from.

This is the fundamental impact as the network goes to packet from traditional voice.

Here's an example -- Say I pay $30 for packet broadband and $50 for all you can eat voice, which I purchase from an RBOC. The RBOC is routing the voice traffic over its own long-distance network or paying connection fees to an IXC. Let's say I switched to some sort of VOIP service -- so all of my voice traffic is going via packet via my cable provider or an Internet provider. The bill would be $30 or less, and the RBOC has lost all of the voice revenue. Then, if that traffic were routed and signaled through a VOIP fabric, the incumbent IXC loses all the interconnection revenue as well.

So the access point is moot. The RBOCs and incumbent lose revenue on VOIP no matter how you slice it.
jepovic
jepovic
12/5/2012 | 3:10:37 AM
re: VOIP Peering: Incumbent Killer?
VoIP is a threat to RBOC, sure, but I don't understand why VoIP peering should be especially threatening. VoIP carriers can cut some cost by not using gateways, but it's not like they are interconnecting via RBOC now.

Also, RBOCs can and will cut the prices of PSTN when they have lost enough market share. The real production cost of PSTN is lower than VoIP, for sure. There is nothing fundamentally cheap about VoIP, rather there are fundamentally expensive elements such as residential gateways. The high PSTN prices come from the overinflated organisations of the RBOCs, not the underlying technology.
HeavyDuty
HeavyDuty
12/5/2012 | 3:10:36 AM
re: VOIP Peering: Incumbent Killer?
"What the VOIP peering fabrics are doing is siphoning off revenue from incumbent service providers, both local and long distance, regardless of where the traffic comes from."

If your dialing an IP phone (making a phone call), be it via your cable vendor or DSL service, the call does get handed to the backbone for transmission to and from the VoIP peering center.

VoIP is an application that runs on OSI layer 3-7, the backbone is level OSI level 1-2. Layer 3 must go through level 1&2 to get anywhere. A great deal of the backbone is owned by RBOCs and IXCs (if the Feds allow SBC to eat AT&T and Verizon to eat MCI the RBOCs will own the vast majority of the backbone).

The VoIP providers are providing a telephone call as an application and are getting the volume rate for their connections to the backbone, not the retail rate a person or small business would pay.

"So the access point is moot. The RBOCs and incumbent lose revenue on VOIP no matter how you slice it."

The RBOCs and IXCs lose a little money when they provide volume rates to a VoIP businesses, so the access point is not moot. If the merger mentioned above goes through one can look for that cost to rise significantly.

As long as you youngsters keep forgetting that applications that touch remote devices and software use a backbone (OSI layer 1& 2), us old timers will always have a job.
Scott Raynovich
Scott Raynovich
12/5/2012 | 3:10:35 AM
re: VOIP Peering: Incumbent Killer?
If I could add something here, it mystifies me that folks continue to say the answer to the packet threat to the incumbents is, "But RBOCs own access."

Yes, they have access networks, but it's at a time when access methods are proliferating. At one time, the only line of communication into a house was copper. Now you have HFC, and mobile networks, and soon, WiMax.
Scott Raynovich
Scott Raynovich
12/5/2012 | 3:10:35 AM
re: VOIP Peering: Incumbent Killer?
"VoIP is an application that runs on OSI layer 3-7, the backbone is level OSI level 1-2. Layer 3 must go through level 1&2 to get anywhere. A great deal of the backbone is owned by RBOCs and IXCs (if the Feds allow SBC to eat AT&T and Verizon to eat MCI the RBOCs will own the vast majority of the backbone)."

Hmm, that is nice and technical. But you still haven't explained where the $50 in revenue goes when we drop the local RBOC as the voice provider and substitue with packet VOIP.

Or where the IXC revenue goes when the traffic gets transported as VOIP via softswitching.

Are you saying the incumbent voice business is just dandy?

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