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Simulating VoIP

With all that is going on in Washington D.C. right now it is easy to lose sight of the $7+ Billion dedicated to the broadband portion of the American Recovery and Reinvestment Act. It is amazing that $7+ Billion could be considered a small amount of money and get lost in the shuffle, but that's what seems to be happening. There are many distractions to choose from; healthcare, jobs, the other $700+ Billion of the Stimulus and the socialization of America just to name a few. Many people wonder if the broadband portion of the Stimulus will be wasted, or actually be put to good use.

We may not know how the Stimulus funds will be allocated but one thing that we do know is that where there is broadband there is VoIP. The two go hand in hand as it is logical and economical to bring expensive, legacy PSTN services on to a broadband IP network connection once the cost to establish it is sunk. For many end-users the justification for the higher monthly cost for broadband is subsidized by the reduction in total monthly spend on voice services actually creating a savings by moving to broadband. Where the end result may be a net-neutral spend the benefits of increased speed and improved experience are the difference. This situation has played itself out in the metro areas for years and stands ready to repeat in the rural areas in the coming years.


As always, time will tell. Time is counted in minutes and it is still billed that way in many parts of this country for voice services. For those with broadband connections the new way to measure and bill for time is unlimited and flat-rate. Those people have already saved a lot of money on their voice services and received a lot of additional value from broadband. Who knows, the amount of money that the people in non-broadband connected areas could save once they get access to it might actually reach $7 Billion. Of course, the service providers will try to get that all back with new video services, but none of it is possible without broadband.

Hopefully the Stimulus funds find their way to the right projects that can bring real, meaningful change to the greatest number of Americans, but even if a good part of the Stimulus gets allocated to create digital islands at least they will be primed for when the middle-mile bridge is built that connects them to the rest of the world. One thing is for sure - wherever there is broadband there will be VoIP. The economics dictate it as such. IT

Hunter Newby (News - Alert) is the chief strategy officer and a director of a special purpose acquisition corporation focused on the communications industry. Reach him at hunter@hunternewby.com or visit www.hunternewby.com.

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