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The Edge
January/February 2001

Ralph Hayon Bridging The Great VoIP Divide

BY RALPH HAYON


I recently met with an ISP that was very interested in offering Voice-over-IP (VoIP) services. They currently sell digital subscriber line (DSL) data services and compete by offering full-rate managed 1.5 Mbps DSL at half the cost of unmanaged T1 services. Now, they want to go to the next frontier -- to offer telephone services over DSL.

The CEO of this company was relating to me how strongly he felt about this offering and the demand he sees, especially for customers with offices in distant locations. He wanted to address this need with a DSL and VoIP combination. In his search for a solution, he approached one of the well known communication equipment companies (who will remain nameless here) and got a quote for a legacy switch-based IP Centrex solution that could potentially meet his needs. The price tag: A cool $15 million.

TALK IS CHEAP
There is a lot of talk about VoIP. Many now refer to is as Voice over X, where you name the X -- DSL, T1, wireless, optical Ethernet, etc. While talk is cheap and VoIP minutes are even cheaper, one thing is for sure: Many of the systems needed to provide VoIP and the required technical teams to deploy it are not. In many cases, the systems being offered to broadband carriers typically have many drawbacks ranging from lack of proper VoIP standards support (true H.323 and SIP, for example) to feature set, to scalability.

Bottom line: VoIP is complex. No matter what vendors tell you, it takes a lot of money, time, and effort to make it work properly. This is especially true for new VoIP services such as IP Centex, IP voice messaging, and e-commerce. Products are evolving quickly and new standards are being ratified on what seems like a daily basis. Most traditional and emerging communication carriers -- CLECs, ISPs, and BLECs -- don't have the bandwidth, personnel, or experience to deploy and manage this emerging VoIP-based equipment. In fact, for many years these carriers have been fed monolithic communication solutions -- i.e., legacy circuit-switched solutions -- from a very select group of communications equipment companies. These companies did everything for their customers: They brought them the total solution, told them which people they had to hire, helped them train those people, and sold them more services to maintain the very expensive solutions they sold them originally.

THE VoIP ERECTOR SET
VoIP is poised as the solution for next-generation telecommunications. But a great divide exists between the VoIP "gear" companies and the broadband carriers that need to deploy VoIP telecom service offerings -- which are needed to differentiate them in the highly competitive communication services market. VoIP gear vendors are proud of their "erector set" approach, which allows the broadband carriers to pick the media gateways, softswitches, IP phones, and service creation tools of their choice. But this is as confusing and risky to the broadband carrier as is the menu at the Tic-Toc Diner: Too much to choose from and you really don't know what tastes good!

THE ROLE OF THE CASP
The communications ASP, or CASP, bridges this divide -- it has the network, personnel, skills, resources, and in some cases, the technology, to offer the broadband carrier the benefits of VoIP via "infrastructure services." Infrastructure services allow a CLEC, ISP, and BLEC to buy the VoIP telecommunication services they want and bundle them with their traditional broadband data services. VoIP infrastructure services, instead of infrastructure equipment, allow broadband carriers to quickly introduce new and enhanced telecommunication services with zero infrastructure costs and minimal technology risks. Additionally, the broadband carrier is also freed from scalability costs and risks, a serious consideration in rolling out IP Centrex and similar VoIP services.

The CASP is a new and emerging industry segment. Just as the ASP model helped bring Internet e-mail, Web hosting, and other offerings more quickly to market, the VoIP-based CASP promises to bring high-quality VoIP services more quickly to the fast growing broadband market. The CASP allows broadband carriers to transform into full-fledged Internet Communication Carriers (ICCs) that can provide a wide range of services -- voice, data, and video -- with quality over their broadband links.

ASK QUESTIONS -- NOT ALL CASPs ARE ALIKE
Be aware, not all VoIP CASPs are alike. When getting involved with a CASP, it is only fair to ask how their network is designed to provide VoIP with high quality, security, and reliability. Leading-edge CASPs are deploying networks that are highly redundant and located in secure facilities with multiple power sources, environmental management, and fire controls. Sophisticated CASPs provide direct support of IP telephone appliances and allow the delivery of media and content to such appliances.

CASPs allow broadband carriers to cross the "VoIP services divide" more quickly and to offer traditional and enhanced VoIP services with less cost and risk than otherwise possible.

Ralph Hayon is president and CEO of congruency, Inc., a Communications Applications Service Provider (CASP). He can be reached at [email protected].

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