BY RICH TEHRANI
Group Publisher

Forget Ma Bell, Meet Ma Packet!

We know Ma Bell as the monopolistic phone company that was supposed to be the leading casualty of the IP telephony revolution. It was obvious that more and more telephony traffic would travel over IP networks -- either intranet- or Internet- based -- and who stands to lose more from this packetized telephony migration than AT&T? Who else has such a colossal amount of revenue coming from long distance charges that could be lost to myriad IP telephony service provider upstarts?

But Ma Bell is no longer the monopolistic, lethargic bureaucracy it once was. In the last few years, AT&T has been an industry leader in the wireless arena. I am a happy user of the AT&T Wireless Network and immediately saved over $300 per month as soon as I switched to AT&T from my previous Bell Atlantic telephone service. For those of us growing up in an AT&T-dominated telecommunications era, we never associated AT&T with saving money, just quality. How times have changed.

AT&T completed its merger with cable leader TCI early in March 1999, and more recently the company has made an offer to acquire MediaOne (read the press release here). What these acquisitions do for AT&T is provide last mile access to millions of cable subscribers throughout the U.S., finally bypassing the LECs and their per-minute access fees.

But AT&T hasn't stopped there. The company realizes that the days of AT&T providing all your telephony are over. In an era where the number of IP telephony networks are increasing faster than this spring's pollen count, AT&T realized a great way to get involved more deeply into the IP telephony market: Providing a global IP telephony clearinghouse. In today's telco world, where there are far more players and networks than ever before, it is nearly impossible to have settlement agreements with a majority of the network players. Even with automated billing, companies cannot afford to draw up agreements with each and every other player on the network and ensure that all players receive their piece of each call. To solve this problem, many providers choose to negotiate with a central player called a "settlements clearinghouse."

The AT&T Global Clearinghouse will initially support clearing and settlement of voice and fax traffic from both Clarent and VocalTec Internet telephony solutions. The strength of AT&T's clearinghouse is that all clearinghouse members have instant access to a network connecting over 220 countries worldwide, which saves members' time and cost in not having to negotiate and manage numerous agreements with hundreds of ISPs. AT&T's clearinghouse already has members in Asia/Pacific, Europe, North and South America. In fact, Clarent has been working with AT&T and their clearinghouse for almost two years.

AT&T seems genuinely interested in its commitment to multiple platform support, and is making its platform requirements available to other interested gateway providers, giving them the opportunity to develop software to support their clearinghouse settlement process.

So as the IP telephony race heats up and hundreds of new players encroach on the space once exclusively occupied by AT&T's legacy circuit switched network, it's good news that Ma Bell, the queen of the monopoly game, has been working out and eating right and can now compete with best of breed companies in almost all facets of IP telephony. As packetized networks permeate the traditional circuit-switched telephony space, it is wonderful that Ma Bell is trying to establish itself as the leader of the IP telephony world.

Rich Tehrani welcomes comments at rtehrani@tmcnet.com.

• Interested in learning more about clearinghouses? Read "OSP Settles The Score On Internet Telephony Billing Practices" written by Mark Bakies of Cisco Systems in the April 1999 issue of Internet Telephony magazine.
  
  
• For an intriguing viewpoint on the AT&T and TCI merger written by CTI magazine's associate editor Chris Donner, read the TMCnet.com column "AT&T/TCI And High-Speed Internet Access."