February 2005

In the CEO Spotlight section in Internet Telephony® magazine, we recognize the outstanding work performed by exemplary companies. Each month we bring you the opinions of the heads of companies leading the Internet telephony industry now and helping to shape the future of the industry. This month, we spoke with Michael Skubisz, Chief Technology Officer at Pannaway Technologies, Inc.

GG: What is Pannaway’s mission?

MS: Pannaway’s mission has remained consistent since the company’s inception: to be the premier access provider for the Incumbent Local Exchange Carrier (ILEC) community and to provide them with cutting-edge IP access technology and support that empowers them to increase services revenue, reduce operational costs, and compete more effectively against local cable and wireless companies.

Our company helps ILECs improve their success and increase profitability through the deployment of new and emerging IP-based services. We are heavily focused on providing quantifiable return on investment and value to our ILEC customers by delivering a robust suite of fully integrated IP access products enabling true “Triple Play” and beyond service delivery — and at a per-port cost that is unmatched in the industry.

GG: What is your vision for Pannaway and how is the company positioned in the next-generation telecom market?

MS: The ILECs that we speak with, almost exclusively, are targeting IP (either over copper or fiber) as their network transport for the delivery of high-revenue services like telephony, high-speed Internet as well as Video on Demand (VoD) and High Definition Television (HDTV). Additionally, technology analysts and other industry experts predict that IP will be the primary transport architecture used by carriers to deliver services in the foreseeable future.

Moving forward, we feel that our company is well positioned to take advantage of the increased interest in IP by delivering solutions to ILECs that are advanced, reliable, and above all else, cost-effective. Because we’ve built our architecture on IP as well as emerging technologies like SIP, and ADSL2+ Pannaway has the ability to move very quickly and will continue to stay on the leading-edge of the industry with regards to developing faster and smarter transport solutions. In 2005, we will challenge and break down access performance and feature barriers ensuring our ILEC customers are always prepared to support the next “hot” application.

GG: Describe some of the services Pannaway provides that sets you apart from your competition.

MS: VoIP might be the most sought- after technology in 2004 but many industry pundits agree there are still issues that need to be addressed before the technology is ready for primetime delivery. For instance, current VoIP offerings preclude customers from making E-911 calls during power or Internet outages.

We quickly recognized that the majority of our ILEC customers would not implement VoIP if it meant foregoing this precious life saving feature making VoIP suitable for secondary lines only. Working very closely with existing customers such as Oklahoma-based Cross Telephone, we architected our solution to deliver the industry’s first and only VoIP offering that is fully Lifeline POTS capable — and with support for advanced SIP-based calling features like distinctive ring tones and conditional call forwarding. In the case of a power failure the Pannaway network continues to deliver phone service and E-911 calling capability to the subscriber without interruption. And, the caller doesn’t lose any of the advanced calling features offered by VoIP.

This life-critical capability in conjunction with truly converged IP-based “Triple Play” service integration including IP Video, HDTV, Video-on-Demand (VoD), and bi-directional high-speed Internet access provides ILECs with the ability to offer their customers new emerging services with increased monthly subscriber income upwards of 200 percent.

GG: Now that it appears that growth and opportunity are the trends in the VoIP industry, what possible hurdles do you see that might upset this momentum?

MS: From an ILEC’s standpoint, VoIP by itself probably won’t be a major revenue generator in the near future. While there are significant administrative, operational, and cost savings benefits to deploying VoIP from a telco’s point of view, the technology on its own merit probably won’t warrant exorbitant infrastructure upgrade expenses.

Emerging services like IP Video, HDTV, VoD, and online gaming will be the primary revenue drivers for telcos moving forward and will warrant the purchase of end-to-end IP transport infrastructures — of which VoIP will be an inherent component. That said, the development and proliferation of IP Video services will drive VoIP deployments because it makes the economic model work for ILECs. Also, the availability and security of digital video content will play a significant role in the advancement of IP Video services which in turn will drive VoIP deployments.

Another area that I think needs to be watched very closely is the regulatory landscape. Policy makers must refrain from applying traditional telecoms regulation to IP-based data and voice communications. VoIP is not just another flavor of telephone service. It’s a new frontier in communications for individuals and businesses alike, and it requires forward-thinking regulatory approaches. If regulators subject this new technology to legacy telecom regulation, consumers and business users will miss out on the new services, increased choices and better prices that VoIP can deliver.

GG: What makes Pannaway’s services unique and how can a client benefit from using them?

MS: Today, Pannaway provides the only “facilities-based” transport solution for the delivery of “Triple Play” services. Unlike current VoIP offerings from companies such as Vonage and AT&T, the Pannaway solution has been designed to deliver advanced IP services using the incumbent carriers existing physical plant. This approach removes any issues surrounding Enhanced 911 and Lifeline power requirements allowing carriers to deliver IP-based services without requiring their customers to change the way they use their phones or televisions.

This transparent introduction of IP technologies significantly strengthens an ILEC’s position to roll out new revenue-generating services to subscribers. Deployment time is lessoned, price per port is reduced, and transport performance is substantial enough to support new and emerging applications.

GG: Describe your view of the future of the IP telephony industry.

MS: In the very near future, we will see a merging of traditional telephony features with Web-based technologies and the television. This convergence will introduce for the first time, a practical and widespread video telephone service. Also, users will have the ability to rent movies, make video calls to friends and family, retrieve voicemail and video mail, as well as send and receive traditional e-mail though their digital media entertainment system (formally known as the television).

Home telephony will become highly personalized incorporating many of the elements found on today’s cellular phones including distinctive ring tones, follow me technology, and personal directories. Additionally, I strongly believe that ‘toll calling’ will go away completely. The new telephony model will be much more like the Internet providing any-to-any connectivity and “all-you-can-eat” calling plans — regardless of geographic location.

ILECs are in a position to capitalize on and even drive these emerging trends today and at Pannaway, we will continue to build advanced IP features and performance capabilities that will enable them do just that.

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