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March 21, 2005

Broadband Providers WON’T Win the VoIP Wars by Playing Dirty

Robert X. Cringely wrote the Best days of Voice-over-IP Telephone Service May Already have Passed.  He is afraid that cable companies and traditional telcos and others who own IP networks may be able to legally advantage their own VoIP packets so that services from independents like Vonage and Skype will be effectively disadvantaged.  Then we will all be forced to buy VoIP from our broadband providers.  Fortunately, he’s wrong.

It’s not that the broadband providers wouldn’t like to do exactly what Cringely fears.  He is probably right that some of them are planning it.  Fortunately for us VoIP users, it isn’t going to work,  Let me explain.

Six months or so I appeared on a Capitol Hill panel and was seated between a representative from a very large RBOC and a representative from a very large cableco.  Both of them explained to the House members and staffers present that they, the RBOC and the cableco, would be able to offer much better VoIP than the independents because they own their own networks and manage them etc.  etc.  Each of them nodded smugly in agreement as the other spoke.

“OK,” says I.  “Mr. RBOC, you’re saying that you can provide good VoIP within your own network and that no one can do that over the public Internet.”

“That’s right,” he said.  “As long as the calls are within our network, we can assure high quality.”

I asked Mr. Cableco the same question and he gave me the same answer.  I did unkindly point out to him that his company connected its different city networks by using other network providers and the public Internet.

“So,” I said to both of them, “how are your subscribers gonna talk to his subscribers and vice versa.”  And, while they thought about that, I piled on a little.  “Since neither of you owns the whole country let alone the whole world, are you going to limit calling to on-net?  Are you saying that no one should use the VoIP services you’re announcing unless they just want to make local calls which are already available on an unlimited basis almost everywhere?  Sounds to me like those independent VoIP services which are already dealing with quality across multiple networks are going to have an advantage over any service which depends on owning the network, given that statistically a huge proportion of long-distance calls are going to traverse several networks.”

The fact is that voice calling, like most Internet services, is a cross-network service.  That’s one of the things that makes the Internet what it is – you don’t have to worry about  who is on what network and whether they’re on the same network you’re on.  So those who own a network – even a big one – can’t take advantage of that network ownership to differentiate their higher-valued service.  Imagine how long an ISP would last who wouldn’t provide good quality access to Amazon or Google because they’re not on-net (unless that ISP is a local monopoly).

This isn’t to say that there aren’t ISPs which are VoIP-friendly and ISPs which aren’t.  If your local loop that connects you to your ISP is bad, your VoIP will be bad whether it is offered by that ISP or a third party.  If your ISP’s local network isn’t well-connected to the tier one ISPs who make up the Internet backbone, you’ll get bad VoIP as well as slow page pops whenever you go off-net.  And bad VoIP is definitely harder to live with.

Usually, where there is a VoIP problem, it is on the local loop.  Fortunately, users can control the priority that VoIP gets on their local loop connection from the ISP.  Usually we don’t have to but we can. So there is probably no legal way that an ISP can meaningfully advantage its own brand of VoIP on the local loop.

Even if ISPs go ahead and give priority to their own VoIP packets on their own networks and assuming that this is legal (which it probably is), VoIP packets won’t soak up enough bandwidth at high priority to significantly degrade the VoIP packets which aren’t prioritized (This is Cringely’s great fear).  VoIP is not bandwidth intensive compared to other Internet applications. Even when everyone is on VoIP - 2010 at the latest, VoIP packets will be an almost insignificant part of total backbone traffic.

A few ISPs – usually rural monopolies – have blocked all VoIP to protect their traditional telephone revenue.  That IS technically possible.  Fortunately, The FCC has moved quickly to stop that.  The RBOCs won’t block all VoIP even if the regulators let them do that because it just means that the cable companies will get everyone’s Internet access business.  The cablecos are offering their own VoIP – that’s fine – but their VoIP isn’t going to win if it doesn’t work for a subscriber of Comcast to call a subscriber of Time Warner – so on-net solutions aren’t going to work for them.  Similarly, as the RBOCs try to keep their subscribers by switching them to their own VoIP, they’ll have to support cross-network calling just as they do today for phone calls or they won’t have a service.

I predict that some smart ISPs will advertise how VoIP-ready they are (meaning ready for all VoIP, 3d party or their own).  I would pay a premium to have an access loop which is good for VoIP and a backbone which is well-connected to support it.  I don’t use satellite access even in rural Vermont because the laws of physics make it impossible to provide high-quality VoIP when a signal has to travel from earth to a high satellite and back.  You can see how VoIP-ready your ISP is by using the free Java applet at www.testyourvoip.com.

Good support for VoIP will advantage some ISPs.  But my prediction is that network ownership will not give an unfair advantage to VoIP from your local ISP.  If anything kills Vonage, it’ll be how bad their customer service has become, not discrimination by access providers. I also blogged about growing pains at Vonage and about compelling VoIP features.

Thanks to my friend David Zahn who emailed me about the Cringely article and Slashdot’s lengthy thread on it, some of it very good, some not.

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