The Jeff Pulver Blog: E911/VoIP: Death of the Broadband Parasite in the USA?:

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May 13, 2005

E911/VoIP: Death of the Broadband Parasite in the USA?:

These days "voice" really is just another "application" (at least technologically if not regulatorily) and the face of the worldwide communications marketplace is much different than just a few years ago. In fact, it was back in May, 2003, where I first spoke about the Rise of the Broadband Parasites and its power to transform the ways in which we communicate and dramatically increase the value and capabilities of the network.

It was also way back in the Summer of 2003, when one of my more (then seemingly) paranoid friends warned me that there were people in DC who would start to come forward and do everything in their collective power to prevent the success of the "Broadband Parasites" and the so-called "free-riders." (As I've indicated in numerous previous blog entries, VoIP ASPs should not be considered "free-riders". Unlike the POTS resellers, the VoIP ASPs are dramatically increasingly the capabilities and value of telecom networks for consumers, for carriers and for vendors.) In any case, my paranoid friends went so far as to say that end-to-end IP would never be allowed to freely happen. Frankly, I dismissed their concerns as paranoid delusions. Why would anyone want to stifle the improvements that Moore's Law and IP-technology would bring? I, instead, believed that end-to-end IP was inevitable and that, while the face of the communications industry was going to be changed forever, it would be understood that there would be a list of winners and losers and those who ignored technology innovations would be cast as the losers . . . or so I thought.

My friend's conspiracy theory highlighted three parallel activities: numbering; lawful intercept (CALEA); and emergency response (9-1-1). My friend suggested that, at the calculated moment, certain powerful forces from inside-the-Beltway would take action and put an incredible amount of pressure on government and industry to apply legacy thinking to kill innovative technology. I believe that, so far, we have, more or less, adequately kept at bay both the numbering and lawful intercept issues (although I am convinced these issues wait in the wings to further devastate IP-based communications advances). The E911 for VoIP issue has become the most obvious, very sore touch point and rallying cry to do in IP-based innovators under the guise of public safety. And, frankly, if they don't kill us with the E911 red herring bullet, the second and third bullets (numbering and lawful intercept concerns) wait in the chamber of their gun.

In fact, now that E911 for VoIP is on the agenda for the next FCC meeting, and if reports are true and the FCC will mandate that all two-way connected Voice over Broadband service providers in the US need to also provide E911 services (even for nomadic services), without making a parallel and equal demand on the LECs to ensure local access to the PSAPs and an explicit prohibition against port blocking, such a ruling could have the one-sided effect of removing the unaffiliated Voice over Broadband service providers from the marketplace and so will begin the era of the "death of the local VoBB service provider." While I guess, in some ways, this may be good for the incumbent who is seeing increasing price pressure on a daily basis, it is the consumer who ends up losing, and losing big. Once the competition goes away, prices will bounce back up and service offerings will devolve.

Instead of focusing on the US marketplace, my friends, the voice over broadband entrepreneurs, may instead decide to focus their business activities in countries that have a more forward looking IP-based communications strategy.

Strange as how it sounds, even Canada looks to be a more fertile ground for continued technology innovation than the US, if E911 becomes mandated for VoIP, including nomadic VoIP offerings. If VoIP was the first great driver of broadband, I fear that America will drop even further down the ranks of the countries in broadband penetration and that will further sink the US economy for many decades to come.

Unless something was totally misunderstood with regards to the FCC immediate intentions, 2005 may go down in history as the time we saw both the rise and fall of the unaffiliated VoIP service provider.

Then again, the pending FCC rulemaking may finally be the shot in the arm the VoIP entrepreneurs need to come forward with communication services that are not using VoIP as simple replacement or substitute services, but rather use IP technology to begat the launch of new suites of communication services -- something much truer to the vision of what an IP-enabled platform promises and not just copycat products or services. At least one can dream. I, however, fear that the FCC E911 Order will be too broad and suck within its regulatory black hole many of the current and here-to-for unimagined innovative services that do not intend to serve as mere replacement services for traditional voice telephony.

. . . and, boy, do we live in interesting times.

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Posted by jeff on May 13, 2005 12:02 PM | Permalink

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Comments

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Chris Scanlon
http://www.cheapbroadbandaccess.com

Posted by: Chris Scanlon at January 25, 2006 12:43 PM

I suspect there are good number of folks doing the same as me right now ... with various service providers.

Posted by: programlar.org at January 18, 2006 02:26 PM

Jeff, when there is a will there is a way, and in free market capitalism, necessity is the mother of invention.
Enough cliches?
The FCC was right to make this requirerment of VOIP carriers. As a VOIP infrastructure provider we understand the huge responsibilty that goes with taking on the challenges and fortunes of the American consumer. We need reliable e911 service at our fingerstips and frankly, how could a provider sleep well knowing their service removed e911 access or provided a "sloppy-second" work around.
It works, or people suffer.
Here at Affinity VOIP Telecom, we recognized the needs and urgencies of this problem. The solution, (redundant, reliable connections with every LEC and CLEC in the nation AND the right number to every emergency operator)was cost prohibitive to us and our friends in the industry.
So Affinity VOIP Telecom took on the singular challenge and huge expense to get the e911 service direct from Intrado (www.intrado.com)and bring to VOIP providers at an affordable rate.
It's possible for smaller providers with big dreams to stay in the game. And we are working to keep that opportunity alive.

John Tobin
Reseller Channel Sales
Affinity VOIP Telecom
jtobin@affinityvoiptelecom.com
503-268-0238

Posted by: John Tobin at June 22, 2005 12:46 PM

Jeff,

In your list of “bullets” for Voip, you left one out. It’s called the ADA (Americans with Disabilities Act) compliance bullet.

The ADA basically requires all new construction be designed to support certain features for the handicapped. Lever faucets, door handles, and wheelchair ramps are examples.

In telecom, it has to do with the ability to carry traffic from TTY machines used by the hearing impaired. Some of these devices are now the size of a PDA and can work by acoustic coupling to a phone handset, which is greatly increasing their popularity.

However, if the TTY user is faced with an IP telephone, he is unable to place a call in most cases.

By the way, E911 centers are required to support TTY modems at every answering position. Hearing impaired people have the same need to call 911 as everyone else.

This issue already came up with cell phones. The original analog systems would easily carry the TTY modem tones. Digital systems were then installed that would not support TTY and the FCC mandated they be upgraded (at considerable expense to the wireless carriers). It would have been much cheaper to do it right up front.

Like it or not, ADA is the law in the US. VOIP providers who do not support it do so at their own risk. Just as with e911, the slowly turning wheels of government will get around to ADA/telecom enforcement.

To me, the curious thing about VOIP is that it is a step backwards in so many ways.

Consider the contrast: My next TV set will be HD (High Definition) and have a superior picture over my SD (Standard Definition) set. My next sound system will have more channels, a subwoofer, and better sound. Yet many people I speak with over VOIP suffer inferior performance when compared to the system they are replacing, all in the name of “cheap”. But, you don't find that mentioned in the sales literature.

Perhaps the FCC or industry should define SFT as “Standard Fidelity Telephony” with G.711 PCM based fidelity, delay, and modem capability. Then the VOIP providers can define LFT “Low Fidelity Telephony” as their low priced offering. All “features” aside, the basic mission here is voice carriage and the VOIP products are generally inferior.

A properly informed consumer can then make an informed decision balancing performance against cost, just as he does when choosing between a Mercedes and a Ford.

Posted by: jeff box at June 6, 2005 06:25 PM

How will this effect services like FWD, fwdOUT (the service formerly know as B***ster), and asterisk users who want to provide free calls within their local area to friends in other places? As far as CALEA goes, this just solidifies the need for end to end encryption more than ever! Trying to impliment something like CALEA for VOIP could potentially open up entire networks to government snooping. is this what people really want? VOIP is a different animal and must be cared for in a different way!
No more red herring, it tastes like garbage!

Shouldn't those services who wish to provide e911 be getting full cooperation from the telcos in the first place instead of needing excess legislation or an FCC ruling? Since many providers have 911 in some form this has been a waste of time. didn't the FCC rule that voip would not be regulated? (still smells like fish, must be the herring!)

Posted by: Voip User at May 21, 2005 01:03 AM

I'm not sure that Canada is any more attractive for VoIP. On April 5 of this year, the CRTC announced a decision requiring all VoIP providers (even those providing only a "foreign exchange" service) to include 911 service.

http://www.crtc.gc.ca/ENG/NEWS/RELEASES/2005/r050404.htm

Additionally, the CRTC have recently announced a decision to control the prices of VoIP offerings by the major (incumbent) carriers.

http://www.crtc.gc.ca/ENG/NEWS/RELEASES/2005/r050512.htm

It is not at all clear how free (and service-limited) providers will be enabled to meet these requirements. Nor is it clear how foreign-based carriers will be affected.

Sorry about the formatting; paragraph breaks are getting eaten ... :(

Posted by: Paul at May 18, 2005 07:14 PM

You fail to see the point. You can not replace just part of a service that consumers are familiar and accustomed too. For many people E911 is part of normal phone service. In addition, it is a farce to provide less of a service and call your service cheaper and equal.

The RBOCs (Baby Bells), CLEC and ILEC (Incumbents but not RBOCs) have be told by the government that they must provide E911 and other service. These services have costs to the service companies and the communities that provide these services. For you to demand a “free ride” for VoIP providers is unrealistic.

And all of this is ranting is unnecessary at this time. Wholesale providers like Level 3 offer Local IP origination with E911, 411, 711, DA Listing and MSAG (Master Street Address Giude for E911) to VoIP service providers. The prices that these wholesale providers are offering this service for is well within the limits of acceptable cost to provide a quality product.

In truth the providers that are using VoIP or any new transport method must meet the accepted standard. This is a sign of a product that steps out from the gray market shadows and into the light of the real world. Thanks to Vonage this new method of voice service delivery is in the light of the real world.

Welcome to the real world!

Posted by: Joe at May 18, 2005 04:52 PM

Hi Jeff,

Do you have any kind of information on what's going on with VoIP in Russia and if so, what's your oppinion?

What would you actually think of visiting Russia, say, in November?

Posted by: Pavel Rebrov at May 14, 2005 04:22 AM

This is like mandating some sort of religion on people. It's good for us, but why legalize it. Can't it be a service that people pay for, or choose to select a provider based on the 911 service. Rules have gone too far. Let the market dictate the service.

Posted by: Rick at May 13, 2005 04:49 PM

I just started Earthlink/Bright House Networks with specific intent of using that boadband to then start using Vonage, which I just ordered today. Since it is often a cost savings to switch from, for example, Bell South DSL and CompleteChoice and Unlimited LD to Earthlink/Vonage, I suspect there are good number of folks doing the same as me right now ... with various service providers.

Posted by: S Thorne at May 13, 2005 01:53 PM

Where does this "If VoIP was the first great driver of broadband" line come from? Something like 3% of US broadband subscribers have VoIP; I've never seen any market research that shows any number of those 3% bought their broadband access so they could get VoIP.

I currently pay about $65 a month (including taxes and fees) for POTS with unlimited US LD and a fistful of CCS/CLASS features I never use; I could replace that with cable modem and Vonage service for $70 a month (not including taxes and fees). VoIP as currently offered is attractive for customers who already have broadband; I don't see how it's driving broadband.

Posted by: DG Lewis at May 13, 2005 01:32 PM

Hi Jeff,

Great insight i'm sure we are going to start facing these issues in the UK soon. Do you think Skype will suffer from legislative interference?

Posted by: Charlie Barker at May 13, 2005 01:28 PM