After a 13-decade run, telephony as a separate industry will cease to exist within the next 15 years. Bell patented the telephone in 1876. Since telegraphy predated telephony by about 30 years, in a sense, data networking predated voice. But just like the telegraph, telephony required a specific physical plant comprised primarily of wires and poles. Telephone companies had to acquire rights-of-way. People (manual switchboard operators) handled call routing. Eventually, the single-call-per-wire network was replaced by today’s time-division multiplexed (TDM) network. But TDM is still telephony-specific, so we still need telephone companies. But not for too much longer.

      Today, the TDM network is being replaced by packet-based (primarily IP) broadband-access that gives businesses and consumers relatively high-speed telecom-non-specific access to the Internet. Incumbent carriers still use traditional TDM telephony on top of the digital-subscriber line through line-sharing technologies. But maintaining the TDM network is putting the incumbents at a cost disadvantage. Moreover, VoIP is typically much more feature-rich than a TDM phone, and the cost of maintaining the TDM network in some cases exceeds the cost of installing new IP telephony infrastructure.

     With broadband “pipes” connecting subscribers to a converged network, voice becomes just another application. Yes, it’s an application that stresses the IP network in ways that data applications, such as HTTP and file transfer, do not, but it’s still just another application. And, without a telephony-specific infrastructure we don’t need telcos; we need broadband-access providers.

     Now, the telcos will tell you that the access network and the IP networks behind it really is telephony specific. They have a quality of service that supports telephony. They have built-in billing, and other features needed by a telco, such as application-level routing. But as the robustness of the public network improves, the audio quality of Vonage and Skype improves, and it’s already pretty good. Moreover, the telcos know it. That’s why we’re already seeing attempts to block competitive VoIP by some carriers.

     You can count on the incumbents, and even the competitive carriers, to do what they can to erect barriers to services offered by independent providers. Remember the IN—the Intelligent Network? It was supposed to enable third-party value-adding service providers to easily connect with the PSTN. Never really happened. Now comes IP Multimedia Subsystem (IMS), which holds the promise of separating the provision of services from the supporting network. That’s good. But it also embeds the service core deep within the telco’s network. That’s bad.

     The incumbent-centric Alliance for Telecommunications Industry Solutions (ATIS), which is defining the “Next-Generation Network (NGN) Framework” for North American carriers, deleted the characterization of the NGN, “Unrestricted access by users to different service providers,” which was in an earlier draft, from section 1.1 of its document, “Part I: NGN Definitions, Requirements, and Architecture”. This speaks volumes about their intent. Yes, the document mentions third-party providers, but so did the IN documents.

     However, it’s not a private party everywhere. Take Austria, the first country where ENUM was available for commercial services. ENUM is a standard that maps global telephone numbers (E.164 numbers) to SIP addresses. So, if you register your telephone number with an ENUM domain, any call to that number will be sent to the SIP addresses you have registered. Then, the Austrian regulators (RTR) went one better. They created a special value-adding ENUM service exchange, 780. With 780 registration, you don’t begin with a telephone number. Instead, registration gets you the number, which begins with 43 780. Once you receive the call you can do what you wish, including providing valuable services, even including voice.

     In 2006 the US Congress will likely rewrite the laws governing telecom regulation. The Telecom Reform Act of 1996 needs to be replaced, but with what? If telephony is becoming an application on the Internet, a so-called information service, the incumbent telcos will be challenged by the Internet crowd unless the ILECs can keep them out, and you can bet the telcos will put up a fight. The fur will surely fly since the stakes are huge. After all, we’re talking about the future of the Internet. Will it remain the platform for freewheeling entrepreneurism, including the voice arena? Or, will it follow the low-innovation path that has characterized telephony for the last 129 years?

     If you believe that dollars buy votes, bet on the telcos. According to Business Week, The incumbent telcos and the major cablecos “invested” $3-million in congressional candidates in 2005 through October 31, while the Internet companies, such as Yahoo! and e-Bay, have contributed less than $1,000,000. A late December article in the Atlanta Journal-Constitution reported that BellSouth had “entertained” at least 80 US congressmen and aides through October 2005. And if you’re not cynical enough to believe that funding congressional campaigns and buying swank dinners can affect legislation, consider that some states have passed laws prohibiting municipalities from offering WiFi to its citizens. Now, Pete Sessions (R-Texas) has proposed Federal legislation banning municipal wireless networks. Expect the battle to be waged as Congress rewrites the Telecommunications Act of 1966.

     OK, what’s the answer?

     We must separate access and services, not just in different “planes”, but as different businesses. To do so requires that offering access services be both profitable and competitive. And we’ll probably need more than competition between DSL/FTTP, cable, wireless, and broadband over powerline. Why not multi-tenant fiber in the access network? Why not private ownership of access? Why not ENUM with only enough restrictions and safeguards to make it fair and unabused?

     But the one thing we should do, if nothing else, is pay attention to what Congress does this year.

     

     

Respectfully, Mike Coffee CEO, Commetrex