Beyond cheap minutes: Voice on the Net industry goes searching

During the past 12 months, much talk in the voice-over-IP market has revolved around efforts to get past the international arbitrage that has sustained the industry in its early stages.

At last week's Voice on the Net show in Atlanta, some new applications and enabling technologies made their long-awaited debut. At the same time, several operators announced intentions to deploy or add new IP-based voice and fax services.

Among the most significant was U S West's announcement that it has selected NetCentric's Fax-Storm Internet fax system for a series of new services beginning early next year. The RBOC previously resold IP fax services that rode on FaxNet's network.

"We think that if we want to be in this business, you have to be network-based," said Lily Sun, group manager of IP services for U S West.

Under the FaxNet architecture, U S West will offer services similar to its current offering. But it also will set up peering arrangements with other carriers using the same system, which will broaden its coverage area and reduce costs by letting the company use its own network.

"We designed the whole thing so that they can use their existing infrastructure," said John Fleming, vice president of marketing for NetCentric.

Not so subtly, several vendors also unveiled systems geared toward larger carriers who have yet to make big deployments. Nokia, which bought its way into the voice-over-IP market with the acquisition of Vienna Systems, announced enhancements to its systems that give service providers options beyond cheap long-distance minutes.

"We've seen toll arbitrage grow rapidly and commoditize even faster," said Dan MacDonald, vice president of marketing for Nokia Internet Communications. The company's new distributed call processing server fits into its new architecture, which will scale up to 120,000 gateway port connections.

Clarent also unveiled a new architecture designed to provide service to a large number of users and bring in intelligent network functionality. Under the company's open network environment, carriers can use a service creation tool to develop new applications. In addition, Clarent announced a partner program designed to bring in third-party application developers.

Several other vendors also teamed with outside developers, including Cisco Systems, which unveiled several partnerships for its New World Ecosystem and demonstrated gateway interoperability with Lucent Technologies' equipment. The objective is to bring in companies that have strength in application development, said Alec Henderson, manager of product marketing for Cisco. "There are several areas of functionality that we don't want to do ourselves."

Vendor partnerships are expected to produce many new applications that move the industry forward. However, a number of carriers at the show said the concept of cheap long-distance minutes will not disappear completely.

"We're watching classic disruption," said James Crowe, president and CEO of Level 3 Communications. "If the future belongs to a disaggregated model, what becomes of voice? While it's true that voice is perhaps half of the big flow on global networks, it remains over 90% of the dollars collected by our industry."

While praising the strides made by vendors in the IP voice market - particularly those developing soft switches - Crowe said more needs to be done to increase reliability. "If there's a problem with the soft switch model, it's that you have to overflow to the public network [when traffic increases beyond capacity]," he said.

The Voice on the Net show in Atlanta last week provided several vendors the opportunity to show what technology can do when combined with wireless platforms. While some announced new applications, others addressed those that are fast-approaching.

With its wireless IP local loop system, or WipLL, Marconi Communications is using the Internet's language to provide advanced single-platform integration of voice, data and multimedia transmissions.

"This is a new use of IP for the wireless world. We took a big advantage of what exists in the IP world and put it on a wireless channel," said Pinhas Romik, director of special projects for Marconi.

The system was designed for established network operators needing to enhance legacy systems and new operators wanting to offer integrated services.

However, Kevin Borders, vice president of marketing for Marconi, speculated that carriers could market the solutions as a second line.

The solution, which operates in the unlicensed 2.4 and 3.5 GHz bands in Europe, relies on frequency-hopping CDMA spread - spectrum radios, which can co-exist at the same radio base station. It also relies on an air protocol that supports bandwidth-on-demand and time-bounded services.

In other wireless IP news, John Hart, chief technical officer for 3Com, presented next generation personal digital assistants and LAN telephony integration via a technology demo of the IETF session initiation protocol. The company's solution for converging networks is to support multiple services across IP and the Web.

Third generation handsets will open a whole new set of applications, according to at least one other vendor. "With the [Wireless Application Protocol] stuff going on now, we think there are some really interesting possibilities," said Jon Fleming, vice president of marketing for NetCentric.