IP Interoperability: ITXC bids to become the Internet's first carrier's carrier

ITXC Corp., a company started with seed money from AT&T and VocalTec, unveiled a service last week that will let Internet telephony service providers and carriers provide IP telephony to users regardless of their equipment vendor choice.

For Internet telephony service providers and carriers, WWeXchange opens a significantly larger market by providing each access to the others' gateways and allowing them to accept calls from other providers, said Tom Evslin, chairman of ITXC. Additionally, ITXC plans to buy bulk capacity from gateway owners, letting any company provide IP telephony without owning facilities.

"Internet telephony is where telephony was 100 years ago," Evslin said. "[Users can] only reach where their service providers have gateways."

Under the current system, users calling from a PC to a phone establish a peer-to-peer link over the Internet with a gateway near the person being called. The gateway then bridges the call onto the local public network, which completes the call. Phone-to-phone users dial into a local gateway, which uses an interactive voice response system to prompt callers for the call's destination. The gateway then compresses the call into packets, which travel over the Internet to a second gateway where they are decompressed and reconstructed. The call is then routed over the local public network or PBX to the destination telephone.

With WWeXchange, scheduled for launch in February 1998, users will be able to dial a local access or 800 number and complete calls to anywhere, just as if they were using a prepaid debit card.

ITXC's role will be to take calls from the Internet to a gateway operated by an affiliated Internet telephony service provider in the destination city. The gateway then bridges the call to the local phone network. If there is no affiliated Internet telephony service provider with compatible equipment in the destination city, ITXC will complete the call using bulk minutes bought from interexchange carriers.

ITXC also will handle the settlement process with iPass, which provides roaming service between Internet service providers. Under the proposed model, the originating Internet telephony service provider will keep 40% of the customer revenue, with the remainder divided between ITXC and the receiving Internet telephony service provider.

ITXC has signed up several Internet telephony service providers, including Senshu Electric Co. and World Interactive Network.

Although it is initially supporting only VocalTec gateways, which have an 80% market share among Internet telephony service providers, ITXC said it would start a program to certify other vendors' equipment.

However, some already are balking at the prospect of working with a company so closely affiliated with VocalTec and AT&T.

"The market is huge, and there are too many companies out there that think they can dominate it," said James Shen, chief executive officer of NeTrue Communications, a gateway vendor that also operates a proprietary IP telephony network.

But ITXC is not bound to buy capacity from AT&T or any other carrier, said Mary Evslin, the company's director of marketing.