spectr17
09-23-2002, 01:33 AM
09/13/2002
Ma Bell to get some competition from Pa Net Phone Service
By Brian Bergstein, Associated Press
NEW YORK — Scott Rosenthal of Wellington, Fla., cut his monthly home phone bill by $150 but makes just as many calls as always, for work and pleasure. Aby Alexander's 30-person Internet company in Cambridge, Mass., is saving $900 now that he and his colleagues can call New York and London without paying long-distance rates. Both are using a new service that performs a technological sleight of hand: It translates phone conversations into data bits that get whisked over the Internet or private networks rather than through the traditional phone system.
The technology has been around for several years, making serious inroads at the switchboards of corporations with high-speed networks. It also powers inexpensive international calling cards sold at convenience stores.
But few consumers have replaced their home service with Internet calling because the system had a reputation for sounding like two cans and a string.
Boosters of the technology now say they've worked out the kinks.
Over the next year, cable TV providers and other companies will increasingly rely on the technology to offer consumers sharply reduced phone bills and new services such as online phone-message management.
Some analysts believe that if the technology takes off — which would require overcoming its unsexy moniker, Voice over Internet Protocol, or VoIP — it will replace the public telephone network that first took shape 125 years ago.
In the meantime, it could add to the pressure on the nation's large phone companies — which are also testing the technology and using it to route some calls — and keep long-distance rates down.
"It's a rare opportunity to fundamentally change and alter a business landscape," said Jeffrey Citron, founder of Vonage, an Edison, N.J.-based VoIP company that says it has 2,000 customers, including Rosenthal and Alexander.
In the traditional phone system, calls are converted to electronic signals that traverse an elaborate network of switches and wires in a dedicated circuit that lasts the duration of a conversation. Regional carriers that own switches along the network take a cut of each call.
In the Internet-based system, calls are converted into packets of data for transmission, just like e-mails and Web pages.
Given priority status to ensure they arrive in real time, the voice packets speed across IP networks to a "gateway" near the destination. There, the packets can be reassembled into a regular analog call. If both callers are using broadband Internet connections, the packets may avoid the public network altogether.
Until recently, parts of Internet calls were often delayed or garbled by network traffic jams. But a newly invented network protocol handles calls more efficiently.
"The technology has improved within the last year to the point where it's pretty much ready for prime time," said Jon Arnold, a telecom specialist at the consulting firm Frost & Sullivan.
Vonage charges $40 a month for unlimited local and long-distance calling and includes services like caller ID, call waiting and voice mail. In comparison, the average American household's monthly phone bills total $73, according to the Federal Communications Commission.
Subscribers need a broadband connection and must plug their regular phones into a Vonage-supplied adapter that converts calls into data. Users can pick phone numbers with distant area codes, meaning a retiree in Arizona can get a Chicago area code so his relatives back home can dial him for the price of a local call.
Backers of Internet calling believe consumers will quickly get hooked by new services not possible with regular phones. For example, your phone could have a Web page that would let you easily specify that calls from your boss should get routed straight to voice mail while a ring from the baby sitter should be forwarded to your cell phone.
"I think you'll start to use your PC or cell phone as the device to do all your call management and set up instant video conferencing," said Rich Barry, vice president of marketing for StarVox, a California-based startup that programs software for VoIP systems.
There are still some snags.
Being off the regular phone network means calling 911 is impossible for now. Vonage advises customers to put direct numbers for their local fire and police stations on speed dial.
Calls are not entirely encrypted, meaning hackers might be able to snare and reconstruct parts of conversations, though the risk appears extremely low. In fact, Vonage has yet to work out a way to let law enforcement agencies tap the calls of suspected criminals.
Citron hopes to steal hundreds of thousands of phone customers in the next year.
But Vonage appears more likely to become a partner than a foe of the big telecom companies. Vonage already is working with a regional phone carrier and a cable TV provider to supply the software and network support the big guys need to enter the game.
Internet calling pioneer Net2Phone, which is controlled by Newark, N.J., long-distance provider IDT, is taking a similar route. Two years ago it scrapped a Vonage-like plan to target consumers directly and now is handling the technology for cable companies such as Liberty Media, which owns 20% of Net2Phone.
Net2Phone spokeswoman Sarah Hofstetter believes cable companies will be the long-term winners from VoIP because they can easily "bundle" Internet phone service with TV and Internet access at an attractive price.
Not surprisingly, the telecom industry is eyeing the technology carefully.
Walter B. McCormick Jr., head of the United States Telecom Association, said policy-makers need to watch how VoIP develops and make sure it is regulated just as old-school telecom companies are.
Ma Bell to get some competition from Pa Net Phone Service
By Brian Bergstein, Associated Press
NEW YORK — Scott Rosenthal of Wellington, Fla., cut his monthly home phone bill by $150 but makes just as many calls as always, for work and pleasure. Aby Alexander's 30-person Internet company in Cambridge, Mass., is saving $900 now that he and his colleagues can call New York and London without paying long-distance rates. Both are using a new service that performs a technological sleight of hand: It translates phone conversations into data bits that get whisked over the Internet or private networks rather than through the traditional phone system.
The technology has been around for several years, making serious inroads at the switchboards of corporations with high-speed networks. It also powers inexpensive international calling cards sold at convenience stores.
But few consumers have replaced their home service with Internet calling because the system had a reputation for sounding like two cans and a string.
Boosters of the technology now say they've worked out the kinks.
Over the next year, cable TV providers and other companies will increasingly rely on the technology to offer consumers sharply reduced phone bills and new services such as online phone-message management.
Some analysts believe that if the technology takes off — which would require overcoming its unsexy moniker, Voice over Internet Protocol, or VoIP — it will replace the public telephone network that first took shape 125 years ago.
In the meantime, it could add to the pressure on the nation's large phone companies — which are also testing the technology and using it to route some calls — and keep long-distance rates down.
"It's a rare opportunity to fundamentally change and alter a business landscape," said Jeffrey Citron, founder of Vonage, an Edison, N.J.-based VoIP company that says it has 2,000 customers, including Rosenthal and Alexander.
In the traditional phone system, calls are converted to electronic signals that traverse an elaborate network of switches and wires in a dedicated circuit that lasts the duration of a conversation. Regional carriers that own switches along the network take a cut of each call.
In the Internet-based system, calls are converted into packets of data for transmission, just like e-mails and Web pages.
Given priority status to ensure they arrive in real time, the voice packets speed across IP networks to a "gateway" near the destination. There, the packets can be reassembled into a regular analog call. If both callers are using broadband Internet connections, the packets may avoid the public network altogether.
Until recently, parts of Internet calls were often delayed or garbled by network traffic jams. But a newly invented network protocol handles calls more efficiently.
"The technology has improved within the last year to the point where it's pretty much ready for prime time," said Jon Arnold, a telecom specialist at the consulting firm Frost & Sullivan.
Vonage charges $40 a month for unlimited local and long-distance calling and includes services like caller ID, call waiting and voice mail. In comparison, the average American household's monthly phone bills total $73, according to the Federal Communications Commission.
Subscribers need a broadband connection and must plug their regular phones into a Vonage-supplied adapter that converts calls into data. Users can pick phone numbers with distant area codes, meaning a retiree in Arizona can get a Chicago area code so his relatives back home can dial him for the price of a local call.
Backers of Internet calling believe consumers will quickly get hooked by new services not possible with regular phones. For example, your phone could have a Web page that would let you easily specify that calls from your boss should get routed straight to voice mail while a ring from the baby sitter should be forwarded to your cell phone.
"I think you'll start to use your PC or cell phone as the device to do all your call management and set up instant video conferencing," said Rich Barry, vice president of marketing for StarVox, a California-based startup that programs software for VoIP systems.
There are still some snags.
Being off the regular phone network means calling 911 is impossible for now. Vonage advises customers to put direct numbers for their local fire and police stations on speed dial.
Calls are not entirely encrypted, meaning hackers might be able to snare and reconstruct parts of conversations, though the risk appears extremely low. In fact, Vonage has yet to work out a way to let law enforcement agencies tap the calls of suspected criminals.
Citron hopes to steal hundreds of thousands of phone customers in the next year.
But Vonage appears more likely to become a partner than a foe of the big telecom companies. Vonage already is working with a regional phone carrier and a cable TV provider to supply the software and network support the big guys need to enter the game.
Internet calling pioneer Net2Phone, which is controlled by Newark, N.J., long-distance provider IDT, is taking a similar route. Two years ago it scrapped a Vonage-like plan to target consumers directly and now is handling the technology for cable companies such as Liberty Media, which owns 20% of Net2Phone.
Net2Phone spokeswoman Sarah Hofstetter believes cable companies will be the long-term winners from VoIP because they can easily "bundle" Internet phone service with TV and Internet access at an attractive price.
Not surprisingly, the telecom industry is eyeing the technology carefully.
Walter B. McCormick Jr., head of the United States Telecom Association, said policy-makers need to watch how VoIP develops and make sure it is regulated just as old-school telecom companies are.