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The April 26, 2004 Issue Provided by System Dynamics Inc.
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"Changing the World" -- Spring VON 2004

In case you've lost track of how quickly the telephony world has changed, let's take a short trip back in history:

  • At our first Voice on the Net (VON) conference in September 1997, we presented a talk called "IP Telephony Meets Cable TV" and laid out the opportunity for cable operators deploying cable modems to grow their businesses using IP telephony. More than six years have passed, and the concepts we introduced there are very much a part of today's reality.
  • In September 2000, we wrote an article called "End to end IP: How will the Telcos Survive?" -- see Part 1 and Part 2. Just before VON started this year, Standard & Poor's placed its long-term ratings for Verizon Communications on CreditWatch because the company is losing business to rival long-distance, wireless and cable firms. S&P has taken similar action with other telecom companies, including SBC, BellSouth, and Cingular Wireless LLC.

With that as backdrop, Jeff Pulver's opening talk for VON rang true. Jeff's message was that "we can change the world" with voice over IP (VoIP) and "nothing is impossible". In fact, the telecom world has been forever changed by VoIP. For example, with the ability for users to obtain a phone number that is independent of where they live, a British expat living in Hong Hong could buy a UK phone number and have their UK relatives call them in Hong Kong on a local number. Of course, Jeff has evidence you can change the world: he did so with the FCC's recent "Pulver decision".

Our observation from this year's VON is that we are in the third stage of VoIP. In stage one, it was limited to hobbyists and techies and addressed by the very early efforts of pioneering companies like VocalTec. In stage two, some companies used VoIP in their backbone to reduce transmission costs for internal phone calls; some other companies offered calls routed over VoIP to reduce end-user costs for international calls.

In the third (current) stage, businesses and consumers with broadband access can use VoIP as an alternative or complement to their traditional phone services. Consumers do so by subscribing to a service and installing an "analog terminal adapter" between their broadband modem and their standard analog phones.

Henry Sinnreich, holding a BroadVoice T-shirt while Grandstream's Bill Zhang gives thumbs up --> Click for larger pictureVonage was the first US example of such a company. Since Vonage's introduction, it has been joined by a number of other competitors and at VON still more threw their hats into the ring. Perhaps most notable of these was AT&T with their new CallVantage offering: AT&T is charging $39.95 per month (with an introductory offer of $19.95 for the first three months) for unlimited US calls, and provides a pretty user interface with additional "eFeatures". BroadVoice, one of the less-known newcomers, provides an unlimited $19.95 per month plan for US calls.

The fourth stage of VoIP is just in its infancy. In it, customers will use new SIP phones and will take advantage of a set of features that are not possible using today's analog phones and services which support only terminal adapters. Although some of these features are on the drawing boards, what Jeff challenged the audience to invent is tomorrow's phone, which is as easy to use and appealing as Apple's iPod. "We need an Apple to create the iPhone" he said.

Shockey, Sinnreich, Zhang & Jennings at Grandstream booth. All are involved in changing telephony. --> Click for larger pictureTo see what progress is being made toward VoIP's future, we visited with some of the exhibitors at VON. We report on only a few of them, since we divided our time between VON and FastNet Futures, which occurred simultaneously.


Grandstream

On the VON exhibit floor, we met with Bill Zhang, Director of Technical Operations at Grandstream Networks. In our article on last Spring's VON show, we wrote about Grandstream's "$75 SIP phones and MTAs". This year, both devices are on the market.

Grandstream HandyTone 486 --> Click for larger pictureGrandstream's newest analog telephone adaptor (ATA), the HandyTone 486 is an example of what cable operators call a "multimedia terminal adaptor" (MTA) and telephone companies call an "integrated access device" (IAD). These devices convert VoIP services from a broadband connection for use by conventional analog telephones and therefore provide a bridge between the old world of analog telephony and the new world of IP-based digital telephony. The second-generation 486 adds a router and DHCP/NAT services as well as a "PSTN life line port" for fallback, and has a suggested retail price of $85.

The BudgeTone-100 series IP phones are fully-featured SIP-based devices aimed at the advanced consumer market. These firmware-based telephones plug into an Ethernet network.

Grandstream's phones and ATAs support many voice codecs, and have recently added support for the iLBC low-bit-rate codec (see below).


Global IP Sound

We met with Global IP Sound at VON. GIPS announced their newest software product, a set of modules for developers of software applications for real-time communications over the Internet. These can be used separately, or as part of a software framework designed to handle all voice-related tasks for VoIP soft clients in PC or PDA environments.

Roar Hagen, CTO of Global IP Sound, with a Wi-Fi connected PDA, using their software --> Click for larger pictureGary Hermansen, President and CEO, and Roar Hagen, CTO and Co-Founder, gave us a demonstration of the new modules in operation on a standard PDA connected with Wi-Fi. We walked around (and outside) the show floor talking through a headset, the PDA, Wi-Fi and the Internet to the GIPS office in San Francisco.

The demo was based on GIPS' iPCM-wb wideband codec designed to provide "better than PSTN" quality while being very immune from packet delay or loss. Our impression was that the voice quality was very good -- considerably better than our cellphones and probably better than our regular phones.

GIPS also provides the iLBC low-bit-rate narrowband codec, specifically designed for Internet telephony and providing PSTN voice quality even with packet delay or loss. This codec is available on a royalty-free basis and has been submitted to the IETF for standardization.


Microsoft

John Starkweather and Balz Wyse of the Embedded Devices Group at Microsoft briefed us on VoIP support in the latest release of Windows CE. Windows CE is used in an increasing variety of devices, and the 5.0 release includes an extensive VoIP solution for these devices. CE has built-in support for SIP (to establish VoIP connections) and RTP (to move voice "data" between devices). 5.0 adds two more layers of support: a Telephony User Interface (TUI) and a VoIP Application Interface Layer (VAIL), all provided as source code.

The TUI provides a sample user interface with a set of core telephony features such as call dialing, holding and forwarding; and incoming call screening and missed call notification. Manufacturers and service providers can use the TUI as-is, or can customize it for a specific product.

VAIL provides a suite of components for call handling and logging. The VoIP Manager is the "engine" for VoIP, including SIP server registration, response to network events (such as playing ring tones on an incoming call) and handling caller ID and conferencing. Other components include speed dial, call logging and a repertoire of standardized codecs.

Picture of devices based on Microsoft WinCE 5.0 based VoIP --> Click for larger pictureMicrosoft has announced many partners for the CE 5.0 VoIP support, including chip companies such as Broadcom, Conexant and TI. At VON, they announced that Vonage was adopting CE 5.0 VoIP for a "soft phone".

( www.vonage.com ) ( www.usa.att.com/callvantage ) ( www.broadvoice.com ) ( www.grandstream.com ) ( www.globalipsound.com ) ( www.microsoft.com )