Disruptive Telephony

From the "Duh! What were they thinking?" desk, the big news up there in the northeastern part of the US is that our major local landline provider, Fairpoint Communications, has filed for Chapter 11 bankruptcy protection today. Last year, Fairpoint paid $2.4 billion for Verizon's landline business in Maine, New Hampshire and Vermont and formally took over the network earlier this year, with all sorts of ensuing service challenges which have been well-documented.

As FierceTelecom points out, this bankruptcy has been expected for quite some time now. Last week there was much publicity up in these parts about Fairpoint working with its unions and banks to try to avoid the formal filing... but obviously today's filing indicates that they couldn't pull the proverbial rabbit out of the hat. This morning, Fairpoint issued a news release and set up a web site about their restructuring:

http://www.fprestructuring.com/

Now, I should mention that I am a Fairpoint customer and do have a landline from them - I've also not personally had any customer service issues with their service. I am also not at all surprised.

I thought Fairpoint's acquisition of Verizon's landline business last year was an exceedingly dumb idea then - and I still think that today.

I mean... you don't need to be a rocket scientist or industry analyst to figure out that landlines are a dying business. Here's part of the overview from the most recent "Wireless Substitution" report from the US National Center for Health Statistics (my emphasis added):

More than one of every five American homes (20.2%) had only wireless telephones (also known as cellular telephones, cell phones, or mobile phones) during the second half of 2008, an increase of 2.7 percentage points since the first half of 2008. This is the largest 6-month increase observed since NHIS began collecting data on wireless-only households in 2003. In addition, one of every seven American homes (14.5%) received all or almost all calls on wireless telephones, despite having a landline telephone in the home.

I personally expect that trend to continue and if anything to accelerate as we collectively continue to choose mobile devices - and also as the cable companies and other players out there continue to offer compelling alternatives to the traditional landline. (Hmmm... and gee, do you think the cable companies up here aren't going to seize this opportunity to court Fairpoint customers?) And while I kept our landline for several reasons, I don't necessarily expect that I'll need it for a long time.

Sure... perhaps Fairpoint thought it could make money off the Internet access side of the house... I mean, buying your way into being the incumbent utility ought to be a good thing, right? But then again, the cable companies are right in there... as are the satellite folks and many others offering Internet access...

All I can say is kudos to whomever it was within Verizon that thought up this strategy of selling off their dying businesses to other companies... and let's see if they succeed in doing it again with Frontier Communications.

In the meantime, we will see what kind of chaos this filing stirs up today up here in both terms of business and political maneuverings...

It's also interesting to contemplate: what would happen if such a major utility like the "local phone company" were to completely fail?

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For those out there interested in how telephony - and all communications - is being disrupted, the place to be this week is very definitely eComm Europe in Amsterdam. It's definitely a gathering of the "tribe" of people who are on out there defining the bleeding edge of the communications space. Great speakers, great schedule... it should be a great event!

Sadly, a schedule conflict prevented my attendance, but as I wrote about on the Voxeo Talks blog, Voxeo will have a presence there in the form of multiple speakers as well as a booth. More info can be found on the Voxeo event page at:

http://blogs.voxeo.com/events/ecomm-europe/

If you are at eComm Europe, please do say hello to RJ Auburn or Jay Phillips... or stop by our booth. Also, look for the fun giveaway in the eComm bag. ;-)

And if, like me, you can't get there... you can follow along in the eComm tweet stream and see info posted up on the eComm blog. It should be a great show, so I'm definitely looking forward to hearing and reading more about what goes on there.

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It's been a busy month for the folks in the Skype For SIP project. First, back on September 9, Skype announced ShoreTel interoperability. Then last week on September 17, Skype announced interop with the open source SIPFoundry sipXecs product.

Today, though, is Skype's biggest announcement yet - they are announcing the certification of Cisco's Unified Communications 500 Series for Small Business as interoperable with Skype For SIP.

Beyond simply the interop, what's perhaps more interesting is to note the direct Cisco involvement with this news release (through a quote). Looking at the overall industry, it's interesting to see Cisco and Skype connecting. I admit that I haven't studied Cisco's UC500 product much at all, although per the news release it sounds like they are doing some interesting things with it:

The Cisco Unified Communications 500 Series platform is part of Cisco’s Smart Business Communications System which continues to expand having just added a new set of IP phones with high definition audio, a unified threat management device as well as support for third party application integration, including products from healthcare, automotive and insurance industries.

Congrats to both Skype and Cisco on this announcement. I expect we'll be seeing more of these announcements in the weeks and months ahead as Skype continues to aggressively court partners. The Skype For SIP offering does provide some useful functionality for on-premise IP-PBX systems:

• Ability to receive inbound calls from Skype users
• Ability to receive inbound calls from PSTN users through "online numbers" (formerly SkypeIn)
• Ability to place outbound calls to PSTN users

The Online Number functionality is particularly interesting as you can easily set up any series of numbers in other parts of the world that ring back into your IP-PBX. Sure, you can do that with any other SIP trunking provider, too, but Skype makes it incredibly easy to provision those numbers - and for a very low annual cost, too. Making your IP-PBX accessible to all the Skype users, too, is quite powerful.

Now if only you could make outbound calls to Skype users... (NOT possible with Skype For SIP, but possible with Skype For Asterisk).

Anyway, congrats again to Skype and Cisco on this announcement.

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Fascinating chart out of Silicon Alley Insider today showing the incredible growth Comcast has had in terms of IP phone subscribers versus that of Vonage:

I doubt the chart is a huge surprise for anyone following the industry, but it still does make for an interesting graphic. Despite all the advertising money that Vonage can throw out there, Comcast and the other cable providers have the inherent advantage that they can easily offer powerful "triple-play bundles" of cable TV, Internet access and phone service.

Comcast is no longer my provider (Time-Warner services Keene, NH, where I live.), but when I lived in Burlington, VT, we had Comcast for Internet access and Verizon for phone (and we didn't have anyone for TV, since we don't watch it). The offers that Comcast kept sending us, though, encouraging us to switch, were quite compelling. The amount I paid for Internet access would have been lower if I had either phone or TV with Comcast, and even lower if I had all three.

If we actually watched TV and therefore wanted cable TV, the economics of the "triple-play" would be very hard to beat... so it's no surprise at all to me to see this chart. I would expect we'll continue to see the growth of one and the continued stagnation of the other.

What would be more interesting to me would be to see the subscriber growth of Comcast versus the other MVNOs and the DSL providers. Fascinating times we live in...

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Technorati Tags: comcast, vonage, voip, consumervoip, ip telephony, telephony, telecommunications

By way of a tweet from Matt Roberts, a friend from my Mitel days, I learned of this video interview with Sir Terry Matthews on Canada's Business News Network:

Sir Terry Matthews speaks to BNN about the state of the industry in Canada, why he loves home-grown startups and what he sees as the next big thing in technology.

If you've not heard him before, the interview is a good view into the passion, enthusiasm and charisma that keeps him starting up companies all over the place. The report says he's now up to 80 companies or so that he's started up... and I'm not surprised.

His overall message, though, is what he has been consistent saying for many years now... we are in an age where incredible broadband capacity is coming online - as that happens, what will we do to make use of all that bandwidth?

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Technorati Tags: terry matthews, canada

This week out at the Emerging Communications Conference in San Francisco, I gave a 10-minute talk called "The Park Bench Manifesto: Why We Want To Kill Off The PSTN". In the talk, I mentioned that the text would be available here soon... And it will be.

In the meantime though, I have put up both the video and the 54-slide deck over on <a href="http://blogs.Voxeo.com/ett/">blogs.voxeo.com/ett/</a>

More soon..... (need to fly home...)

With a simple "I've changed jobs" blog post (way shorter than any blog post I've ever written), Martin Geddes let us all know that he was now joining BT. The post over on Telco 2.0 goes into more about Martin's move and his reasons why he sees BT's future as bright...

Besides having one of the coolest blog names ("Telepocalypse"), Martin's a great writer and thinking in our space. We've only met a couple of times, but I've always respected the work he's done and enjoyed his writing. I wish him all the best at BT and look forward to what may evolve there!

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Technorati Tags: martingeddes, bt

Over on the eComm blog, Lee Dryburgh put up an interesting podcast on "Matt Ranney on Thinking Beyond VoIP and A. Bell Telephony". It's well worth a listen for those of you interested in the larger picture of what we are building for a communications infrastructure...

P.S. And if you are interested in that topic, you really should consider attending eComm March 3-5...

Technorati Tags: ecomm, communication, telephony, rebelvox, voip

There is a fundamental problem with the "VoIP is dead" debate continuing to rage across the VoIP/communications part of the blogosphere (see Alec Saunders part 1 and part 2, Jon Arnold, Andy Abramson, Ken Camp, Jeff Pulver part 1 and part 2, Om Malik, Shidan Gouran, Ted Wallingford, Dameon Welch-Abernathy (PhoneBoy), Rich Tehrani and a zillion others...)

Aswath Rao and Luca Filigheddu came closest to the mark in their posts. The fundamental problem with this entire debate is simply this:

Define "VoIP"?

As I discussed in an Emerging Tech Talk video podcast I put up this morning, there are a range of definitions you could give to "VoIP", including, but not limited to, the following:

1. The underlying infrastructure, a.k.a. the "plumbing" - the mechanisms, protocols, etc. that are used for the transport of voice/video/etc. over IP. Things like SIP, H.323, RTP, various codecs, etc.
   
   
2. Consumer "PSTN line replacement" services - Offerings like those of Vonage and so many others where the basic idea is that you can get cheaper telephone charges by going over the Internet and getting rid of your local landline. Also called "pure play" VoIP by some or "VoIP arbitrage" by others.
   
   
3. Computer-to-computer/softphone offerings, often coming from the IM space - Skype sets the bar here, but there's a host of other players as well, including Gizmo, GoogleTalk, FWD, and many others. Some of these came from existing Instant Messaging services that simply added voice.
   
   
4. Enterprise IP-PBX/"Unified Communications" solutions - Communications systems used by enterprises, large and small - what has traditionally been called the "PBX" but that term is increasingly meaningless given the range of options now being provided.
   
   
5. The *entire* vision of rich communication over IP - The whole picture... everything over IP... voice, video, IM, presence, file/data sharing... the whole rich communication experience.

Each and every one of these is referred to as "VoIP" by some segment of our industry. (And there's even more... I did have someone once reply to me that "VoIP" was the pre-paid calling cards that you can buy in convenience stores, etc. (And in truth, they usually do get their cheap rates by using VoIP for transport somewhere in there.))

The point is that we need to be a bit more precise in what we call "VoIP" before we can argue about whether it is alive or not.

From my point-of-view, the life and death of these different definitions of "VoIP" varies:

1. The underlying infrastructure - Doing extremely well... in fact, so well, that it's fading into the background and just being part of our underlying network infrastructure, both in the fixed and mobile environments. (Which also argues that some of the VoIP-infrastructure-specific products/services are no longer quite as necessary.)
   
   
2. Consumer "PSTN line replacement" services - Great for cable companies; not so good for pure-plays - Looked at Vonage's stock price lately? They and so many of the other companies whose only real selling point was "get cheaper phone calls with us" are certainly struggling or dying. Why? The cable companies, for one, are cleaning up in this space with their "triple-play" bundling of voice with Internet access and television. The pure-play companies may be cheaper on voice but the cable packages may be far more compelling. Add in the "unlimited calling" mobile phone plans we have here in North America, plus the softphone players like Skype plus some of the emerging cloud/hosted offerings... and all-in-all it's not a pretty picture for Vonage and friends. (And this is really the VoIP "industry" to which Alec was referring.)
   
   
3. Computer-to-computer/softphone offerings - Very alive - Skype is flirting with 15 million simultaneous online users and also reporting decent income, Gizmo is rolling out a Flash-based softphone to remove the need for a client, TringMe is providing widgets to various folks... and a whole range of others are growing. (While some players are shrinking here, too, of course.)
   
   
4. Enterprise IP-PBX/"Unified Communications" solutions - Very alive - Basically every vendor supplying communications systems to enterprises are now doing so over IP. No one is selling traditional TDM PBXs anymore. Players in this space include the traditional telephony players like Nortel, Avaya, Siemens, Mitel, Alcatel-Lucent, along with newer entrants like the dominant Cisco, ShoreTel, Digium/Asterisk and then even newer entrants like Microsoft OCS and IBM Sametime.
   
   
5. The *entire* vision of rich communication over IP - VERY alive! - In fact, I'd say that the next few years will be one of the most fascinating years in this space. We're at this amazing intersection of insane amounts of local bandwidth and computing power, increasingly ubiquitous powerful mobile devices, and incredible power out "in the cloud". All around us we are building the massive IP communications interconnect. It's happening. At a glacial pace in some areas and at a crazy pace in others. We're layering on applications and services. We're making them available through simple APIs and mashups. We're all collectively doing some pretty amazing things out there. It's a great time to be in this space!

So how do you define VoIP?

If you think of "VoIP" as my #2, the "cheap telephony consumer services", then sure, if you don't consider the cable companies then than sector isn't doing too well. If you define VoIP as one of the other definitions here, well, then in my view it is very much alive.

What do you think? How do you define "VoIP"?

P.S. If you'd like to join a number of us to discuss this topic, Sheryl Breuker and Ken Camp are hosting a conference call tonight at 9pm US Eastern / 6pm US Pacific. Join us... it should be fun. :-)

Technorati Tags: communications, telcom, telecom, telecommunications, telephony, unified communications, voice, voice applications, voip

My friend and fellow VoIP blogger Jon Arnold (who interviewed me not too long ago) has a new home for his blog:

http://www.ipcom-insights.com/blog/jon/

As Jon explains in a post, he had been blogging at the same location off of Pulver.com since 2005 but recently found that the server was no longer online.  He is neither able to post to the server nor are all of his older articles online.  This was perhaps inevitable with the continuing changes within "the assets formerly owned by VON / Pulvermedia", but Jon had hung on at that site for as long as he could.

So now he's got a new home and is trying to get the word out to people who used to subscribe to him over there.  If you linked to Jon from a "blog roll" or other list of blog sites, he would definitely appreciate you changing your link.

And if you haven't followed Jon in the past, I'd encourage you to check out his writing... Jon has been in the telecom industry a good while and writes a lot about the service provider space. Being in Toronto, he also frequently provides a Canadian perspective on larger telecom issues - and also clues us outside of Canada into telecom-related happenings within Canada.

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