Read this article then read this article before moving on.
Done? Excellent.
The first article is mostly focused on creating some noise for SBC now that AT&T are soon to be absorbed but then article 2 takes focus on one element of the conversation, the fact that IP traffic is IP traffic and so VoIP should be free and this is an unenforcable proposition, and alludes to some of the conclusions that I made in my past post.
The SBC CEO's comments mirror the situation in the Yukon exactly. NorthwestTel has put a bucket of money into burying bits of fibre to wire up the Territory. Now a company (Vonage perhaps) with a MUCH smaller investment creates a service that eats away at the revenues that NWTel needs to pay for the burying. The situation is much more complex (as always) given the nature of subsidies and would require another article that I will write some day when I understand the history and nuances mre completely, but suffice to say NorthwestTel/YTG do not allow Vonage (or anyone) to provide an 867 area code termination point.
What we are seeing is the collision of the companies that have put the (rather) expensive physical infrastructure into the dirt and the companies that are creating the (fairly) cheap software that will drive consumers (like me) to utilize more of the dark fibre that was buried in the first place. Both companies profit by basic Keysian principles correct?!? Right...
My reading of the situation is that the infrastructure companies (be it Telus, Bell, NWTel, etc) were caught flat footed by consumer adoption of VoIP and the erosion of the lucrative long distance market. Telco's were already using it on the backend, for massive savings, but didn't think that a consumer version would be so readily accepted/available/adopted. They should have recognized this groundswell and made a consumer bundle available immediately. For added profit. Lesson one learned.
From that initial error they are recovering quickly. Make no mistake that VoIP will soon be bundled with your DSL line just as the cable operators (Shaw/Rogers) are quickly making plans to eliminate phone jacks from your house. Now, the beauty of VoIP for cable operators is that VoIP is a pure value add proposition; they are not attacking their main source of revenue : television content. In fact, I know that some friends of mine are currently cable modem + VoIP households with no ill effects except for lower utility bills.
The conflicts in VoIP are arising because of a three way collision of :
- the cost to put in place the infrastructure
- the dynamic of "everything is data" and so does not require a proprietary connection (ie. I don't need a phone jack to talk on the phone)
- and the rapidly falling price of connectivity
The telcos will sue, legislate, and then adapt ... or perish. Business evolution at its finest.
A hint for a coming article : what happens when Wi-Fi moves into the WiMax range and how this will affect everyone.
