[Lac] The VoIP Insurrection

[Diego Saravia]

justo me llego este articulo sobre el sistema telefonico y el diseño end to end.


(Article text pasted below.  -- Seth)

-------- Original Message --------
Subject: Slashdotted Berninger Article
Date: Mon, 20 Sep 2004 22:18:03 -0400
From: Ben Teitelbaum <ben at internet2.edu>
To: VoIP Working Group <wg-voip at internet2.edu>

http://www.gigaom.com/2004/09/the_voice_over_i.php

Quite good.  One amazing tidbit...

   One attempt by AT&T to improve voice quality in the early 90's
illustrates the PSTN's handicap. Marketing studies indicated
customers might prefer a low end (i.e. bass) audio boost. Sony
implemented this with a "MegaBass" switch on their Walkman
product line. AT&T wanted to do the same thing in hopes of
competing with MCI and Sprint on voice quality rather than price.
The consumer Vice-President at AT&T, Joseph Nacchio, pushed
through an $800 million project to get the job done. AT&T could
not simply install a switch on telephones analogous to the Sony's
solution. AT&T had to alter the signal processing incorporated in
echo cancellers throughout the network. These network wide
modifications produced irate customers not more customers. The
higher sound levels caused operators distress and amplified
existing network quality problems. A long period with lots of
effort followed to unwind the TrueVoice implementation. Joseph
Nacchio famously left to launch Qwest.

$800 million to extend POTS's 300-3300 Hz range to 100-3300 Hz
(and to normalize the gain on local and long distance calls)?! 
Holy cow.

Sometimes we forget how grateful we should all be for the
end-to-end architecture of IP.

-- ben

---

> http://www.gigaom.com/2004/09/the_voice_over_i.php

The Voice Over IP Insurrection

Daniel Berninger (http://www.danielberninger.com/), an old
friend, a seriously smart guy and VoIP guru of sorts, and more
recently senior analyst, for Tier1 Research, has been a great man
to bounce ideas off. He and I have chatted about many things, and
each time I come away learning something new. So last week he
argued, "*in the battle between Bellheads and Netheads, we're all
Netheads now*." Could not agree more. Here is his long missive on
the *VoIP insurrection*, the best and most definitive essay you
will ever read on this technology, where it is headed and why it
is important. This is the second of my guest columns series where
I bring the experts who know a thing or two about their
respective areas of expertise.

*What just happened?*

The $3 billion dollar budget at Bell Laboratories did not include
a single project addressing the use of data networks to transport
voice when VocalTec Communications released InternetPhone in
February 1995. As of 2004, every project at the post-divestiture
AT&T Labs and Lucent Technologies Bell Labs reflects the reality
of voice over Internet Protocol. Every major incumbent carrier,
and the largest cable television providers, in the United States
has announced a VoIP program.  And even as some upstart carriers
have used VoIP to lower telephony prices dramatically, even more
radical innovators threaten to lower the cost of a phone call to
zero -- to make it free.

The VoIP insurrection over the last decade marks a milestone in
communication history no less dramatic than the arrival of the
telephone in 1876. We know data networks and packetized voice
will displace the long standing pre-1995 world rooted in
Alexander Graham Bell's invention. It remains uncertain whether
telecom's incumbent carriers and equipment makers will continue
to dominate or even survive as the information technology
industry absorbs voice as a simple application of the Internet.

The roots of the VoIP insurrection trace back to four
synchronistic events in 1968. The Federal Communications
Commission (FCC) ruled MCI could compete with AT&T using
microwave transport on the Chicago to St. Louis route. The same
year, the FCC's Carterfone decision forced AT&T to allow
customers to attach non-Western Electric equipment, such as new
telephones, and modems, to the telephone network. The Department
of Defense's Advanced Research Project Agency issued a contract
to Bolt Beranek and Newman for a precursor to the Internet. And
in July 1968, Andrew Grove and Gordon Moore founded Intel.
Innovation in the communication sector remained the proprietary
right of AT&T for most the 20th century, but events in 1968
breached the barriers that kept the telecom and information
technology industries apart.   For the first two-thirds of the
20th century, AT&T had manned Berlin Wall separating
telecommunications and computing, but eventually, these two
enormous technology tracks would be unified.

Two entrepreneurs barely out of their teens, Lior Haramaty and
Alon Cohen, founded VocalTec Communications in 1993 based on the
promise of packet voice technology they observed as members of
the Israel Defense Force. Most military command and control used
the highly survivable TCP/IP distributed data networks since the
1980's. The challenge of transporting voice over the networks
arose as an imperative to support certain very sensitive voice
commands like "drop the bomb", but the idea of commercializing
packet voice did not occur to anyone until the arrival of Lior
and Alon. How could slicing voice into 50 millisecond packets
improve the telephone business? The tradition bound telephone
industry types or "bellheads" spent their time before 1995
improving the Public Switch Telephone Network (PSTN) not
replacing it.

Advances in communication from writing and paper to the printing
press, telegraph, and telephone shape human progress. Some might
have viewed VoIP as an interesting toy in 1995, but no one
presently doubts it will dominate the communication future. The
economies of scale associated with growing customer awareness and
competition will produce a Moores Law like virtuous cycle of
communication innovation.

The coming communication renaissance will make the 20th century
telecom industry seem as quaint as the Pony Express by
comparison, but what happens to the existing trillion dollar
global telecom industry? The near term stakes effect millions of
telecom jobs and billions of investment dollars not to mention
the fact communication serves as a basic input for the economy
much like oil. Can companies like Verizon and Lucent reinvent
themselves sufficiently to survive the VoIP insurrection? Keep in
mind the telecom incumbents remain gatekeepers for access to the
Internet and regulatory uncertainly continues to weigh against
investment in VoIP. Verizon presently serves as many telephone
lines, collects as much in revenues, and enjoys twice the profits
as the pre-breakup AT&T colossus. Let the games begin!

IP on everything

The forces putting the Internet in a position to displace the
PSTN have nothing to do with voice as an application. The cycle
of innovation that serves as an engine for the information
technology industry makes all of the elements needed to enable
VoIP faster and cheaper. The forces reducing the price of
processing power exist independent of VoIP, but as a computation
intensive real-time application VoIP benefits from the
persistence of Moore's Law. The number of people with access to
the Internet and, in particular, broadband access continues grow
with or without VoIP, but all communication applications benefit
from network effects. The Internet backbone latency declines
absent specific requirements from VoIP. For example, a connection
between New York and Hong Kong that might have suffered 500ms
round trip delay in 1996 experiences less than 150ms delay today.
The emergence of Wi-Fi and other unlicensed wireless developments
associated with IEEE 802 working groups moving VoIP into the
mobile realm represent yet another example of this dynamic.

No one originally expected the Internet to make the PSTN
obsolete, but they did seek to avoid the vertical integration
making the PSTN inflexible. The people shaping the Internet
viewed themselves as users not service providers, where as the
PSTN existed to serve the interests of the telephone company not
users. The PSTN works as one integrated system synchronized
everywhere to the same clock. All of elements that make up the
Internet work independent of each other. The coordination happens
through an exchange of messages. This difference sets the
Internet on a pace of innovation that allowed the rudimentary
capacity and performance available in 1970 to improve at a rapid
rate unleashing the present Darwinian survival of the fittest
process. On going performance improvements continue to give data
networks the capacity to efficiently address an ever broader
range of applications.

The arrival of VoIP in 1995 corresponded with the arrival of a PC
(i.e. Intel 486 processor) capable of managing the encode and
decode processing in real-time. VocalTec offered packet voice
solutions starting in 1994, but the need for special purpose
hardware to support real-time two-way communication slowed
deployment. Dialup Internet penetration reached nearly 20% in the
United States in 1995 and interest in VoIP accelerated in 2003 as
broadband penetration rates approached 20%. Interconnection with
the PSTN remains the largest cost for VoIP service providers, but
the need for PSTN interconnection falls as broadband penetration
increases. It only took ten years after the arrival of the
commercial Internet for most people to get an email address.  The
same outcome seems likely with regard to VoIP telephone numbers.
In any case, the challenge of producing a low cost VoIP version
of traditional telephone call seems largely solved. The most
interesting developments remain to come as VoIP enables
capabilities that go beyond the plain old telephone call. With
the price of the traditional telephone call going to zero, there
will be enormous incentives to offer more value.

VoIP turns telecom into a simple extension of consumer
electronics business, because Internet applications exist without
metering for time and location. Users of VoIP need not worry
about the destination or duration of their calls any more than
someone sending an email or browsing the web. People do not pay
each time they play a CD, and communications seems headed in the
same direction. Microsoft X-Box Player already offers VoIP for
participants in multi-player games. Metering and billing calls
can easily cost more than delivering the service itself, and the
flat rate access billing model eliminates the need for solving
inter-carrier compensation.

The decoupling that produces rapid improvements in connectivity
and processing platforms also facilitates software development.
People working on VoIP applications don't need to change the
nature of the Internet with each new application, and everyone
with a computer becomes a potential member of the Internet
development team. Applications of the Internet from email to the
web to instant messaging and VoIP without exception have come
from the tinkering of entrepreneurs rather than an industrial
research center backed by market research.

The competition between VoIP and the PSTN shapes up much like
highways versus railroads. The operator of the PSTN and railroad
own their transport network. VoIP companies and car companies do
not. Railroads and the PSTN support a single type of usage.
Highways and the Internet allow all user types to commingle. The
emergence of highways empowered people to control many more
aspects of their transportation needs rather than depend on the
schedules and railroad routes available. The Internet
accomplishes the same thing for communications. Automobiles and
highways gave rise to an entirely separate industry and provided
the basis for new types of commerce. The Internet offers the same
promise, and corporate chieftains with traditional telecom assets
find themselves in the same position as the railroad barons when
Henry Ford got rolling.

III. Disconnect

Alexander Graham Bell lasted only three years in the telephone
business. His financial backers took over American Bell not long
after 1876 in a manner and for reasons not unknown to
entrepreneurs today. Lawyers and financiers shaped
telecommunications far more than engineers for most of the next
century as various forms of monopoly dominated. The
accomplishments of Bell Laboratories does not change the reality
of industry stagnation. No area of technology progressed slower
than the telephone business in the 20th century as comparisons
with automobiles, aviation, or healthcare reveals. Innovations
all revolved around obtaining efficiencies from the perspective
of the telephone company. Telephone service changed very little
from the perspective of end users.

The collection of data networks that make up the Internet exist
entirely separately from the PSTN. The public switched telephone
network refers to the network addressed dialing by telephone
numbers. Home users may access the Internet by dialing telephone
numbers, but none of the Internet hosts with permanent IP
addresses depend on telephone numbers for connectivity. The links
may share conduits. The equipment may get housed in the same
buildings or share maintenance staff, but the PSTN infrastructure
remains entirely separate from Internet infrastructure. One could
turn off all of the equipment supporting the PSTN without
effecting the Internet. The PSTN and Internet come together only
through special gateways, because they transport messages by
entirely incompatible means.

The amazing durability of plain old telephone service (POTS) does
not arise from the fact it represents some kind of wonder
technology. POTS persisted for business reasons associated with
monopolization of telecom and not technology or sound quality.
Humans can perceive sound from 50 Hz to 20,000 Hz. POTS captures
sound between 300 and 3300 Hz. The copper analog loop associated
with the Bell System in the US and monopolies in other countries
add various other impairments to this already limited
representation of sound. POTS remained dominant until the arrival
of VoIP, because of the high barriers to entry facing insurgents.

The local telephone loop still uses analog technology introduced
in the 1940's. Touch Tone phones arrived in 1963. Engineers at
Bell Labs understood growing demand required offering new
services, but the nature of the PSTN made it largely impossible.
Imagine the challenge of software makers in a computer industry
stuck with something like the Intel 286 processor for 40 years.
The PSTN as a communication platform does not improve in
performance, whereas efforts to create demand for computers gets
facilitated by Moores Law. The PSTN supports only three kilohertz
sound, so everything including data needs to get converted to
voice (e.g. the modem squeal). The complexity of the software
controlling the large network based circuit switches utilized by
Verizon, AT&T, and others make them unsuitable for implementing
new services. Each new service requires re-inventing the
telephone network, but the revenue prospects for the new services
don't justify the expense. The PSTN's resistance to innovation
meant demand grew no faster than the larger economy or 3-4% per
year during the last 50 years.

One attempt by AT&T to improve voice quality in the early 90's
illustrates the PSTN's handicap. Marketing studies indicated
customers might prefer a low end (i.e. bass) audio boost. Sony
implemented this with a "MegaBass" switch on their Walkman
product line. AT&T wanted to do the same thing in hopes of
competing with MCI and Sprint on voice quality rather than price.
The consumer Vice-President at AT&T, Joseph Nacchio, pushed
through an $800 million project to get the job done. AT&T could
not simply install a switch on telephones analogous to the Sony's
solution. AT&T had to alter the signal processing incorporated in
echo cancellers throughout the network. These network wide
modifications produced irate customers not more customers. The
higher sound levels caused operators distress and amplified
existing network quality problems. A long period with lots of
effort followed to unwind the TrueVoice implementation. Joseph
Nacchio famously left to launch Qwest.

The arrival of VoIP in 1995 generated not a rush to hire
engineers but rather a rush to hire lawyers. The Americas
Competitive Telecom Association (ACTA) submitted a petition
encouraging the FCC to regulate VoIP software makers like
telephone companies. The move prompted Jeff Pulver to launch the
Voice on the Net (VON) Coalition with Daniel Berninger's help in
1996. More recently, the FCC issued a notice of proposed
rulemaking addressing VoIP in March 2004 with the goal of
bringing the Internet and PSTN together under a single rational
regulatory regime. No one expects the regulatory issues to get
resolved soon as the FCC faces a challenge similar to a railroad
regulator addressing the emergence of highways.

The telephone incumbents also control a key input needed by the
VoIP insurgents - connectivity. It does not represent an accident
that there remains a significant disconnect between the capacity
of connectivity within the premise associated with ethernet local
area networks and the capacity in the middle of the Internet
associated with fiber deployments and improvements in the
capacity of fiber. The most capacity and greatest performance
improvements exist where there exists the most competition. The
fact that local access remains a bottleneck or completely absent
follows from the weakness or absence of competition for so called
first mile connectivity. The phenomena gives rise to the
broadband deployment debate, but the disconnect depends less on
technology than the absence of market forces compelling providers
to improve performance and reduce their prices. The growing list
of access technologies offers some hope (e.g. copper, coax,
wireless, fiber, power lines, satellite), but it remains unknown
whether there will exist sufficient competition between these
media to reduce the access bottleneck.

The Pony Express service failed prematurely in 1861 when railroad
interests convinced the United Sates government to withhold a
promised contract leading its entrepreneurial backers into
bankruptcy. Consensus on the technology merit of VoIP does not
assure its future. The telecom incumbents like the prospects for
VoIP to make their operations more efficient, but they will fight
mightily the potential for VoIP to alter the telecom industry
balance of power. Campaigns toward national and local regulatory
interventions can certainly alter the pace of change. The losses
suffered on investments motivated by the Telecom Act of 1996
leave decision makers in the capital markets twice cautious.  The
combination of regulatory and technology openings associated with
VoIP seem a powerful force for change as in the case of  MCI
leveraging microwave technology and regulatory openings to set up
the break up of AT&T in the 70's.
------- End of Forwarded Message -------


-- 
Diego Saravia 
dsa at unsa.edu.ar