Voice over IP
From Hill2dot0
Voice over IP (VoIP) technologies use an IP-based packet switched network to carry voice or video traffic. The VoIP user can use the Internet to place and receive “telephone” calls. While this might appear as a neat trick for those of us with a real technical bent, it offers the potential for substantial cost savings over the existing global switched telephone network. In a packet switched network, resources are not dedicated to a specific user but rather are shared by all users. This shared use of resources leads to a less expensive way to carry user traffic. However, until recently, packet switched networks did not possess the routing/switching speeds necessary to transport delay-sensitive traffic (e.g., voice). Major advances have been made in the last several years in increasing the speed of integrated circuits (IC) that make modern switches possible. We see direct evidence of this in the improved speed of the PCs we use every day. Additionally, the speed of the transport links has grown exponentially over the past several years. Networks that once relied exclusively on T-1s operating at 1.544 Mbps can now use Synchronous Optical Network (SONET) at 10 Gbps.
The protocol stack for voice over IP is shown on the visual. The digitized voice is loaded into the Real-time Transport Protocol (RTP), which is encapsulated in User Datagram Protocol (UDP), Internet Protocol (IP), and the network interface protocols. The use of UDP provides the low latency required by voice and RTP provides sequencing with less overhead than TCP.
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What’s All the Fuss About?
Put yourself in the place of a business person responsible for voice communications services for your company. You know that your average per minute cost of international voice calls is over $0.75. A sales representative calls and tells you that he/she can offer international voice services for only $0.14 per minute. It is easy to imagine that you might be interested simply for the cost savings. Furthermore, you’re told that the infrastructure that enables the savings is the Internet. Given the Internet’s established importance to your business, the Internet’s ability to handle voice makes the service that much more important.
Consider the residential user who is paying $.05 a minute for domestic long distance and seeing a monthly long distance bills of over $80. When the local cable company offers them unlimited local and long distance for $49.95 a month, the choice is clear.
At the heart of the cost savings are two facts. First, Internet-based phone calls are currently not subject to certain government-mandated fees that are imposed on traditional voice calls. Second, the technology behind the network portion of the Internet uses shared resources rather than dedicated resources like the traditional voice network. Service providers can use the Network Layer technology of the Internet (i.e., IP) to build private networks, and then offer clients information transport services that include voice, video, and data, and offer these services at a reasonable price.
Worldwide coverage, reduced cost, and transport for any type of user information. “Voice over IP” is a part of the expanding world of the Internet.
Voice over IP and IP Telephony
The marketplace often uses the concepts of voice over IP (VoIP) and IP Telephony (IPT) interchangeably. Both have the same look to the network; analog voice is digitized and packetized. However, VoIP is typically associated only with transport, while IPT brings the telephony services to the desktop. VoIP uses an IP-based network to move packets containing digitally encoded, often compressed voice information. IPT adds intelligence, call signaling, and feature functionality, which enables telephony services to be delivered to a user regardless of the device used to transmit the voice. This provides IPT with the value-added ability to enhance services brought to a user. The end result is that new applications are often part of IPT solutions, which yield improved operational efficiencies and effectiveness.
How those IP packets move from point A to point B can be a function of a movement mechanism. IP can be transported in Ethernet frames, frame relay frames, or ATM cells. We can move them in a private internal network or use a carrier’s backbone and PVCs to cross a semi-public cloud. The point is that IPT is about features and intelligence to the desktop. It’s about empowering users to be able to get information from a device previously limited to one function—voice.
Where Are the Benefits?
The current interest in IP Telephony is generated by the cost savings and improved business processes. Most implementations of voice over IP (VoIP) have claimed savings of 50 to 75 percent compared to the cost of comparable traditional voice networks. Those savings are achieved converging voice and data networks and thereby reducing management and administrative costs such as adds, moves, and changes. Transmission costs can be reduced through better facilities utilization and by striking at the most expensive part of almost any phone user’s bill: the long distance charges. Whether cost savings come from using an alternative long distance provider’s packet voice network, or privately deploying and using a series of voice/data gateways, there are at least three areas in which voice over IP saves money.
First, long distance phone calls in the U.S. are subject to federally mandated access charges imposed by the local exchange carriers (LEC) on the long distance carriers (i.e., the interexchange carrier, or IEC) to help pay the cost of providing and maintaining the local network. Since these fees can comprise up to 40 percent of the cost of a long distance call, their elimination would make calls far less expensive. Currently, Federal Communications Commission (FCC) regulations do not explicitly include packet mode traffic among the types of traffic that incur such charges, thereby leaving room for the packet-oriented IEC to claim that their trafficæwhile containing the same voice traffic that a regular IEC pays charges foræmust be carried for free. This, in turn, allows the packet-oriented IEC to charge far lower prices for voice carriage than the traditional IEC.
Even without the savings due to access charge savings, there are two other ways in which VoIP can save money. The improvement over the last thirty years in voice encoding techniques requires 8 kbps or less of bandwidth to carry the conversation that used to require 64 kbps. As an example of the benefits of such encoding schemes, consider the T-1 carrier. The T-1 carrier (often used as a trunk facility between switches) usually provides 24 voice channels of 64 kbps each. If 8 kbps channels are used, the 1.536 Mbps capacity could support 192 conversations. While this type of compression technology is available to the traditional IECs, the difficulty of mating differing standards of encoding at provider boundaries has so far restricted its use in the public switched telephone network (PSTN). However, VoIP providers don’t have these limitations.
While the amount of change that such a move will necessitate has so far made a rapid transition impossible, there is a degree of consolidation of network links, switching and routing equipment, and staff that will occur if data and voice begin to travel over the same infrastructure. Perhaps of equal or greater value to the corporation are improvements in business processes that can be achieved with IP telephony. As a direct outcome of the converged network, businesses can enjoy improved employee productivity, improved customer relationship management (CRM), and a myriad of new converged applications. For instance, unified messaging is now an integral part of most IP telephony systems that can be accessed through the user's browser interface.
Who Is Buying?
A BCR January 2005 article “The PBX Market” identifies the customers adopting VoIP into their corporate infrastructure. Not surprisingly, VoIP has been widely accepted by large companies (those with large employee populations and/or multiple locations) and companies that typically keep IT projects in-house. These companies have built do-it-yourself VoIP networks, typically from a single vendor (e.g., Cisco Systems, 3Com, Avaya), and have gone through the process of technological trials and application support.
In the vertical space, public education has been an early adopter—since many of the systems have been subsidized through the Federal E-Rate Program. This hidden treasure for schools and libraries was passed into law as part of the Telecommunications Act of 1996 and helps schools and libraries get improved telecommunications access. Other vertical industries that have adopted VoIP are those with large corporate networks and IT staffs. These include the financial services (e.g., banks and insurance) and professional services (e.g., law offices).
The verticals being cautious with VoIP are doing so because of security concerns. VoIP is still considered non-secure. Such security-conscience industries include health care and government.
Benefits of a VoIP Solution
A beneficial new technology adds to the functionality of the corporation while not adversely affecting the bottom line. VoIP meets these criteria by providing a lower total cost of ownership (TCO), supporting a non-disruptive deployment, and adding functions not possible in non-converged systems.
VoIP reduces the TCO for companies by providing a single converged network for voice and data applications. This reduces both the operational and capital expenses associated with the network by using a single wiring plan and a single administrative organization. This network also has fewer hardware requirements than those that are deployed separately.
VoIP deployment allows a smooth migration, as it can be deployed as needed. This non-disruptive, incremental deployment capability means that no hot swap of technology is necessary from the old system to the new system. The two systems can coexist until the legacy system is no longer desired. Remote offices and/or corporate centers can be added into the fold of VoIP as the business requires.
The corporate functions of VoIP and its associated protocol SIP are still being defined, but the promises so far support better collaboration among workers and less time spent communicating and contacting coworkers.
Regulatory Issues Still Loom
Although it appears IP telephony has broad support in the regulatory arena, issues still loom. The FCC defines IPT as an information service rather than a transport service so it is not taxable (as are regular phone and data services). Service providers are taking advantage of this loop hole and offering very low rates or free IP-to-IP calling for their customers (e.g., Skype and Global Crossing). How long these deals will last is based in part on the FCC. If IPT remains untaxed, the services will remain low cost. The rationale behind the FCC’s decision is that protecting the technology from taxation will promote enhancements in the technology. This approach seems to be working so far, but can IPT compare to circuit-switched technologies if it were taxed similarly?
While the FCC is taking a hands-off approach to IPT as far as taxing is concerned, other federal agencies are forcing IPT to comply with the same regulations as circuit-switched phone service, namely E911 and Commission on Accreditation for Law Enforcement Agencies (CALEA). The FBI is requiring that IPT service providers offer the same call monitoring services as circuit-switched phone service providers. The same is true for E911 support. Both of these requirements mean that IPT service providers must add functions to the network to handle these requirements, adding cost and complexity to an otherwise simple architecture.
The regulatory future of IPT remains uncertain, as more and more users change from circuit- to packet-switched services. The tax revenue associated with these lines and the programs supported by these taxes are in jeopardy.
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