Just as the Post Office has not disappeared or become an anachronism, even for simple letter mail, VSPs serve a purpose. The Post Office charges advertisers to send you junk mail, so the amount of junk they can send is limited by their budget.

I think it is halarious that magic jack can take a cheezy looking kids site and rack 9000 users a day, lol , I bet those conglomerate CEO ’s are crapping thier pants, lol ( Dont sell out magic jack )

sandrajones25

The VoIP/TDM Routes Marketplace

BUT, to say that there is no business for a Skype or Vonage or other “VoIP Service Provider” (VSP) is incorrect. In a perfect world we would all register our addresses/numbers in public ENUM and plug our SIP (or other) phones into the internet and merrily make all calls for free. Assuming that this process of registering and connecting were so simple that my grandmother could do it, there would still be the tragedy of the commons. Economically speaking, VSPs introduce a small amount of friction into the network. This friction prevents the tragedy by imposing costs on everyone including those who would abuse the network (as the shepherds abused the commons).

The completely free model would email-ify VoIP. Your phone would ring a thousand times a day with offers for things you don’t care about just as your inbox is filled with such offers. People would ring your phone claiming to be your bank (verified by CallerID) asking for your account details just as you get such email.

Just as the Post Office has not disappeared or become an anachronism, even for simple letter mail, VSPs serve a purpose. The Post Office charges advertisers to send you junk mail, so the amount of junk they can send is limited by their budget.

Certainly, eventually the VSPs will not be counting minutes to make money, but they will still be there. Their purpose will be to inject some order, security, and “friction” into the network that the industry needs to prevent a total collapse of the critical communications system due to misuse. We might pay them for “membership” or for a flat rate service for some (not very clear) limited number of minutes, but we will pay them…and we will want to pay them for our life-line mainstream communications services.

In the end they will level out, and I will keep on sending my $20 a year. I look for magic jack to soley rely on thier own total operation of bandwidth and all, cause monopilizers like Comcast will eventually packet sniff, and rid you of your service for voip other than them. And AT& F”N T can blow me I despise those corrupt bastards!

I think it is halarious that magic jack can take a cheezy looking kids site and rack 9000 users a day, lol , I bet those conglomerate CEO ’s are crapping thier pants, lol ( Dont sell out magic jack )

The service is limited somewhat because it requires a running PC in order to faciliate calls, but the pricing model is certainly disruptive enough to have attracted a lot users in a short time.

SIP runs at the core of Comcast’s network, so they can peer (if they so choose) with any other SIP network. Comcast is moving to Docsys 3.0 which also supports SIP end points. Skype also does not support SIP end points, but they use SIP to connect with the telephone network (e.g. SkypeOut). The column makes the point Skype and Comcast can connecting callers without touching the telephone network.

The idea (or ideal) of flat rate telephony pricing either globally or in a smaller domain breaks down, not because of the technical transport mechanism (TDM circuit switched vs. VoIP), in my opinion, but because the underlying business model for termination of calls for almost all wireline and wireless telcos is, as you pointed out, minute-based. In some areas like the US the rates per minute are generally uniform and low, even for termination to wireless networks. (There are notable exceptions where some small US-based CLECs or ILECs have obtained or maintained relatively high termination rates and are involved in “traffic pumping” schemes.)

Where termination rates are low and predictable, carriers – whether traditional or VoIP – can reasonably safely engage in flat rate pricing to business users and consumers. This type of business model assumes a reasonable distribution of demand from users for the flat rate prices. An ongoing risk is that arbitrage wholesalers will buy the “retail” flat rate service and terminate huge amounts of traffic thereby breaking the business model.

Probably the largest impediment that I see to implementing flat rate pricing globally is the entrenched business models of non-US wireless (mostly GSM) carriers. These carriers charge high termination rates to other carriers to reach users on their networks. This business model was historically tied to these carriers charging their users for outbound calls, but not charging their end users for inbound calls. This made having a mobile phone more attractive and helped increase the rate of penetration of mobile phones in these markets. The down side is that the carriers charge other carriers high rates to terminate calls to their users. It was only in the last couple years that regulators like Ofcom in the UK have worked (see mobile termination on this page: http://www.ofcom.org.uk/research/cm/icmr07/overview/landscape/) to reduce these rates, since it has become clear that there is no market mechanism to correct the issue. All that being said, there are too many mobile carriers that depend upon these revenue streams to expect that the rates will match landline termination rates anytime soon. This in turn will require all carriers, whether VoIP or not, to set their rates to cover these potential costs.

I would expect that the path to a true SIP or VoIP flat rate telephony world will be through the expansion and interoperability of various VoIP “islands” of users. The ability of VoIP carriers to grow their closed or semi-closed VoIP-VoIP user groups into the mainstream seems to me to depend upon increasing the availability of clients on the termination end of calls. This need could be mitigated to some extent by well implemented voice messaging and presence technology. But traditional analog telephony is hard to beat in this respect since POTS phones are available to receive calls almost 24×7x365. Many existing SIP clients depend upon desktop or laptop computers being on and having the software client loaded. In a mobile environment VoIP software clients may cause battery life issues.

From the same view, why would a ‘magicJack’ company believe it will succeed? It requires a wired phone for its cheap long distance calling.

And now, we have alternative interconnect carriers that globally cater to no-on e but VOIP providers, making it possible to hop off the packet switched services and terminate to local exchanges world-wide, with all of the peering and termination fees hidden by these super-carriers.

The conversion of mobile to fully VOIP is not far away. The idea of seperate voice data plans is merely a convenient partitioning of the mobile carrier’s productization, for all of their payload past the tower interconnect is packet switched and managed dynamically in any case.