The future of the telecom industry lies not in mobility or data services but in leveraging voice as the best means of conveying “social energy.” The notion of social energy — aka human connection — was emphasized in John Bowlby’s attachment theory circa 1940 and again in Abraham Maslow’s theory of a hierarchy of needs, from 1943. Bowlby argued that human connection is not optional, while Maslow ranked human connection as No. 3 out of five basic needs motivating human behavior. But while the pursuit of social energy drives the growth of Twitter, Facebook and the as-yet unknown next big thing in communication, it also serves to make even the presently problematic voice industry a multitrillion-dollar global business.

And although President Obama suffers the same mediocre voice quality in conversations with world leaders as teens planning their social agenda do, even a standard telephone call represents the next best thing to being there relative to text or non real-time options. The question is not whether existing uses of the telephone might benefit from voice quality improvements, which, by definition, consist of only those activities one can accomplish in spite of the limitations. The question is whether the implementation of high-definition voice and other changes might make the telephone useful in contexts that presently require getting together in person. Orange’s announced plans to offer HD voice in 2010 as a competitive tool against O2 in the UK will provide an opportunity to put this question to the test.

Indeed, the notion of social energy provides a ready road map for telco innovation. To that end, FWD, where I am CEO, has launched a VoIP trial dubbed Nova which leverages HD (G.722)-capable SIP end points to create the communication equivalent of a web site. Indeed, the declining demand for voice services make clear the need to create more compelling voice offers, but the notion of a telephone company without voice is like a music industry without music.

In-post image courtesy of Flickr user garryknight; thumbnail image of user Don Fulano.

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In a white paper I wrote back in December 2000, entitled “Telephony Unplugged” (PDF), I documented the threat wireless posed to wireline, arguing that the arrival of price parity between between the two would transform the business-focused wireless industry into a consumer phenomenon. The mobile industry subsequently tripled, as wireless-only customers grew to 20 percent from 4 percent. But while wireless HD options exist, lower cost and higher reliability broadband gives wireline an advantage.

Doubling the frequency response represents the starting point for HD (analogous to a move from AM to FM), but HD competition also promises to spark a steady stream of innovations. The call-by-call negotiation of codecs made possible by SIP renders HD a meritocracy. There are an infinite number of tuning options available to improve the acoustic performance of devices and navigate network impairments, and efforts to close the gap between remote and in-person meetings offers an endless range of research topics.

Mobile dominates the future plans of both telcos and cablecos, for the telcos view the year-over-year declines in wireline experienced since 2000 as permanent, and the cablecos are offering their digital phone plans to the same shrinking pool of customers. In the meantime, both have a range of HD implementation options that complement existing investments in data infrastructure. Which of them will get HD religion first, however, remains unclear. The wireless companies may even move first, as the 3GPP standard includes the wideband codec AMR-WB. In any case, HD represents the possibility of a communication industry organized around the novel notion of expanding communication functionality.

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On one hand, the analog infrastructure between the end user and the telco central office limits landline voice quality; on the other hand, the network equipment cell phone companies deploy sacrifices voice quality in order to make more efficient use of spectrum. While overcoming these limitations requires a complete overhaul of the telephone network, Internet-connected devices, represent the only practical means to build a High Definition Voice Network (HDVN). This is especially true when it comes to landlines; a G.722 wideband codec doubles landline frequency response and pushes fidelity toward an FM broadcast signal. (See a demo created by Siemens Gigaset.)

As with any technology rollout, there are identifiable obstacles ahead. Improving voice quality requires compatible devices at both ends of the connection, for example, and the specific communication contexts or content that require voice quality improvements remain uncertain. Notably, an emergent HDVN will not immediately enjoy the reliability and ubiquity of the traditional telephone network. And since it will require reliable broadband access, the early focus will be on fixed locations.

A similar list of issues did not, however, prevent the introduction FM, color TV, CDs, DVDs or HDTV. And people will embrace the HDVN as they experience the benefits of improved voice quality in contexts that involve emotional content. In particular, the HDVN ecosystem will operate more like the Internet and web rather than the vertical integration model of traditional telecom.

For a glimpse into the benefits of an HDVN, look no further than Skype. If an HDVN can replicate Skype’s ease of provisioning and use while leveraging open rather than proprietary protocols, the telephone business will change forever. But the decision to compromise voice quality via a revenue model based on connecting calls to the telephone network also makes Skype a cautionary tale. An HDVN needs to survive as a platform for selling software and devices, as in the case of the web. Telephone companies will look for ways to undermine an HDVN as they’ll see it as a threat to their connectivity gatekeeper status. The success or failure of these efforts will determine whether voice quality remains unchanged for another 50 years.


Daniel Berninger is the CEO of Free World Dialup.

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Cell tower in Ghana

The success of mobile phone companies in the country — Ghanaians have access to essentially the same devices, features and pricing as people in Europe or the U.S. — illustrates the opportunity a stable Africa presents for the larger infotech and communication industries. After all, the roughly 840 million people distributed across the continent’s 53 countries represent some 12 percent of the world’s population, and its cash economy leaves it relatively untouched by the credit market turmoil in the developed world. Moreover, Africa’s successful transition to a knowledge economy could make it a sustainable economic engine for the entire planet.

Some are already looking to capitalize on such an opportunity. Vodafone, for example, acquired the state-owned telco incumbent Ghana Telecom for $900 million back in August in a deal that includes the promise of $500 million worth of investments into Ghana’s fiber infrastructure.

Vodafone’s buy bring the number of mobile phone companies in Ghana to six. In the meantime, broadband penetration remains less than 2 percent, but competing fiber builds connecting the country’s cell towers mean cheap and ubiquitous wireless broadband is on its way.

Indeed, enterprising Ghanians already talk about the country’s potential to become Africa’s “Silicon Valley.” While any direct economic comparisons could only be made with the California from the mid-1800s, the rapid spread of mobile phone technologies suggests it won’t take 150 years for Ghana to catch up. And the rest of Africa may not be far behind.

Daniel Berninger is the CEO of Free World Dialup. To see more pictures from his trip to Ghana, go here.

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Framing the value of VoIP as replacement for traditional telephone service makes interconnection with the telephone network seem essential, but VoIP enables communication solutions that go beyond the
“telephone call.” Think of it as viewing the telephone itself as a more efficient telegraph. The infocom industry needs to unleash new demand associated with new services. A transformation from world wide web to worldwide communication requires interconnection among VoIP providers, not the telephone network. The unwillingness of Vonage and Skype to interconnect with other VoIP providers makes no more sense than Yahoo imposing on users a proprietary browser that can’t be used to access any other sites on the web.

The voice quality of a telephone call remains inferior to even an AM radio broadcast. Low fidelity loses much of the character of voice necessary to convey mood or subtle meaning not contained in the words themselves. A telephone call remains a poor substitute for meeting in person, but demand for high-quality audio still requires an industry wide market push, as in the effort that won HD video momentum. Improving voice quality remains off the table as long as the value of VoIP requires interconnection with the telephone network.

None of the means used to navigate the Internet have analogs in the telephone world. Web site visitors can arrive by entering a URL into the browser address bar. The relative ease of remembering domain names vs. telephone numbers is difficult to dispute; a significant portion of web site visits are the result of people guessing the URLs. And compared to web search engines, both the online and offline versions of yellow pages offer very weak functionality.

Absent a requirement to connect with the telephone network, VoIP implementations can support click-to-connect and flat-rate global connections. The problem is finding a path to critical mass. The rapid growth of the web after the emergence of the browser in 1991 followed the addition of click-to-connect functionality to flat-rate global connectivity associated with Internet. The web browser set in motion a virtuous cycle of growth as expanding content attracted new audiences and audience growth attracted new content. The same process could play out with a worldwide communications model that combines click-to-connect addressing and flat-rate global termination — neither of which can be found by interconnecting with the telephone network.

Daniel Berninger is the CEO of Free World Dialup

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In fact, given carriers’ efforts to excise voice functionality, it’s the Internet that seems unlikely to survive, much less prosper. Carriers routinely require device manufacturers to handicap handsets, for example, to remove Wi-Fi functionality in order to make it difficult to bypass voice plans. Another example is that of Apple and AT&T, which require iPhone customers to purchase both voice and data connectivity (i.e. laundry service and power) — a policy that’s even enforced for deaf customers with a doctor-certified inability to speak or hear.

Low cost or free voice functionality helps drive demand for Internet access, so it hardly seems a good idea to sacrifice voice in order to get mobile phones with Internet functionality. The way forward requires making the Internet more useful for connecting communication devices, not less. For example, addressing the three issues below would go a long way toward creating an Internet for devices that competes directly with carriers for mobile phone users:

• Close the ease-of-use gap between configuring session initiation protocol VoIP devices like the Linksys WIP330 IP Phone (a.k.a. “Cisco’s iPhone”) and the provisioning process for cell phones. The former remains sufficiently painful as to exclude everyone without an IT department or geek credentials, but the telcos cannot stop the 100 or so manufacturers of SIP devices from agreeing on a common provisioning mechanism.
• Unify the addressing of all SIP-based devices. The insistence on proprietary screen names and unwillingness to peer leaves real-time Internet services like instant messaging and VoIP mere islands of communication. Even the millions of users claimed by AIM or Skype are meaningless vs. the 3.3 billion wired and wireless phones addressable by telephone number. The secret to carriers’ ability to generate in excess of a trillion dollars in revenue from voice services is interconnection.
• Eliminate the user intervention steps necessary for wireless device connection. Connectivity should get addressed as a matter of reception, as in the case of mobile phones or even FM radios, not by presenting users with lists of Wi-Fi access points. It seems like there must exist automated solutions for picking and connecting to or disconnecting from Wi-Fi access points.

Initially, electric power generation companies were application-specific, which resulted in incompatible voltages and infrastructure being used for everything from street and residential lighting to industrial applications. The decision to abandon the link between application and power generation unleashed an explosion of devices offering the tremendous range of productivity and entertainment options we take for granted today. When it comes to decoupling the connectivity and application, the nature of the Internet makes it possible to create mobile phones with CD audio quality. The Apple iPhone’s elegance does not change the fact that basic voice quality remains unimproved since mobile phones first arrived 25 years ago. The mobile phone companies see the Internet as a threat, not an opportunity.

Daniel Berninger is the CEO of Free World Dialup

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Such plans involve downloaded SIP User Agent software that can also voice-enable gadgets like the Nintendo DS, Sony PSP or iPod Touch. Dan Borislow claims the marketing blitz for his SIP-based magicJack puts him on track to sell 500,000 of the devices by the end of this month. Yet the displacement of analog phones by VoIP devices has not displaced the telephone network itself.

The state of affairs is analogous to printing email before it reaches the destination in order to preserve a role for the post office. It will not last. The ubiquitous use of SIP makes it possible to configure VoIP traffic to peer directly via the Internet, but the business models of VoIP companies depend on the minutes-based charging enabled by the telephone network. Companies like Skype and Vonage, as well as the Web 2.0 voice plays Jajah or Jaxtr, provide for free calls between users, but they all generate revenue by sending off-Net calls to the telephone network.

The 20 percent VoIP penetration number implies that both called and calling parties have VoIP devices about 4 percent of the time. This leaves plenty of work for the telephone network, but the long-term utility of passing VoIP traffic through the telephone network does not look promising. At some point, the penetration of VoIP devices will cross a threshold that makes the minutes-based business model of telco and VoIP players alike untenable.

The strategy of using VoIP to make the telephone network more efficient has short-term merit in that it avoids the expensive process of changing end user behavior. The usual mode of price competition serves as a reasonable placeholder until VoIP devices get sufficiently mature and achieve critical mass. A regulatory environment that requires VoIP players to implement traditional functionality associated with E911 and CALEA contribute to preserving the status quo. In the meantime, patent litigation remains a drag on investment capital, and the availability of suitable Internet connectivity remains particularly weak in the mobile context — Internet access in any form remains an obstacle in many locations around the world. Reliability gives the telephone network an edge over the Internet for sales calls and other high-value communication.

Telephone network integration may provide a useful transition strategy en route to VoIP nirvana, or it may represent a unrecoverable dead end for the current crop of VoIP startups. Companies that depend on the telephone network inherit of a range of artificial constraints. VoIP devices connected via the telephone network lose the prospect of delivering high-quality audio. Traditional telephones do not support the use of domain names for routing or hyperlinking. Global flat-rate termination that serves as a driving force for applications of the Internet get sacrificed. Embracing the telephone network postpones the search for new forms of communication.

The dependence of VoIP plays on the telephone network does not erase the risks VoIP poses to the telco status quo. At this point it’s not even clear if there exists a role in a VoIP infocom ecosystem for traditional service providers. The metered usage charges that make the telephone network attractive from a business model perspective do not exist in an Internet context. Infocom seems likely to mirror the existing infotech bring-your-own-device ecosystem with hardware vendors, software companies and access providers. It will take at least another decade for the forces at work to play out, but this provides little consolation for an industry that traces its roots to 1876 and telco executives unable to retire before the music stops.

Daniel Berninger is the CEO of Free World Dialup

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Few over the age of 25 will like the idea of creating a permanent record of telephone calls and other forms of communication, but the discomfort of mature adults can represent a counter-indicator. Plus, it seems safe to assume that people can distinguish between government (bad) and personal (good) uses of recording technology. Communication archives will require strong privacy tools and a reliable delete function, but an argument against a permanent record is an argument against communication. After all, people avoid email in some contexts, but no one proposes eliminating email archives.

The retention of telephone numbers for calls dialed and answered represents an important feature of cell phones. A record of the content of a call could provide a similarly rich resource. The ability to play back a conversation could improve understanding or resolve disputes the same way as re-reading an email can. Voice conversations might get forwarded or included with a reply. Search technology could be applied directly to the audio or after a speech-to-text conversion. An accumulated body of communication would represent an important source of information and a treasured asset in the same manner as email and traditional letter writing.

Unified communication and messaging efforts seek to converge diverse modes of communication into a single stream, but the ability to link all forms of communication by subject, time and recipient may prove to be more useful. Conversation threading might work something like CRM for personal relationships. Tristan Louis offers a detailed wish list in his blog post describing a Personal Relationship Manager. Importantly, trust and the inflexible nature of the telephone network make AT&T et al. poor candidates for implementing conversation threading. The challenge is far better suited to the Internet-enabled communication tools of the emerging infocom industry.

How recording might alter communication behavior remains to be seen. The fact of a permanent record may improve the prospect for civil behavior or it may not — that certainly hasn’t proven to be the case for email. There exist laws regarding the recording of telephone calls, but the extension of off-line laws to an Internet context can prove hazardous. Efforts to implement conversation threading might give rise to an entirely new category of communication, as different from traditional telephone calls as email differs from writing a letter. And the utility of conversation threading may prove greater than the discomfort associated with recording telephone calls. Regardless, there is ample room for improving the communication status quo.

* 4 terabytes holds 1 million, 4-megabyte song files — the equivalent of 20,000 recorded songs each year since the arrival of record labels in the 1950s.

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Given the open-ended nature of the information that gets indexed, search engines remain poorly suited to the task of finding contact information. Success depends on a cleverly structured query; search engines do not, after all, distinguish contact information from other types of information. But while a directory with a relatively finite and narrow data set (e.g. contact information) would greatly increase the probability of success, the process of creating directories still awaits an Internet upgrade.

The standard model for directories fails with respect to mobile phones, email addresses and instant messaging screen names. Posting the Yellow Pages online retains the same city and state search limitations of the paper directories, and the infrequent publishing cycle of directories becomes unworkable at the current pace with which communication coordinates get added and subtracted. Further, the growth in communication options makes it impractical to rely on a single service provider directory. What makes much more sense in our Internet-heavy world is a user-generated directory in which individuals own and update their own listing.

The lack of a directory for mobile phone numbers traces to the fear of unwanted calls. A directory that supports authentication along the lines of social networks solves this problem. Keeping your number secret and employing Caller ID are poor substitutes for actually controlling who can call you. The social directory could implement an invite authentication process like any other social network. People already include some contact information in their social network profiles, but a purpose-built social directory could offer additional communication functionality.

The social directory represents a far more elegant solution than that of spamming friends with requests to update contact information through services like Plaxo. The social directory could make a social circle accessible via clickable links while hiding the actual contact information. Rather than giving out a telephone number or email address to a new acquaintance, users of a social directory would associate their listing with keywords (such as “plumber” or “dog lover”).

As the number of communication options increases, so does the burden of managing contact information, yet Internet-enabled directory options remain lacking. Google’s 60 percent share of Internet searches gives the company both gatekeeper status in the information Internet — not to mention a rich market capitalization. However, Google’s revenue represents less than a third of what the declining telephone directories generate in the U.S. alone. Riches await the infocom company that achieves gatekeeper status for the Internet’s communications applications.

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Gopher, FTP, and Telnet had long enabled the sharing of information between computers attached to the Internet, but friction associated with poor usability limited interest in the Internet to academia. New users, attracted by browser-based navigation, set in motion a virtuous cycle that got the information Internet off to the races. Growth in users attracted more information providers that in turn attracted new users. By 2007, 1.3 billion people were using the Internet to access information available from 500 million connected computers.

Growth of the call.domain.com Internet remains underwhelming because attaching communication devices (aka IP phones) to the Internet is still an arduous process. Skype won popularity by addressing PC usability challenges, but it is a closed platform and the PC remains problematic for communication. Cisco sells millions of IP phones into the enterprise market each quarter, but only a tiny fraction end up directly accessible via the Internet. Vonage uses open standard SIP-based devices, but Vonage does not peer directly with other VoIP providers. IP phones directly addressable via the Internet still number less than a million 10 years after Selsius Systems created the category.

The Internet communications industry focused virtually all investment over the last decade onto bridging the Internet and telephone network. With an audience already comfortable using telephones, this seemed like a rational approach, and one that forged the most direct route to critical mass — the first Vonage customer enjoyed direct-dial access to every phone on the planet. But this telephone-centric strategy was a failure. It cost the industry the two key value propositions driving the growth of the Internet: unmetered global termination and click-to-call addressing. The nature of the telephone network erases the prospect for an HD voice equivalent to the HD video phenomena sweeping consumer electronics.

A focus on ease of use represents a well-worn path to critical mass already forged by the likes of AOL, Google and YouTube. VoIP needs a Mark Andreessen to unwind complicated device configuration and addressing. Progress may require a helper app model, such as with Apple’s iPod and iTunes. The call.domain.com Internet might copy the authentication value proposition of social networks in which an invite transaction precedes connection. In the case of high value relationships, a communication device that is sufficiently easy to use can reach critical mass by helping only two people to communicate.

Progress toward call.domain.com will get measured as a reduction in the steps required for device setup and clicks required for call setup. The results will get measured like www.domain as a count of attached devices and associated users. Low-cost devices and open standards that the infocom industry needs already exist, but the value proposition still requires significant work. A device that replicates the same experience available from the telephone company for the last 100 years seems unlikely to register with the public as compelling.

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Search remains an inefficient means of finding contact information. The online version of telephone directories offer only marginally better utility than the dead-tree version. Clicking a link has so far not replaced dialing telephone numbers. Address books remain a burden to create and keep current. Communication starts with the same frustrating period of looking for a telephone number and frequently ends with the same frustrating period of phone tag that existed before the Internet.

Communication engages participants more intimately than linking computer files. Moving from hypertext to “hypercomm” will require the infocomm industry to cope with privacy, authentication and trust. People prefer less communication in the absence of control. The status quo of relatively weak communication tools will persist as long as people cannot control who rings their phone. No one would be interested in buying a BMW if they did not control who gets into it. Caller ID falls woefully short in this regard.

The arrival of social networks may prove a turning point. The reluctance to post personal information diminished as soon as social networks applied friends lists (e.g. hyperlinks between people) as the basis for accessing web pages. Friends lists combined with a mechanism for linking people to their respective communication devices has the potential to make click-to-call practical. Web page links can hide the mechanics of setting up connections between devices after someone goes through the one-time step of provisioning their telephone number. If everyone provisions their telephone number as a click-to-call link, then sharing the links replaces the static information in address books.

A hypercomm application also needs a presence component. The binary online vs. offline associated with IM clients may not suffice. People need control over presence by context (e.g. topic, person and time of day). This means finding the right balance between automation and manual control that minimizes the burden and maximizes utility. In the absence of presence awareness, hypercomm applications will have a hard time moving beyond the messaging apps that already exist on social networking sites.

Linking people and their communication devices creates opportunities to search against the identifying information in social networking profiles. A search for “San Francisco” might return click-to-call links for people with the city listed somewhere in their profiles. The results might be ranked by a relevance criteria, but the mere existence of the search capability will motivate people to post more information to their profiles. Improving the prospect for discovery turns out to be a good way of encouraging people to post more information.

The Internet jumped to 10,000 end points from a mere 500 the year after the arrival of the web browser. Imagine a world where accessing web pages required “dialing” an IP address, and you have some idea the revolution that would be unleashed should hypercomm become a reality.

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The most recent quarterly results from the telcos starkly demonstrate this reality, with year-over-year declines in access lines of roughly 10 percent. Displacement by cell phones, cable VoIP, and the waning need for second lines (e.g. fax, dialup Internet, etc.) are driving this decline — in other words, a collapse in usage. It should come as no surprise to anyone paying attention to how many times they pick up a telephone that the FCC’s annual trends in telephony service statistics show a 40 percent drop in telephone network minutes since 2000.

Telecom represents an anomaly among technology-driven industries. There exists no equivalent to Moore’s Law. The quality of a telephone call between neighbors in 2008 differs very little from the same call in 1958. Reliability, audio quality, and even the telephone itself remain largely unchanged. This makes the industry even more vulnerable than the computing time-share business, where companies like Digital Equipment delivered annual cost performance improvements when the PC arrived on the scene.

Verizon’s VoIP patent lawsuits only accelerate these trends. The telcos enjoy very high margins on the $7-to-$10 per subscriber that comes via the likes of Vonage, Cox and Charter; legal successes hasten the pace of work to shut off this revenue. The cable companies can pursue settlement-free peering of voice traffic between each other. People with SIP-based broadband phones get voice functionality without touching the telephone network. The telcos have still not recovered lost revenue from the last group of competitors (i.e CLEC’s) defeated in the courtroom.

The to-do list for telco-free communication nirvana parallels the developments that broke the grip of time-share computing. The wannabe infocom industry needs compelling applications that accelerate adoption a la the spreadsheet and desktop publishing. These compelling applications seem unlikely without a communication operating system analog to MS-DOS that simplifies the task of hardware interaction and resource allocation. The infocom industry needs to produce compelling devices that go beyond features and functionality already available from the telcos.

The telephone companies still control key inputs in Internet access and backbone capacity, but discouraging new communication applications gets problematic as dependence on data revenue grows. A more enlightened approach may prove more successful. FM did not entirely eliminate AM radio. TV did not entirely obsolete radio. Mainframe computing remained important for applications requiring high reliability, and the telephone network seems likely to remain the most reliable means of delivering E911 functionality. Consider the example of IBM’s contribution to the demise of time-share computing with the introduction of the IBM PC. But beware of the Harvard dropout with new ideas about software.

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Telephone service I had in 1984 was in most ways worse than the service I got when I was a little boy in the South in the 1930s. Then, I’d pick up the receiver, and the lady would say, “Number, please,” and I’d say, “I want my Mommy!” She might say, “Well, Skippy, she was over at Miz Ferguson’s, but she left there and now she’s at Miz Furrey’s. Somebody’s using the phone there right now, but I’ll break in and tell them you need your Mama.” We had call waiting, call forwarding, executive override and voice recognition. I didn’t even have to dial. Things went straight downhill from there.

Telephone companies continue to add annoyances, requiring the “1” for long distance, requiring area codes for local calls, and changing area codes to accommodate growth. In the case of caller ID, the telcos have the temerity to charge extra for the inadequacy of their services. ISPs certainly don’t enjoy a similar revenue stream for revealing the identity of the person sending email. Did anyone notice the Internet survives without directory assistance charging $1.50 to help people find URLs? Telephone companies charge for the privilege of an unlisted number, or for opting out of directory assistance. While on the Internet, obscurity remains free.

Technicians across the country stare into boxes of jumbled wires countless times every day, because telephone numbers reflect physical equipment in the field. But telephone numbers that reflect the general vicinity of a caller’s location represents a poor substitute for identity, and serve as a relic of the days before flat-rate calling. A new domain name assignment propagates across the global Internet in hours, but it can still take the telephone company a week to provision a telephone number. The persistence of telephone numbers reflects the long-standing pursuit of innovations that serve the telephone company, not telephone customers.

Progress in carrying voice over the Internet left the burden of telephone numbers in place. But while the 16-digit keypad may be ubiquitous, there is no imperative to use it. Why not utilize Internet and infotech platforms to recreate operator type functionality? Dial-by-name platforms work very well. Search engines turn the entire content of web sites into keyword alternatives for domain names, so why not allow callers to associate key word tags with their directory listing? Exchange keywords rather than telephone numbers with someone at a party or business meeting. Making users cope directly with telephone numbers makes no more sense than expecting people to navigate the Internet via IP addresses.

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Incremental progress toward flat-rate billing that started with AT&T Wireless’s Digital One Rate in 1998 have always proven successful. T-Mobile’s HotSpot @Home represents a recent example in which a dual-mode phone is utilized to get free calls wherever Wi-Fi Internet access exists. Most wireless carriers offer flat-rate pricing for calls between customers (e.g. AT&T Unlimited Mobile to Mobile) and calls between a short list of friends independent of network (e.g. Alltel MyCircle). The question remains, however, whether the expansion of these plans will ever produce Internet-like, flat-rate global calling.

There exist a lot of practical reasons for carriers to embrace flat-rate calling. Adding capacity can prove far less expensive than trying to keep track of usage. Complicated bills add to customer support costs. Deploying network infrastructure involves very few variable costs, so flat-rate pricing actually simplifies the return on investment calculation. But as long as government regulators play referee between various warring parties, the debate around reducing interconnection fees could go unresolved for years.

The Internet’s 300 million consumer broadband connections remain the best opportunity for unlimited global calling. Skype created a nice business voice-enabling PCs. Cisco’s Linksys and several dozen consumer electronics companies hope SIP-based broadband phones turn the Internet into the world’s largest unlimited calling zone. The future on the telco side will be shaped by the prospect that an emerging infocom industry might actually make this happen.

As with efforts to unwind net neutrality, competition represents a last resort for most telcos. Net neutrality keeps the dream of counting bits like minutes on hold, because as long as a voice bit costs the same as a video bit or a Facebook bit, metering bits doesn’t offer much promise. Club telco enjoys near monopoly control of Internet backbones. Cogent Communications is the only operator of a top ten Internet backbone without a legacy telecom business to protect. The hand-wringing about video-congested Internet backbones represents the precursor of a campaign to unwind settlement-free peering and increase transit pricing. Embarq recently petitioned the FCC to increase the rates associated with terminating VoIP traffic even as Vonage gets nothing to terminate traffic arriving from Embarq.

The Internet will either turn into the telephone network or the telephone network will turn into the Internet, but the conflicting pricing models seem unlikely to coexist forever. The volume of data traffic exceeded voice traffic in 1999 because of the varied applications made possible by global flat-rate connectivity. Voice traffic remains the dominant source of telco revenue nearly 10 years later, so not everyone views the development as an occasion to celebrate.

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Vonage survived and can look forward to a prosperous future as the third player in an oligopoly with the regional telcos and cablecos, but this hardly seems like the success story sought with the opening of patent protection to business methods in 1999. The work of the VoIP Forum built on the ITU H.323 standard, which dates back to 1991 , so Vonage’s loss in court does not owe to a lack of prior art. Vonage lost because of the difficulty in finding the proper documentation of prior art 15 years after the fact.

The antidote to software patents involves creating their exact opposite — a formal process of contributing software innovations to the public domain. Vonage’s experience, however, illustrates that the various standards-creating processes represent only a first step. A successful open-source model for patents requires creating a searchable archive of prior art in which inventors contribute their innovations in order to get protection from subsequent litigation.

This would replace the patent office’s dependence on the oath signed by patent applicants “acknowledging the duty to disclose all information known to be material to patentability.” Vonage’s decision to base its technical implementations on the work of the VoIP Forum and IETF seems reasonable. Who would have guessed the patent office granted Verizon a patent on the same subject matter?

Verizon’s “name translation” patents address the process of converting between an IP address and a telephone number during call setup. Absent the expectation of end users dialing IP addresses, all VoIP implementations will involve some form of “name translation.” A patent examiner trying to meet expectations of reviewing a patent per day can be excused for having missed the fact that the name translation issue arose with the ITU H.323 standard.

Questions remain over how Verizon failed to disclose the H.323 standard in their declaration, never mind the VoIP Forum’s efforts that built on the H.323 standard. Verizon’s first name-translation patent (’711) has a filing date two months after the VoIP Forum published the results of their efforts. Verizon’s prior art disclosures also failed to mention VocalTec Communications, the company credited with bringing the VoIP category to public awareness in February 1995. The author of the patent in question, Eric Voit, initiated a relationship with Lior Haramaty, a co-founder of VocalTec, in the same month he filed the first patent.

As project director for VocalTec, I was around then; I also led a joint venture with Digital Equipment that involved implementing Verizon’s first VoIP pilot in 1998. Eric Voit’s second patent, from February 2000 (’574), incorporates ideas addressed in detail during this pilot. However, Verizon filed the second patent as a continuation of the first — and it, too, was absent any disclosure about VocalTec or the VoIP Forum. The filing of the second patent as a continuation gives the claims the same prior art grace period as the first patent.

A formal process of filing prior art to the public domain will protect an emerging infocom industry better than just depending on overworked patent examiners and applicants for prior art searches.

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For the vast majority of the 6.6 billion people on Earth, proximity continues to dominate daily life. Communication tools remain insufficiently distributed to alter the accidental realities of war and wealth tied to place of birth. The question of how to make communication available to everyone deserves more attention as the human network marches toward the 7 billion-mark, a threshold it’s forecast to reach by the end of 2012.

The lack of access to communication may seem moot relative to the lack of access to power, basic shelter, clean water and sufficient food. But Muhammad Yunus won a Nobel Prize in 2006 for demonstrating via Grameen Bank that access to communication yields access to basic needs, not the other way around.

There also exists a feedback mechanism between the motivation for deployment and the cost and utility of communication tools. The emergence of mobile phones more the doubled the number of people with access to communication. That 70 percent of the world population remains disconnected represents an indictment of the long-standing failure to improve the affordability and utility of communication.

The network effect makes getting everyone connected important for the already connected. An infocom ecosystem expanding the reach of the infotech industry to communication holds more promise in this regard than relying on the usual stewards of communication. A three-tier value chain of devices, connectivity, and a means to address the devices need not even include telephone companies.

The communication device represents the primary expense in this model. The cost of connectivity gets spread across all the uses of Internet access, and the addressing functionality seems unlikely to consume more than a few pennies of resources per user. There exist a number of free self-help, open-source platforms for addressing functionality in OpenSER, Asterisk and FreeRadius.

This architecture and a budget of $100 billion (about the size of the global pet food market) could go a long way to connecting everyone in the human network. SignalSys offers a $25 starter SIP phone; global scale and the four years until 2012 should be enough to make $5 SIP phone feasible. Meraki already provides a means to blanket areas with Wi-Fi connectivity for less than $5 per user.

Backhaul represents the only non-fixed cost of the entire endeavor, but the $30 billion that would be left over after buying SIP phones and setting up local Internet access for 7 billion people exceeds the revenue of the entire Internet backbone industry in 2007. There exist unknown logistic and maintenance issues, but cost and technical feasibility do not look like insurmountable obstacles.

The challenge of distribution is one of breadth. There also exists plenty of room for improvement in the depth of communication functionality. An infocom ecosystem can create a broad range of multimedia-capable devices at the high end of the market at the same time it delivers a lowest common denominator device necessary to get everyone connected. The emerging infocom industry can welcome everyone to the human network.

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