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TinotopiaLog → VoIP and the Phone Companies (11 Jul 2003)
Friday 11 July 2003

VoIP and the Phone Companies

Business Week has a story headlined “With iChat, Who Needs a Phone?”, about Apple’s new iChatAV software.

iChat (without the AV) has been around for a while. It’s basically an instant messaging client, comparable to AOL’s Instant Messenger (except that AIM only works with the AIM system, while iChat works with a number of competing networks).

iCha tAV is iChat with video and audio conferencing built in. This isn’t anything new, either; you’ve been able to have audio chats with people on AIM for some time now, and I believe that Yahoo!’s competing program allows video conferencing, too. For years, every copy of Windows has come with something called NetMeeting, which allows you to have standards-compliant video conferences with anyone on the Internet. The people on the other end could be using NetMeeting or any one of a number of hardware-based conferencing systems like those from Polycom.

The only important new feature that iChat AV has is that it works relatively well through firewalls and network address translation gateways. This is important, because almost all home-networking systems (like Apple’s own AirPort, or those “Cable/DSL router” things clogging the shelves at CompUSA) are basically NAT gateways. People who used NetMeeting, say, when their computer was plugged directly into their cable modem will find that it doesn’t work at all once they decide they want to connect another computer and install the router. I haven’t looked into Apple’s protocol to see precisely how it works, but I know it works through my network here at Tino HQ, while H.323 products like NetMeeting don’t.

This is a single and fairly peripheral feature that iChat has and NetMeeting doesn’t. NetMeeting has a lot of features (and it’ll work with more cameras, not to mention more computers) that iChat AV doesn’t. But this one feature, the ability to work with the way more networks are set up today, is invaluable.

I expect NetMeeting and other programs to gain the capability to talk to iChat AV before long, and to gain the ability to work on today’s common network architecture. When this has happened, we’ll need one more device, and the phone companies will start to hurt.

The device we need is a cordless phone-looking-thing with a base station that plugs into your USB port, and a small monochrome LCD display that shows your buddy list. Select a buddy, hit ‘call’, and in a short while you’re connected. On the other end, your buddy might be tied to his computer, or he might be using his own wireless USB phone. Wallah, as they say.

There are a few companies — Vonage is the most prominent — that offer flat-fate voice over IP service already, using your standard phones as your interface. They send you a box that you put in your basement and hook up to your cable modem or DSL line. You plug your home phone wiring into the other end of this box, and you can make phone calls to your heart’s content. You pick up the phone, hear a dial tone, and dial a number. Maybe that number points to another person using Vonage’s system; maybe it points to your grandmother’s regular phone line across the country. It doesn’t matter, because the company handles all that. People calling you just call your Vonage-issued phone number, and your phones ring. That the ring signal is generated by that box in your basement as as result of some IP traffic that’s come in isn’t important at all.

In the future, I’m sure that this will be the way wireline phone systems work: you’ll have some kind of high-speed packet data line into your house, and devices that work like phones hanging off it. You might even do away with the IP-to-analog-phone interface box all together, and have phones with the IP smarts built into them. When you went out of town to visit someone, you’d just take your physical phone with you and plug it in wherever you wanted. Your wireline phone calls would follow you, just as cellular phone calls currently do. (This actually works already with Vonage’s service, but you’ve got to lug a fairly bulky box, power supplies, phones, etc., so it’s not very convenient. It’s much more convenient than currently trying to get your ordinary phone number to ring a phone across the country, though.)

The point is — and this isn’t my phrase, but I forget where I read it — is that telephony is something you can do with the Internet; but the phone companies persist in thinking of the Internet as something you can do with the telephone network. This misconception is what will sink the phone companies if they don’t see the light soon enough.

Posted by tino at 11:53 11.07.03
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