I agree that the system has to pay for itself.

skeptic — Sat, 02 Dec 2006 20:29:32 +0000

I agree that the system has to pay for itself. I think we disagree on how.

I feel a new blog entry coming on

VOIP is a fancy Dial Around Service

Kevin Delaney — Sat, 02 Dec 2006 17:54:31 +0000

I worked for a small telco on VOIP in the 1990s. I like the VOIP technology, but I think the current big players in VOIP are the slime buckets of telecom. These companies simply provide a "do-it-self" dial around service.

A dial around service is a service that dials around a metered switch so that people could use the service of a teleco without paying for the service. Dial around services are essentially anti-market products since they deny the people working to build a network the ability to receive the income from that network. Imagine an employee who will open the back door to the local grocery store if you slip him a quick $20. This looks like a good investment to both you and the employee. You get a cart of $100 of groceries for $20, and the employee gets twenty smackers. In the scheme of things, it bad for the grocery industry that makes groceries appear on the shelves.

The reason that VOIP dial arounds exists in the United States is the cozy relationship that the ATT monopoly had with the regulators. The idea in the early days of telecom was that long distance calling was a luxury and local calling a necessity. Regulators built a house of cards that slapped excessive fees and costs on long distance calling to subsidize local and rural service.

As for the internet, it has suffered from its inception from the lack of a means to pay for its development and maintenance. The initial investment in the internet was funded by the Military and Universities. Neither group was all that interested in metering usage. When the internet went global, it initially used the backbone funded by Universities. Universities had no intention of letting the public use their little bit of socialist manna.

It just so happens that as Universities closed access to their backbone, the telephone companies were looking to make major upgrades in capacity with fiber optics. It also happens that they found ways to effectively compress analog meaning they had spare capacity. A prime component of the dot com boom was idiotic telephone executives who were willing to fund major increases in capacity without thoughts on how they would collect revenue from the capacity. These people were under the illusion that they would continue to get a major income stream from long distance.

The exponential increase capacity, however, ended up digging a big hole. The actual cost of delivering one call fell through the floor. The VOIP program I worked on was metered, and it payed taxes like a good little boy. The problem was that the service cost half a cent a minute to deliver a call, the taxes were $.05 a minute plus all of the employee taxes and other existance taxes. Over 90% of the money collected for the calls went to taxes.

VOIP was pioneered by telecos. As regulated entities, they could not capitalize on the technology. There was an opportunity for the first slime buckets to sneak out the door with a copy of a working copy of a VOIP application to make out like a bandit selling dial around technology. That is exactly what has happened.

What is currently happening is that big VOIP firms are making money hand over fist by selling software developed by the telephone companies. This software dials around the metered switches to use the networks funded by the telephone companies to undersell the telephone companies central product.

This is not sustainable. Our communication industry needs a framework that allows each of the different components of the industry to thrive. The idea that we would fund everything from by excessive fees for long distance calling is absurd. What the market desperately needs is to find ways that each of the different components of the market to collect money for the services that they provide.

It really is an ugly question. The media is pretending that VOIP industry is a wonderful Robbin Hood character stealing from evil telecommunication providers, however, it the Robbin Hoods are one of the biggest obstacles to providing quality service since there will always be clever ways to dial around any metered switch.

Further explanantion of QoS

skeptic — Sun, 06 Aug 2006 22:11:51 +0000

OK OK. It seems remarkabkle to me that there are people who know less about thsi stuff than me but there are, so here goes. [If you actually understand this stuff jump right in here and help]

Internet (TCP/IP) network devices these days have a Quality of Service (QoS) function that allows them to recognise different kinds of traffic and allocate proportuions of their bandwidth to each. So if your network is drowning in email, they can throttle it back to only use say 20% of the bandwidth. If downloads are swamping it they can throttle those. And so on.

The second and currently accepted approach is "DiffServ" or differentiated services. In the DiffServ model, packets are marked according to the type of service they need. In response to these markings, routers and switches use various queuing strategies to tailor performance to requirements. (At the IP layer, differentiated services code point (DSCP) markings use the 6 bits in the IP packet header. At the MAC layer, VLAN IEEE 802.1q and IEEE 802.1D can be used to carry essentially the same information)

Routers supporting DiffServ use multiple queues for packets awaiting transmission from bandwidth constrained (e.g., wide area) interfaces. Router vendors provide different capabilities for configuring this behavior, to include the number of queues supported, the relative priorities of queues, and bandwidth reserved for each queue.

In practice, when a packet must be forwarded from an interface with queuing, packets requiring low jitter (e.g., VoIP or VTC) are given priority over packets in other queues. Typically, some bandwidth is allocated by default to network control packets (e.g., ICMP and routing protocols), while best effort traffic might simply be given whatever bandwidth is left over.
From Wikipedia

The IT Skeptic - Comments for "VOIP and the anti-competitive behaviours that would logically induce in a telco"

I agree that the system has to pay for itself.

VOIP is a fancy Dial Around Service

Further explanantion of QoS