Tag Archives: Federal Communications Commission

About 3520 days ago Telecom and Wireless

What’s Next: Internet Phone Service is Here

The only thing I have in common with Howard Stern (other than the fact that we are both mammals) is that we both use Internet telephone service from a company called Vonage. The Vonage service allows Howard and me to make, for $39.99 per month, unlimited phone calls anywhere in the U.S. and Canada and darned cheap phone calls to anywhere else in the world. It uses real phones and real phone numbers and is just like the service you’re used to, except that calls are routed over the Internet rather than over a telephone company’s network. Vonage is aimed at people with broadband Internet connections (primarily DSL or a cable modem) and uses a technology called voice over Internet protocol (VoIP). And it could kill your phone company. Here is what I get for my $39.99. I get a little box from Cisco Systems that plugs into the Ethernet switch on my home network, and into that I plug a telephone. I use Vonage as line three on my four-line Panasonic wireless phone system, so line three (the free one) is available on all six extension phones. If that sounds like a typical small-business setup, then you must have visited my house. The Vonage line replaces my old office phone line, saving me more on my SBC bill than I pay Vonage and making the service effectively free. (Lines one and two are for regular phone lines–a hedge.) I have a local phone number in my 707 area code, but I could have chosen a local phone number in a number of other area codes, including the oh-so-desirable 212 (just in case I wanted to pretend to have a New York office). And for editors calling that 212 number from their Midtown cubicles, it would be a local call. If I decide I want to change my area code I can get a new number in a new city for a small one-time fee. If I want a local phone number for the same phone in another area code in addition to my own, that’s an extra $4.99 per month per number. I can live without those things, but I do have, for $4.99 a month, a toll-free number. I also pay $9.99 per month to activate the second Ethernet port on the Cisco box for a fax line. That line goes not only to my fax machine but also to the Panasonic phone system, so lines three and four are VoIP. For about $55 per month, then, I have a phone line with unlimited local and long-distance calls, a fax line with 250 free minutes per month, which is a lot of faxing, and a toll-free number on which my stingy relatives can call me. And all this, of course, includes voice mail, caller ID, call waiting, call forwarding, etc. I can even get my voice-mail messages as audio files attached to e-mails sent to me anywhere in the world. But wait, there’s more! I can unplug my Cisco box in California and take it to the little house we have in Charleston, S.C., where every year I try to perfect my heat rash. I plug it into the Charleston DSL line and my business line and fax line ring there instead of in California. I could do the same thing on a trip to Japan, too, and soon even that won’t be necessary, because I’ll be able to replace the Cisco box with software on my notebook computer–so my office line will ring at my hotel in Tokyo. I can use a computer headset to take the call or, even better, by next year I’ll be able to plug a special phone into the USB port on my notebook. I completely bypass the hotel phone system. Not only am I saving on hotel charges, but my virtual phone doesn’t know it’s in Japan at all, so all my calls back to the U.S. are free. Vonage founder Jeffrey Citron also started the computerized stock-trading system Island ECN–and sold it for half a billion dollars. If your business is bigger than mine is, an affiliate of Vonage called Vontek can route the Internet phone right into your phone switch. It can even set up a virtual PBX so people working at home can all have extensions on the office phone systems no matter where they are in the world as long as they have broadband Internet service. I might never get out of bed. VoIP phone service has been around for years, but until recently the voice quality just wasn’t very good. Now, because computing power is cheaper and Internet connections are faster, it is hard to tell a VoIP phone from a regular phone–until you get the bill. One technical feature that is driving VoIP phone service is use of the session initiation protocol, or SIP. SIP comes from the world of instant messaging, where it is used to connect your teenage daughter to all of her online friends when she is supposed to be doing homework. What SIP does for VoIP is create peer-to-peer telephone connections anywhere in the world. In other words, the phones talk to each other without the need for any kind of phone switch in the middle. It is a phone system without a phone company, and the implications of that change are profound (as we’ll see). Vonage is not the only VoIP game in town, just the most visible right now. Founded by Jeffrey Citron, who started the computerized stock trading system Island ECN, then sold it to Instinet for $503 million, Vonage is spending more money and getting more exposure than its competitors. But those competitors are worth considering, too. At www.iconnecthere.com, for example, you can get a local number for your VoIP phone for only $9.95 per month. Another service, called Free World Dialup, costs nothing–but offers a lot less. The strongest competitor for Vonage on a feature-for-feature basis is Packet8 from 8X8, a California company that makes most of its money in the videoconferencing business. Packet8 does pretty much what Vonage does, but Packet8 just dropped its price for unlimited domestic calling to $19.95 per month. Can you say “price war”? Of course, this is an emerging nightmare for local and long-distance phone companies. Some of them are responding with their own unlimited calling plans, but they aren’t quite so full-featured as Vonage’s or Packet8′s. You can’t take your phone with you, for example. There is no risk of everyone swooping out and buying VoIP phones and eliminating the plain old telephone service (POTS) overnight. However, in the next five years there is going to be some serious worry at the traditional phone companies about how they will make money. All the investment in the late ’90s in Internet backbone construction (much of it by companies now in bankruptcy) is starting to look as if it might be good for something other than pornography and trading pirated music. “Big companies, which are traditionally where phones cost the most, will be the first to broadly adopt VoIP,” predicts John Todd, a VoIP consultant. “Even the slightest perception that VoIP is less reliable than normal services will cause companies to hedge their bets. However, when you can pay 30% of what you’re paying now, very often there is considerable interest in a new technology when the ROI turns positive in the first four months. For some companies that are voice-intensive, this can mean the difference between a humdrum year and a strong EBITDA positive, which perks up everyone’s ears these days.” The local phone companies, or incumbent local exchange carriers, will do whatever they can to slow the growth of VoIP, but the fact that the phone traffic is on the Internet will make VoIP impossible to stop. Vonage, for example, isn’t a phone company at all in the eyes of the Federal Communications Commission. Vonage, based in Edison, N.J., works with competitive local exchange carriers (not the local phone company) to acquire local phone numbers and interconnects in several states. You could too. There is plenty of room for more VoIP phone companies, and the cost of entry is low. For example, much of the guts of a VoIP phone system can be built on a Linux application called Asterisk, which is free. (Asterisk is interesting for reasons beyond its low price. It is an Open Source application that supports a voice compression scheme called G.729, which can cram four VoIP phone calls into the bandwidth normally required for one.) VoIP will have a big social and political effect, too, especially in other countries. Blocking SIP ports will become a way of life for many less-developed nations, as national phone monopolies struggle to keep their international long-distance cash cows alive. Law enforcement and intelligence agencies are beginning to comprehend what VoIP will do to their wiretap efforts, and they aren’t happy. Having spent $500 million to be able to tap almost any telephone line anywhere right from a computer screen, the FBI will find it hasn’t a clue where SIP phone calls are coming from or going to. Tony Soprano would have to have one. Howard Stern already does. Contributor Robert X. Cringely is a writer, broadcaster, and entrepreneur specializing in technology. Contact him at cringely@inc.com.

About 3612 days ago Telecom and Wireless

What’s Next: Power Surge

What’s Next When it comes to building a broadband Internet business, it is very hard to compete with the phone and cable companies. Their advantage is location, location, location, which is to say they’re right inside your house. Both companies have comprehensive local networks that were largely built and paid for before most of us had even heard of the Internet. It has been almost impossible, then, for any start-up broadband ISP to compete. But that may be about to change, thanks to that other network in your walls — the one belonging to the electric company. Power-line Internet is coming. Two power-line Internet companies — Current Technologies LLC of Germantown, Md., and Amperion Inc. of Andover, Mass. — have started trials with electric utilities. Their technologies vary slightly, but what they basically do is run an Internet signal over the so-called medium-voltage wiring that’s strung on the pole behind your house. Medium voltage to the power company generally means anything up to 10,000 volts. The power line is used as a network backbone — it can carry data traffic for something under a mile ( or further if a repeater is installed in the line ) before it has to be converted to some other medium like optical fiber or coaxial cable. So while the fingers and toes of the network are carrying the current that powers your electric blanket, the arms and legs of the network look like any other ISP. Where the two companies vary is in how they connect the Internet to your home from the utility pole or power line out back. Amperion makes the connection using a short-range radio network ( an 802.11b Wi-Fi network ), while Current actually jumps the utility transformer and carries the Internet right into your home wiring. Amperion’s solution is easier, but I think Current’s solution is better because it puts a network outlet in every wall socket and doesn’t suffer from wireless network blind spots like the one in the shadow of my stainless-steel refrigerator. Customers of both companies use standard networking gear that can be bought at places like CompUSA: Wi-Fi wireless adapters in the case of Amperion, and HomePlug power-line adapters for Current. These technologies are another benefit of Moore’s Law, which has made computer chips so inexpensive that it is now reasonable to use them for filtering the noise out of electric lines, allowing the lines to be used for data service. This is something that simply couldn’t be done at a reasonable cost until now. I am very excited about the idea of power-line Internet because it will lead to more competition, innovative new services, and lower prices — and because I believe it is actually going to happen. This is an important part of the story that many people outside the power industry ( and quite a few inside, too ) don’t understand. Sure, the FCC still has to give final approval, and state utility commissions have to approve rate structures that have not yet been submitted, but those barriers will fall over the next couple of years. This new kind of network is going to be implemented on a grand scale simply because now that it exists the electric companies, which are hardly known for their entrepreneurial flair, will come to understand that they can’t do without it. It isn’t just that the utilities want the additional revenue; they need this network for their own purposes. Utilities have discovered that it is much cheaper to gain system capacity through power conservation than by building more power plants. That’s why they give rebates on new refrigerators that use less energy. A megawatt hour regained through conservation is useful today, while creating a new megawatt hour can take a decade of planning and construction. The key to encouraging conservation is to find a way to monitor electricity use second by second and vary rates accordingly. This means that power could be made almost free at 4 a.m. but very expensive at 4 p.m., encouraging customers to run their dryers at night and rewarding conservation at any time of day. To do this requires a smart electric meter and a way of continuously linking that meter back to the power company. In other words, it requires a network. Right now San Diego County is running a pilot to replace 20,000 old electric meters with intelligent ones linked back to the utility through a wireless network that has nothing to do with the Internet. It would be even better if those new meters could be paid for not just through electrical savings and reduced power-plant construction costs, but also through revenue from an Internet service. This fact turns power-line Internet from some venture capitalist’s dream to a near certainty. Hardly known for entrepreneurial flair, utilities will learn that they can’t live without these new networks. The people behind these new services are pretty substantial too. The founders of Current Technologies, for example, once owned the 13th largest mobile phone company in America, which they sold to SBC Communications, as well as a variety of other communication and broadcasting properties that they sold to Liberty Media for $3 billion. This is not an undercapitalized operation. “This has the potential to be very disruptive technology,” says Jim Mollenkopf, director of systems engineering for Current. “The medium-voltage networking equipment can be installed by the same utility linemen using the same tools they are used to using. There is no special training required. Installing service in the house requires no truck roll at all — the customer just buys adapters at Best Buy or Comp-USA and plugs them into the wall.” Both Current and Amperion plan to work in partnership with electric utilities, leveraging not only the copper-wire power network but also the fiber data network that utilities sometimes already have in place on the same poles. They will begin with Internet service, and additional ser-vices like phone and even video will eventually follow. And it is in those additional services where opportunities lie for other entrepreneurs. Take voice service, for example. At Current’s demonstration home in Potomac, Md., phone service is provided by Vonage, a company that links broadband users into the regular voice network so they can make all calls over their Internet connection at substantial savings. What Vonage can do, you can too, and it really isn’t that hard. The Telecommunications Act of 1996 made competitive local phone service possible, forcing the former phone monopolies to sell cheap access to the voice network to their competitors. These competitive local exchange carriers ( CLECs ) haven’t done that well because the incumbent local exchange carriers ( ILECs — the former monopoly carriers ) have made it as difficult as possible for them. But a CLEC that offers local phone service through an Internet service provider doesn’t need to use the old phone company network. All it really needs is a source of local phone numbers that can be assigned, and this often comes from the state utility commission, not the ILEC. A CLEC that doesn’t need local network services doesn’t need to pay for those ser-vices and therefore has a lower cost structure. So power-line networking could create thousands of little phone companies that have dramatically lower costs than the traditional phone companies with which they’ll compete. Power-line Internet won’t compete with cable TV in the same direct way it will with phone service because television requires more network bandwidth than the power-line networks will be able to provide initially. According to Mollenkopf, Current Technologies will be able to deliver up to two megabits per second to each Internet customer, which is fast for an Internet connection but too slow to carry 40 channels of video. But the power-line network would be ideal for video rentals, and the best way to do that is not over the Internet, but — because it’s much cheaper — over the power-line backbone. Here, too, a local operation with a local video server has a performance and cost advantage over any national competitor. With about 20 million homes already having broadband Internet service, there are hundreds of start-ups building innovative new services that count on the broadband market reaching some critical mass. Power-line Internet service will make that critical mass come about sooner and will in the process destabilize the phone companies. The parts are nearly all in place for this to happen. Electric utilities will shortly have a great incentive to enter this business. They already have reliable billing and customer-support systems in place, and while customers are often angry with their phone or cable TV provider, most people — most people outside California, anyway — don’t hate their power company. Contributor Robert X. Cringely is a writer, broadcaster, and entrepreneur specializing in technology. Contact him at cringely@inc.com.

About 3734 days ago Wireless Networks

What’s Next: The Next Next Big Thing

What’s Next Disruptive technologies are those that change not just business but society. Personal computers threw the mainframe-computer business for a loop. Airlines replaced passenger trains. HMOs became an alternative to the family doctor. In all these cases, the computer, transportation, and health-care moguls of the time didn’t view the new entrants as real competition, but rather as gimmicks, flukes, toys. And the new entrants were, in their early incarnation, inferior to the technology they replaced. But they appealed to some groups of consumers enough so that they came to compete with, and eventually surpass, the previous technologies. And this is what is happening right now with wireless networking, which promises to change forever the computing and communication industries, creating a lot of business opportunity as it does so. Wireless networking in this context means strictly unlicensed digital communication using radio signals. That eliminates cellular and other mobile-data networks, which are typically owned by phone companies. What it includes is an unlicensed technology generally known as “WiFi,” because people don’t want to say “IEEE 802.11a, b, and g.” WiFi exists primarily thanks to Apple Computer, which years ago proposed to the Federal Communications Commission that certain radio frequencies in the 2.4 to 5.8 gigahertz range be allocated for unlicensed data communication. Today those frequencies are available for people to do pretty much anything as long as they stay below a certain power output and make nice-nice with the neighbors. Apple intended to use the frequencies for wireless local area networks and introduced its AirPort product line several years ago to do just that. AirPort allowed computers to link with one another within a radius of 50 meters, sharing data at speeds up to 11 megabits per second. AirPort wasn’t disruptive; it was convenient. It was a clever idea that appeared to pose no threat at all to the communications-infrastructure players. What threat could be posed by a 100-meter network? But there is power, real power, in WiFi’s unlicensed nature. As long as users didn’t break the FCC rules on Effective Radiated Power (four watts max), they could do anything, and this was very attractive to experimenters, who came up with all sorts of WiFi-based business ideas, two of which eventually stuck. The first great idea was the so-called hot spot, a WiFi access point connected to the Internet that allowed those nearby to make a wireless connection to read their e-mail or look at dirty pictures while they drank coffee. Devised in the Internet’s heyday, the not-very-well-thought-out idea was that people who could go online would buy more coffee and pay some sort of fee for access. Companies you have never heard of are creating networks of hot spots in restaurants, in airports, on trains.

About 4737 days ago Wireless Networks

Can I use microwave technology to connect two offices?

An inc.com user asks:I need to network offices located three and ten miles apart. Can I connect them via microwave? Information Technology mentor Glenn Weadock responds:Yes. The good news is that you have many products from which to choose. That’s also the bad news, in that choosing one isn’t always easy. I suggest that you consider microwave and another technology called Direct Sequence Spread Spectrum (DSSS) in the context of other, more traditional options, some of which I discuss here. You will find a fairly linear relationship between data throughput capability and cost, so you can decide how much speed your business can justify buying. Microwave technology is worth considering, in my opinion, if you require high-speed connections and you have a bunch of money in the bank. Such systems need a line of sight between buildings or a satellite link. You can achieve data throughput rates of 10 Mbps, 20 Mbps, and higher, over a range up to 10 miles (or more with satellite support). However, you will need FCC licenses if you choose this technology. Pinnacle Communications and Digital Microwave are two examples of vendors of microwave systems. DSSS, another wireless option, is a radio technology that offers data throughput in the range of 1.5 Mbps over a three- to five-mile range, although you can stretch the range to ten miles or so with amplification equipment. Wave Wireless’s SpeedLAN is an example of this type of system. DSSS is typically less expensive than microwave, and it uses an unlicensed part of the radio spectrum so you don’t need government approval to use it. Microwave and DSSS are both cool technologies, but don’t forget more traditional options, especially if line-of-sight problems or budget constraints place wireless networking out of reach. A T1 line is a digital link that uses two pairs of wires, can handle data, video, and voice, and runs at speeds up to around 1.5 Mbps. (If you can tolerate slower speeds, you can look at a “fractional T1,” which is proportionally slower and less expensive.) For slower leased-line connections that are still faster than analog ones, DSL and ISDN lines can represent a cost-effective solution, with many businesses today favoring DSL. The traditional analog leased line is a fixed point-to-point conditioned phone line between offices. Dial-up links using unconditioned POTS (Plain Old Telephone System) lines are definitely the least expensive connections, but they suffer from fairly severe speed limitations. Today’s 56K modems often connect at speeds of 33 kbps to 45 kbps, but you can use a bank of several modems to create multilink connections that go faster. In closing, I should mention that you don’t have to have private, dedicated links between your offices to network them. You can create a private network inside the public Internet. If you already use an Internet service provider, you can use those connections to create a secure “tunnel” of communication that serves your company. Such links constitute a “virtual private network,” or VPN. You can set up a VPN with readily available software, such as Windows NT or Windows 2000. Network communications over a VPN are encrypted so that other Internet surfers can’t see your VPN traffic. Copyright © 2000 inc.com