ADVANTAGES OF INTERNET TELEPHONY

The most attractive feature of Internet telephony is the lack of usage-based charges.  The use of computers to perform telephony functions will result in numerous other advantages for users including affordable new product features and increased competition among firms.

Price

Digicorp advertises its Internet telephony product with the slogan "Call anywhere.  Talk forever.  Never pay long distance."  While users must initially purchase multimedia computer hardware and telephony software, and pay for an Internet connection (typically a flat monthly fee), an unlimited number of Internet calls can then be made without additional charges.  These Internet calls are "free" whether domestic or international, and represent a huge potential cost savings for business users.

Internet telephony can offer significant price savings over traditional long distance through more efficient use of bandwidth and buying lines in bulk.  Using digital compression, the number of calls over a single line can be increased ten-fold without sacrificing sound quality.

Existing Network

While long distance resellers could use compression with circuit-switching technologies to provide price savings, they face prohibitive start-up costs in establishing a large network.. The Internet global network already exists, is well developed, and has extensive reach.  A phone gateway network uses the Internet as an open network which is available to even the smallest user, and the gateways are operable from any location with Internet connectivity.  This type of network will dramatically reduce barriers to entry into the long distance market and increase competition among providers.

Features

The phone gateway network utilized in Internet telephony also integrates voice and computer networks, resulting in new calling features limited only by computer capacity.  Features previously available only at a high premium or with the most expensive equipment will now be more affordable and available to all users. Some examples are:
 

Call Waiting	Call Forwarding	3-Way  Calling	Call Hold	On-Line Search
Caller ID	Call Screening	Call Back	Call Trace	Distinctive Ring
Redial Last #	Personal Directory	Multiple Lines	Voice Mail	Voice E-mail
Simultaneous Voice/Data Text Chat	Application Sharing	Interactive Voice Response	Conference Bridging	Call Security/Encryption
Video	Fax

 

In addition to providing the basic features offered by current telephone service, Internet telephones will allow for more active screening of calls.  "Smart" Voice Mail would allow messages to be tailored for individual callers.  Other screening examples include "Smart" Call Waiting which would inform users of the identity of a second caller and "Smart" Call Break-in which allow certain callers the ability to interrupt an on-going call in an emergency situation.

With the integration of voice and data, users could utilize whiteboards or chat programs to supplement their conversations with diagrams or text.  The potential for application sharing will also appeal to business users.  Callers could share worksheets or word processing files, collaborating on file creation or edits while discussing it over the phone.  Lotus has announced its intention to incorporate Internet telephony into future versions of Lotus Notes software.
 

CHALLENGES FACING INTERNET TELEPHONY

Internet telephony faces adoption challenges at both hardware and software levels, but its primary obstacle is the perception of lower quality voice delivery in comparison to the Public Switched Telephone Network.  Internet voice transmission may result in a fraction of a second delay while the computer waits on the next packet of data to arrive.  While cost-driven personal users may be willing to accept such delays, business users will never adopt the technology until reliable, real-time communication can be ensured.

Hardware Issues

Internet telephony requires users to have sound cards, speakers and microphones to be operational.  Until recently, sound cards and speakers had few uses besides computer games.  As a result, many business computers were previously not equipped with them.  Today, nearly all computers are sold with sound cards and speakers, and microphones can be purchased for less than $10.

A minimum of 16 MB of RAM is required to run Internet telephony effectively, and 32 MB or more is preferable.  Old, slow computers with insufficient RAM can be upgraded relatively inexpensively, and new computers should be more than fast enough to handle Internet voice.

Full-duplex sound card drivers are necessary for both parties to speak at the same time.  This type of driver was made available on new computers starting last year, and most half-duplex drivers can be converted at no cost.

A 14.4 Kilobyte-per-second (Kbps) Internet connection is adequate for telephony, but voice transmission may be of poor quality and arrive late.  In 1996, however, this was the speed at which the majority of users connected to the Internet.  A 28.8 Kbps connection will provide sound quality comparable to that of a regular phone most of the time for U.S. domestic calls.  Faster or non-traditional modems, such as ISDN, T-1 lines or cable modems, will dramatically improve the experience of Internet telephony users.
 
 Software Issues
 
The biggest software challenge to widespread Internet telephony adoption is the incompatibility of the various products.  For example, users of VocalTec's Internet Phone can not talk to SpanLink's WebTalk users or Netscape's CoolTalk users.  Software vendors have acknowledged this obstacle and are working together to develop common standards for multimedia communication, both in how Internet telephones handle sound data and the way data is packetized for network transmission.  MIT's Internet Telephony Consortium has emphasized interoperability.  Proposed protocols include RTP (Real-Time Protocol) which would standardize real-time multimedia communication packets so that they can be read by any multimedia Internet application, and RTCP (Real-time Transport Control Protocol) which would standardize the way programs determine network conditions and adjust to a sound compression which uses more or less bandwidth depending on levels of traffic.

Currently, each software company maintains directories only of users of its own product.  To facilitate widespread Internet telephony adoption, on-line directories must be provided which include all users, once the software products become compatible.  Using third-party directory services (such as InfoSpace) to compile such a universal directory may resolve this problem.

Competition among Internet telephony software developers is leading to lower bandwidth requirements and improved performance over slower connections.

Packet Loss and Delay

Data packets may be lost between the source phone and the destination phone when Internet congestion causes routers to drop some packets or when packets are received too late to be included in the speech.  Packet loss is the leading cause of poor voice quality and the primary reason Internet telephony is considered unreliable.  Typical packet loss is around 10% and has only a minimal effect on speech.  During peak Internet usage periods, however, packet loss can be 30% or more.  At such levels, the speech is nearly incomprehensible to the recipient.

Despite the addition of significant bandwidth by the backbone operators, Internet congestion levels continue to rise.  While programmers are attempting to compensate for packet loss, there are other technologies being developed to increase the quality of Internet telephony.  RSVP, or Resource reSerVation Protocol is such a technology.  It would allow real-time applications to create virtual circuits across network routers.  With RSVP, the phone could reserve bandwidth on the Internet, keeping the circuit open only to the connected parties and guaranteeing real-time communication.  Non real-time data packets from other sources would be stored and forwarded to the parties only after the circuit was broken.  This protocol is supported by MCI, Intel and Cisco, and would result in a hybrid circuit and packet-switched network.

While RSVP would solve the quality and reliability issues facing Internet telephony, it will come at a cost to users. Internet Service Providers are expected to create different "classes of service," charging more for audio and video transmissions than for data transmissions.  The costs for RSVP should, however, be lower than PSTN costs and will not be distance sensitive.  Prices may be tied to the number of routers passed on the virtual circuit rather than by geographical distance between the parties.