Om Malik on Broadband: The Voice over IP Insurrection

Om Malik on Broadband: The Voice over IP Insurrection:
"The $3 billion dollar budget at Bell Laboratories did not include a single project addressing the use of data networks to transport voice when VocalTec Communications released InternetPhone in February 1995. As of 2004, every project at the post-divestiture AT&T Labs and Lucent Technologies Bell Labs reflects the reality of voice over Internet Protocol. Every major incumbent carrier, and the largest cable television providers, in the United States has announced a VoIP program. And even as some upstart carriers have used VoIP to lower telephony prices dramatically, even more radical innovators threaten to lower the cost of a phone call to zero—to make it free.

The VoIP insurrection over the last decade marks a milestone in communication history no less dramatic than the arrival of the telephone in 1876. We know data networks and packetized voice will displace the long standing pre-1995 world rooted in Alexander Graham Bell's invention. It remains uncertain whether telecom's incumbent carriers and equipment makers will continue to dominate or even survive as the information technology industry absorbs voice as a simple application of the Internet.

The roots of the VoIP insurrection trace back to four synchronistic events in 1968. The Federal Communications Commission (FCC) ruled MCI could compete with AT&T using microwave transport on the Chicago to St. Louis route. The same year, the FCC's Carterfone decision forced AT&T to allow customers to attach non-Western Electric equipment, such as new telephones, and modems, to the telephone network. The Department of Defense's Advanced Research Project Agency issued a contract to Bolt Beranek and Newman for a precursor to the Internet. And in July 1968, Andrew Grove and Gordon Moore founded Intel. Innovation in the communication sector remained the proprietary right of AT&T for most the 20th century, but events in 1968 breached the barriers that kept the telecom and information technology industries apart. For the first two-thirds of the 20th century, AT&T had manned Berlin Wall separating telecommunications and computing, but eventually, these two enormous technology tracks would be unified.

Two entrepreneurs barely out of their teens, Lior Haramaty and Alon Cohen, founded VocalTec Communications in 1993 based on the promise of packet voice technology they observed as members of the Israel Defense Force. Most military command and control used the highly survivable TCP/IP distributed data networks since the 1980's. The challenge of transporting voice over the networks arose as an imperative to support certain very sensitive voice commands like "drop the bomb", but the idea of commercializing packet voice did not occur to anyone until the arrival of Lior and Alon. How could slicing voice into 50 millisecond packets improve the telephone business? The tradition bound telephone industry types or "bellheads" spent their time before 1995 improving the Public Switch Telephone Network (PSTN) not replacing it."

http://www.gigaom.com/2004/09/the_voice_over_i.php