VOIP – Embracing Invention

By Kenneth Brown

Alexis de Tocqueville Institution

January 5, 2004

In the early days of the famous Pony Express, because moving voice great distances was impossible, a premier price was paid for delivering written text. But there were changes. After 19 months of success, The Pony Express was ended by invention of the telegraph. 30 years later, the invention of the telephone would eliminate the need for the telegraph.

The evolution in early messaging is notable because originally, Pony Express messages were text messages, as substitutes for in-person communication. As an improvement, the new telegraph would convert text to code; which telegraphers deciphered back to text for customers as a substitute for face-to-face conversation. In each case, although there was a demand for voice, technology handily converted into something that could be transported greater distances, faster, and more efficiently.

Today, new technologies are presenting even more alternatives. Voice is being converted to new “codes” so it can be transported across different mediums offering new conveniences and efficiencies. Each of these new technologies is easiest to understand if we think about them as voice-to-code-to-voice (V2C2V) conversions.

Morse Code, used in the days of the telegraph, was a series of long and short (dot/dash) combinations. Similarly, computer language code is either a one or a zero (1 or 0). In the days of the telegraph, we used human operators to code and decode hundreds of messages. Today, powerful PCs code and decode millions of ones and zeros in seconds.

Protocols are used as templates for computer language conversion. More simply put, protocols are uniform information sets that allow patterns of ones and zeros to be easily converted into the things we see and do with a PC. Protocols are used for hundreds of reasons including encryption, applications, storage, compression, and communications. MP3 is a data protocol that converts data to music. JPEG is a data protocol that converts data to pictures. VoIP (voice over Internet protocol), is a protocol that converts voice to data. To this extent, VoIP is a V2C2V conversion.

VoIP is not a traditional phone call, but a technology that offers yet another substitute for in-person voice. There are number of reasons why we should distinguish VoIP from traditional voice technology.

Traditional voice technology is dependent upon privately-owned networks. The Internet however is non-proprietary, part of the public domain. Internet can ride across any privately owned networks, as well as across a number of other technologies. The invention of voice across the Internet is a colossal accomplishment because VoIP, an un-owned technology, will enable billions of people to communicate with one another for substantially less cost than any service offered by traditional telephone companies today.

Exploring the difference between VoIP and proprietary telephone service is key to understanding the significance of VoIP/Internet technology. Since the telephone was invented in 1874, proprietary technology dictated de facto development of all telephone service equipment and communications. After the expiration of Alexander Graham Bell’s patent, although telephone service was no longer owned by a single patent holder, the invention had such a pervasive effect that it standardized voice transmission thereafter. In fact, outside of improvements in phone devices, voice transmission is basically the same as its original design.

The push to adopt universal service in the early 1900’s reflected a desire to have one network that included everyone, as opposed to multiple networks that were exclusive, or even worse, precluded people from making phone calls to other parties because they were part of a different network. As predicted by many at the time of its passage in the 1910, the mandate for a universal service provider led ultimately to monopolies.

Without ownership of an expansive network, new entrants were cost prohibitively unable to offer telephone service. Vice versa, owners of large networks were able to dictate terms to equipment suppliers, telephone service customers, etc. The 1984 breakup of the telephone monopoly did not solve the problem. Large network owners were still able to create a critical mass that would dictate terms to suppliers and customers. Much like the early 1900’s, there are still two problems today 1) the cost-prohibitive nature of building competing networks has kept out competitors and 2) small networks without autonomy have a hard time holding onto customers. Revenue shortfalls force them to either go bankrupt or become consumed by the larger phone monopoly.

In terms of competition, 2003 is not much different from where we started. For almost 130 years, the telephone service model has cycled monopoly. Without a new approach, regardless of its limitations, traditional telephone service will continue to cycle monopoly and monopoly dominance.

Proprietary phone networks will remain monopolistic. However, the invention of VOIP has the greatest potential of ending the cycle of monopoly particularly because it is a data protocol that no one owns, that travels across a medium, the Internet, a network that is in the public domain.

The VoIP discussion is bigger than copper and cable broadband access. VoIP is data, thus it can traverse anything that enables Internet transmission. Today, broadband data transfer takes place principally across copper or cable networks. In the future, broadband possibilities are as exciting as they are unpredictable. There are examples of considerable diversity in broadband offerings. In many countries, broadband is via satellite. Patented technology delivers broadband across power lines. Around the world, there is abundant growth in broadband across across unlicensed spectrum, a domain owned by the public that is 100% free. WiFi transmits broadband easily several hundred feet. New standards called WiMAX will deliver broadband over 10 miles. Soon devices will enable VoIP to move across independent wireless networks as seamlessly as voice moves across cellular phones.

Other types of patented technology offer capability to deliver broadband across analog radio and TV transmissions. Ultra-wideband technology has the ability to transmit broadband without reliance on a single frequency, but by “bouncing” across a number of existing ones.

With Internet speeds moving from megabits to gigabits, VoIP will continue to evolve. When voice becomes a software application, true two-way seamless video becomes possible. We will we see combined e-mail and voicemail inboxes. Voice can be built into web pages and enable you to talk to a clerk when you are in the aisle of an online store. New technology will enable you to speak into a device in English, and be seamlessly translated into Japanese. It is unquestionable that an Internet moving data at a gigabyte a second will finally deliver the much awaited Dick Tracy Watch to the world.

Despite the promise of VoIP, its detractors are filling courts around the country challenging the technology. As expected, VoIP is an uncomfortable departure to many that have become accustomed to revenue from the 130 year old way of providing telephone service. Unfortunately for the plaintiffs in these cases, real hurdles make VoIP nearly impossible to stop.

The first problem is that VoIP is an Internet application much like e-mail that is not limited by traditional boundaries and can’t be removed from the hands of technologists. Controlling VoIP would be as difficult as trying to police e-mail. In terms of scale, stopping VoIP transmissions would require policing every variation of data transfer across the Internet. To avoid detection, programmers could easily change the protocol, which would make the process of finding a VoIP data transfer exceedingly difficult.

Network owners that provide last mile connections to the home insist that VoIP transmissions across their networks should be regulated as traditional phone service. However, this argument has two very big problems. First, it is virtually impossible to regulate one bit differently than another bit over the Internet. Second, wireless and other broadband alternatives will soon enable users to originate and terminate data transmission (ie. VoIP) without a need for last mile connections.

Courts could pass laws banning VoIP (as several countries have tried). However VoIP, like the Internet itself, is nearly impossible to police or regulate. As data transfer becomes more ubiquitous in society, it will soon be impossible (if not already) to determine where VoIP is originating from or being terminated. VoIP is here to stay.

As the Information Age moves forward, we should keep in mind that even more technologies are still on the way. Overall, as long as there is distance between persons that want to communicate, there will be a demand for technology that provides a substitute for in-person voice. While we cannot predict how much technology will evolve, we can expect that the 21^st century has much in store for us, especially in the realm of communications.

The best answer for all parties, including regulators, is to embrace this new technology. While society is always reticent to accept change, the arrival of VoIP cannot be reversed. Although, the telecommunications model that we grew accustomed to during the 20^th Century faces the fate of the Pony Express, clearly is being replaced by something much better. VoIP is clearly the next great leap in our efforts to provide a helpful substitute to face-to-face communication.