If you have any doubts about the impact of VOIP (see July 23 BlowBack "A Heads Up From DC") and you have a decent DSL hook-up as we do, you merely have to download the latest version of Skype (1.0), then fire it up. For less than 2 pennies a minute --you do need to open an account-- using a standard PC microphone and speakers, the folks we dialed up in France and Italy (on their regular phones) were unable to detect any difference between our Skype call and our usual plain old calls. Skype is available for PC's and Linux (Beta) and has announced plans to soon have a MAC version. Our advice: if you're making any bets on companies that are basing their futures on the status quo in long distance telephony, short them!
The full ramifications of owning the line into house or office complex is only beginning to become apparent. Earthlink, AOL and lesser ISP's have already had to bow, tip the executioner and assume the position while the Baby Bells and Cable companies chortled, like an overfed Henry the VIII, behind the damasks. Soon it will be the turn of the long distance companies, AT&T, Sprint and MCI as VOIP becomes a reality; and so the question.... how long? Our answer --if vignettes from everyday life are of value-- is not quite yet; that is, at least when it comes to the home, small office marketplace according to the woeful story of a good friend.
This particular guy works out of a small home office but happens to do a lot of international business and pleasure chatting. With a typical long distance bill in the hundreds of dollars a month, he has been eagerly watching, though perhaps through the jaundiced eye of someone who's been around the block a couple of times, for the next technological shoe to drop. By any measure, Bob (we'll call him that) is what the marketers call an early adapter, the guy that keeps your business alive while you're crossing the chasm.
Not that Bob is a geek --he writes no code nor would ever want to-- but rather someone who isn't afraid to get his brain smudged under the hood when there's no other choice or a serious buck or two can be saved. So, rather than call up Geeks on the Hill or even his cousin the engineer, Bob has managed to set up his own wireless network that supports four PC's, add hard drives and adapters to his server, and otherwise understand the ins and outs of WLAN security 101. In other words, he can, when forced, upgrade bios, handle set-up pages for his LinkSys and pull and switch cables and telephone wires without getting strangled in the mess.
I say all this with more than a bit of sympathy because I also know that Bob has too often got chewed to pieces by being a little too far up on the bleeding edge of good things and most of what he's learned has come from the school of hard knocks. So when he told me he was going to try to switch to a VOIP system for his long distance calls, I perked up. Another mutual friend had heard good things about Vonage and had recommended it.
So Bob went on line, studied the specs carefully and came away with the understanding that Vonage knew all about small home networks, limited DSL bandwidth and Windows XP and 2000, the OS's he had running. He placed his order and within a week had got the equipment from Vonage. Then he went underground, status "away" on his MS Messenger. The longer I didn't hear from him, the more curious I got, knowing he was not a guy to invest time in something without succeeding.
When he did surface, his story was not very reassuring. He had, he said, after first failing to get the system running himself, spent hours on hold trying to get through to Vonage tech support. He then spent further hours working with a number of different tech support people who walked him through every imaginable configuration change. According to him, the patience of the techies at Vonage was amazing and at times they put two people onto his account but in the end they all had to shrug their shoulders. Reason?? This is where it gets really interesting. Bob said they had proved to him that if he used Vonage alone without hooking up a single computer, it appeared to work okay though he never had a chance to really try it out.
First, he was told that there was a firewall in his router that might be the problem but that fell away when the router was pulled from the loop. The techies at Vonage switched servers, downloaded firmware to his Motorola Voice Terminal (the hardware they had supplied), and suggested hooking the Motorola both off his router and between his DSL modem and the router. Still......nothing much: A dial tone but no outgoing calls, incoming calls but only from phones hooked into the VOIP system, etc. Finally, he was told that his service wasn't fast enough. So Bob peddled over to website that measures such things and found that, as advertised, he was uploading at about 126 kbps and getting over 1.3 mbps on the way down, numbers that could be a lot worse.
As I said, ultimately they had to give up but not without a further casualty. Bob had lost a ton of hours he couldn't really afford to lose, had even missed doing a few things he wanted to do and was now faced with having to ship the equipment back (at his own expense, it appears) but even worse, while testing the system, a jolt of Vonage juice had fried some circuits in the base phone to his Siemens wireless phone system. The Siemens now flashes like a Christmas tree when an incoming call comes in and shuts off on the second ring!
Bob has shut off the Vonage service but hasn't yet informed them of the damage he suffered. My take away from all this is the following: VOIP probably won't be ready for prime time until it is built into the system supplied to you by your ISP, which will most likely be the company that owns one of those ol' sagging line into your building. At the point, your Baby Bell is good and ready, they'll offer it in a package. I expect the cable companies to be all over this advantage. In the meantime, large companies will be the main beneficiaries and just the fact that there are dial up services that can take advantage of the savings, will drive the price of calls down to areas like Europe, to say, close to the 5 cents a minute offered by Vonage, who, in turn will be squeezed on their margins.
Copyright 2003 Richard Mendel-Black All Rights Reserved
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