Vendors Eye Internet Telephony Standard

Steven J. Vaughan-Nichols

The best things in life are free, and, for now, so is making phone calls over the Internet. More than a dozen companies, with almost as many proprietary technologies, are producing Internet telephony programs for personal computers. However, analysts believe this free ride may not last.

An immediate threat comes from the America's Carriers Telecommunications Association (ACTA), a trade association of long-distance carriers. ACTA has petitioned the FCC ( http://www.fcc.gov ) to remove from the market products like VocalTec's ( http://www.vocaltec.com/ ) Internet Phone, Quarterdeck's ( http://www.qdeck.com ) WebTalk, NetSpeak's WebPhone ( http://www.netspeak.com ), and Third Planet Publishing's ( http://www.planeteers.com/ ) DigiPhone.

The ACTA petit ion, which has met with strong resistance from the Voice on the Net (VON) Coalition ( http://www.von.org/ ) of telephony software businesses, is widely expected to be denied by the FCC. After all, the FCC is in the carrier regulation business, not software regulation. Says Nate Zelnick, senior analyst for Mecklermedia (Westport, CT), which is a trade show producer and publisher of Internet-focused titles, "The Telecomm Reform Act of 1995 deregulated the telecommunications industry. It didn't put it in a straitjacket."

That said, Zelnick doesn't expect Internet telephony to play a major role in most people's lives. "The big problem with Net telephony is that a $10 device called a phone already lets you make long-distance calls. You can use a computer, voice card, and software; but then your 'free' phone service must be paid for up front, instead of on a usage basis." But he also says that for businesses that make many long-distance calls, especially to branch offices, "Internet telephony makes a great deal of sense."

Harley Ungar, an analyst and consultant for the New York City-based research and consulting firm Jupiter Communications, believes that interoperability among different vendors' products will be a key requirement for wide acceptance of Internet telephony. "Ultimately, there must be an interoperability standard, but I don't see this happening until the Internet becomes a mass market." Ungar predicts that this won't occur until the "turn of the century, when a third of the population will be using the Net."

Lee McKnight, principal research associate for MIT's Internet Telephony Interoperability Project ( h ttp://rpcp.mit.edu/~itel/ ), is working to ensure that Internet telephony interoperability standards arrive long before the year 2001. He is helping to pull together the proposed Internet Telephony Interoperability Consortium (ITIC). This industry and education group will promote open standards that will be issued via either the Internet Engineering Task Force (IETF) or the WWW Consortium for the benefit of companies and users alike. With telephony and computer powerhouses like AT&T, Microsoft, MCI, and Netscape, plus Internet telephony companies, attending the first organizing meeting of the ITIC, open standards seem possible. Without standards, McKnight says, "None of this will go anywhere."

McKnight is not interested in just the technology. For him, the real questions are: How will the technology be deployed, managed, regulated, and paid for? The last is critical. For now, there's no charge, beyond the initial investment and monthly Internet access fees, for voice over the Internet. However, McKni ght says this will change.

"No one has a good idea right now what the financial model will be," McKnight says. "But economic analyses of voice services over the Internet, including cost evaluation, pricing, and yield management models, will produce a viable model."

McKnight also says that while ACTA's petition will fail, "There's a risk or chance that in the future, the FCC may attempt to regulate the Internet. I don't expect it to happen soon, but the risk is there and grows as commercial traffic such as real-time voice services grows." Still, he believes that the future of Internet telephony is bright. According to McKnight, we will see "a whole new range of Net/telephony services. There will be new applications that we can't dream of today. By the twenty-first century, we'll be looking at the first or second generation of standardized products and services that combine the Internet and telephony."