January 02, 2004

What is so special about Vonage?

The title should be “Structural Separation – Is it Natural in an IP network”; but I decided to be fashionable and use Vonage, whether it is appropriate or not.

It is conventional wisdom that structural separation encourages competition and that IP networking technology allows for structural separation. I have no quarrel The thesis of this entry is to suggest that one can approximate structural separation in PSTN and also one can block the benefits of structural network in an IP network as well.

These days it is routine to point out that companies like Vonage offer innovative services and it is possible only because they are using IP networking technology. I would like to suggest that Vonage-like service can be offered even in PSTN. Imagine for a moment a new device analogous to ATA that Vonage uses. The only difference is the new ATA has a V.92 modem instead of an Ethernet interface. The user establishes a modem call to a designated number belonging to the new service provider and uses the data link to send and receive signals for a new voice call. Once the initial signaling is done, the modem session can be put on hold and the connection is used for the voice call. With this device, the new service provider can offer services just like Vonage. Since this is built on the standard POTS access, lifeline services will also be covered. I am not necessarily serious about this proposal. I am only suggesting that PSTN need not be vertically integrated as people tacitly assume. Structural separation is possible in PSTN as well. We collectively decided to get all the service from the local access provider.

On the other hand, an infrastructure provider in an IP network can block Application Service Providers. For example, already there have been proposals to block P2P traffic. What will prevent an ISP to declare that VoIP traffic also belongs to this category? The reason I am pointing out this is to suggest that we should be vigilant that the structural separation is maintained. Yes, it is easier to maintain structural separation; but it is not forgone conclusion.

Posted by aswath at January 2, 2004 12:04 AM
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