May 21, 2007

Usual Fallacies of VoIP

Garrett Smith points out a story about David Pogue's recent keynote presentation where he hazards a guess that land line telephone service will be free because of VoIP. He might be right, but then we still pay for water. But Garrett doesn't think so because he says the big telcos will never let it happen. May be. But how will little guys like Skype will ever meet their financial objectives? Acting like a telco or offering enhanced features that can be realized at the "intelligent ends" for a small fee?

Pogue may have parroted a few fashionable words currently associated with VoIP, but the quotes clearly suggests that he knows not what he is saying. Is Skype cheaper because people using it look like a"dork"? Can't one fabricate a standalone Skype device for the price of a cordless phone? I guess if you can attach NYT to your name and repeat pithy saying that are currently fashionable anything goes.

Posted by aswath at 11:21 PM

May 15, 2007

AllFreeCalls Rising up as Yak4Ever

A couple of months back, a few incumbents took a procedural action that effectively shut down many “free” long distance providers who took advantage of an arbitrage condition. One of them was Now they are back with a more restrictive (legally and not as a practical matter) service that is nonetheless just as “free”. Apparently it is a (clever?) legalistic solution, but my interest here is to suggest some improvements in the user experience that they can make within the confines of the legal straitjacket.

The arbitrage condition arises because certain rural telephone service providers are given a high termination charges to complete calls to their subscribers compared to the current rates to originate calls to a large group of countries. The incumbents argued that the calls really did not terminate at the rural service providers, but really terminated at those foreign countries. Against this background, the renamed Yak4Ever requests its customers to identify a small number of parties that they frequently call and identify them using a short code (they call it “extension number”) to identify the real end-point of the call. I surmise that this gives them the required legal loophole, since legally the call gets terminated on the “line side” in the rural carrier and then it so happens that the call is routed “internally” (just like a PBX will do) and it so happens that the routing then finally terminates in the PSTN world some other place.

Currently Y4E allows a user to register up to 10 numbers and each number is assigned an extension number. I would find it difficult to remember the specific extension number if I have designated more than a handful of phone numbers. So I think it will be nice if they allow me to select an extension number that is a mnemonic, with “#” to designate end of string character.

As a next step, it will be nice if I can add/update a number to this pool in real time (currently it looks like it has to be done at the time subscription). I am not sure whether the static nature of the pool is a legal requirement or not. If it is not, then it will be nice if I can designate the 10th extension for temporary use and populate the phone number by sending a SMS.

In any event, good luck to them.

Update: Just now I received a confirmation email from Y4E of my registration. That email indicates that one has to dial the end-of-digit "#" after dialing the extension number. This suggests that the digit analysis logic is already designed to handle variable number of digits for the extension number. Thus technically they can handle mnemonics for extension. The only question is whether that will still keep them within the legal boundaries.

By the way, the confirmation mail didn't include the list of numbers and the extension number assigned to them. So you need to note down this mapping.

Update 2: At Pat's urging, I re-registered and received a confirmation mail noting my number and the phone numbers and the corresponding extensions of my friends. Apparently the confirmation mail for the previous registration must have been caught in the SPAM filter.

Posted by aswath at 03:31 PM | Comments (2)

May 02, 2007

Vonage v. Verizon Patent Case Has a New Wrinkle

If I am reading a story in Washington Post correctly, a recent decision by the Supreme Court in KSR International v. Teleflex could have material influence on the Verizon v. Vonage case. According to Washington Post, “[it] is the court's furthest-reaching ruling in the field for decades. The decision sends a clear message that the U.S. Patent and Trademark Office and lower courts must be more open in considering whether inventions are "obvious," a common ground for denying an application.”

I think it is all the more critical to ask the question whether “conditional analysis” in VoIP is an advance that occurred “in the ordinary course without real innovation” and that it combines “previously known elements”. As Justice Anthony M. Kennedy wrote for a unanimous court, granting patent protection for such an advance “retards progress” may “deprive prior inventions of their value or utility".

Update: Just as I anticipated, Vonage said that "... it was seeking a retrial of a patent infringement case against the company in light of a landmark patent ruling by the Supreme Court on Monday."

Posted by aswath at 01:16 AM | Comments (0)

May 01, 2007

Pricing Internet Access

Andy wrote about a new pricing model Vodafone announced for their data service. The plan is close to the preferred pricing model – cost based pricing. According to this article in The Register, they will a charge a penny per 5 KB of data (download, I presume) for the first 0.5 MB. The next 14.5 MB of use on the same day is free. This is an interesting charging structure in many ways. First to note is the following claim in the news story: “Most users should fall somewhere in below the 15MB limit, and the current rate is £2.35 a MB, so everyone should be better off.” It is not clear to me how to interpret this. The old rate translates to 1.18 pence per 5 KB. So if the current use level is of the order of 0.5 MB, then the loss of revenue is not much; but on the other hand this price structure may induce people to use more often.

Along with this revised price plan, they also indicate that VoIP and P2P traffic (defined to be “not web traffic”) will have different pricing plan: there is a session cost of 5 pence and 2 MB of use will cost £2. I am not concerned how they are planning to identify a session to be VoIP or P2P. What is interesting for me is that they are putting VoIP and P2P in the same bucket. I would think most of P2P applications will be half-duplex while VoIP is more likely to be full-duplex. So my question is how they are going to measure 2 MB of VoIP traffic – 2 MB of download (implying roughly 4 MB of total bandwidth transfer) or 2 MB of total bandwidth transfer. For me, this is the most puzzling aspect of the revised plan. They seem to be focused only on download bandwidth. But radio resource is utilized for both download and upload and there is bandwidth cost for upload even in wireline access. For example Amazon S3 charges for both download and upload. Hence I would think that any pricing plan should include both download and upload.

But overall this price plan is close to what I would like to see – cost based tariff without paying attention to the application.

Posted by aswath at 08:22 PM | Comments (2)

Premium Services vs. Premium Devices

This post is a continuation of the previous post, except this time prompted by recent posts by Garrett Smith and Moshe Maeir. Garrett refers to a premium MVNO called Voce and uses it to rhetorically ask whether there can be a premium VoIP service provider. He suggests that even though currently most of the VoIP providers seem to be pushing cheap voice calling, there is money to be made in selling premium services. He posits that, “there is room for a service that is $49.99 per month, that offers twice the premiums that Vonage (and their clones) offer.” He also cautions that if the industry does not act soon, then “you will have to prove your premium over and over and over again in order to have consumers believe your story.”

Of course a week earlier, Moshe had suggested the same thing by making a concrete proposal. The details of that proposal are interesting and noteworthy. To start off, Moshe would sell three devices – a desktop IP phone (he reiterates that it is NOT an ATA), a Wi-Fi phone and an USB phone – for $300. Then for a monthly fee of $75, he will offer a plethora of services like iotum’s relevant calls, find me follow me, find me follow me, voicemail (no voicemail to email?, no voicemail to text?), call forwarding redundancy, caller ID and “every other digital service you can think of….”. He will also include unlimited PSTN connectivity to some countries and a handful of PSTN numbers. Of course true to a premium service there will be customer service (I suppose rated highly by JD Power).

It is very alluring to offer VoIP service especially given the attractive high ARPU. But we have all celebrated the “Stupid Network” paper and “VoIP is a product, not a service” essay. The authors of SIP have proclaimed that it exploits the intelligence at the end. So why are we still pursuing a service provider model? Shouldn’t we be focusing on developing a line of premium devices? Most of the services (save those that are related to PSTN) can be realized at the end-points. A few years back it was in vogue to compare Internet to highway. If I am allowed to use that abused analogy once more, it looks like we are focused on building limousine service (not stretch limos, mind you) instead of building Lexuses and Mercedeses?

Let me go on a limb and place a friendly challenge: identify a service (not involving PSTN) that can not be realized at the end-points, but requires a service provider. Let me try to outline how it could be done by “consenting end-points”.

Posted by aswath at 08:17 PM | Comments (2)

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